Do I need Trustee bank account

Poppy9

Myself and OH are the only two named Trustees on a life insurance policy for my sister.

My sister has died and is survived by her spouse and children. The intention of the policy was to ensure should something happen to my sister and her OH that the children would be taken care of and that I had the money to look after them. The policy was set up when the children were minors but they are both now adults.

I have a form from the insurance company asking us to sign to release the funds and give details of bank account number to be paid into etc.

Do i have to open a special account or can I just give one of my existing accounts and then transfer the money to my sisters family? It's a fairly substantial amount of money?

Thank you.

jonesMUFCforever

You need paid for legal advice for this.
Get it wrong and you can get family members suing you!

Poppy9

jonesMUFCforever wrote: »

You need paid for legal advice for this.
Get it wrong and you can get family members suing you!

With this side of the family there is absolutely no animosity as we are extremely close and there is no issue. The insurance pays out and I transfer 100% to them.

xylophone

In the case you describe it hardly seems necessary to set up a Trustee Account?
If you and your husband as Trustees are satisfied that the adult children are the only legal beneficiaries, and that all legal requirements have been met, might it be an idea just to write formally to each of them explaining the circumstances in which they have become entitled to the funds and asking each for the details of the individual accounts into which their share of the monies is to go?

Once you have received a formal response, fill in the form provided by the insurance company (make very, very sure that you transcribe the details accurately!)? Keep a copy.

It would also be a good idea to ask each of the beneficiaries to confirm to you in writing that the funds have been duly received?

Mikeyorks

Poppy9 wrote: »

Do i have to open a special account or can I just give one of my existing accounts .

No separate account needed. From the detail you give - you are the beneficiary?

Poppy9

Mikeyorks wrote: »

No separate account needed. From the detail you give - you are the beneficiary?

Yes myself and OH are beneficiary as they wanted to ensure that we had enough money to raise/educate their children etc. Obviously this is no longer the case as they are now independent so we are intending on just giving them the money.

xylophone

I am rather puzzled now. You seemed to be indicating in your first post that you were Trustees for the children.
Now you are saying that you and your husband are the beneficiaries?
Who exactly is beneficially entitled to the money? What kind of Trust was created? If you and your husband are beneficially entitled, then is it in effect your money that you are giving to the children?
http://www.legalandgeneral.com/_resources/pdfs/life-cover/trust-information/Trust%20Form%20Overview.pdf

Poppy9

xylophone wrote: »

I am rather puzzled now. You seemed to be indicating in your first post that you were Trustees for the children.
Now you are saying that you and your husband are the beneficiaries?
Who exactly is beneficially entitled to the money? What kind of Trust was created? If you and your husband are beneficially entitled, then is it in effect your money that you are giving to the children?
http://www.legalandgeneral.com/_resources/pdfs/life-cover/trust-information/Trust%20Form%20Overview.pdf

in the policy which was set up over 20 years ago myself and oh are named as trustees to benefit from the policy for the benefit of the children. The money is specifically for us to raise the children. So technically the money is ours but we know that was never the intention and that the money was intended to benefit the children and as far as we are concerned the money belongs to the children. The letter from the insurance company is addressed to us as tustees and just asks for a bank account number to pay the money into.

mancitychick

There is no requirement for you to open a separate bank account. If the insurance company required you to, they would of specified it on the forms.

You may want to open a separate account for the money to be paid into and distribute it to your niece/nephews from there so that it isn't going through your own everyday account. I am currently dealing with my dads estate and this is what I have done but in my case I have more than one lot of money coming in.

Sorry for the loss of your sister.

xylophone

As far as you are concerned the money belongs to the children but it might be wise to check the exact wording of the policy Trust Deed just to clarify who beneficially owns the money? Even if you do beneficially own it, there is nothing to prevent your giving it to the children but there just might be eventual IHT considerations for your own estates?
Of course if the money is indeed beneficially yours, then you might prefer to have it paid into your own account (joint account might be best if you have one with your husband) and then issue a cheque to each child yourselves?

WhiteHorse

Based on the information given.

The policy was taken out by S for the express purpose of providing for her children in the event of her death. The OP's were named as the recipients responsible for administering the funds. On the death of S, a trust arose automatically, the OP's then becoming the trustees.

The money does not belong to the OP's, but to the trust. The trustees may dispose of it as they see fit, as long as whatever they do is in the best interests of the children.

If you are inclined to give them the money outright, then get it paid to yourselves and then write them a cheque. If you are going to retain it (to dole it out gradually, perhaps), then set up a separate account.

Once it's all done, it would be wise to lay out all the documents in a folder and keep it.