Life Insurance

cdjohn31

I have a life policy with my wife as beneficiary

I have got the documents to put the policy into trust but not sent them off. instead I am looking at transferring ownership of the policy to my wife.

What are implications of doing such a transfer. Are there any tax implications to either me or my wife?

What would happen if my wife died before me?

Once the posicy is transferred who can change the beneficiary/ Can i still do that?

If I put the trusts into place and then decide to transfer is thata problem?

ACG

Why do you want to put the policy in your wifes name?
What are you hoping to achieve?

dunstonh

I have a life policy with my wife as beneficiary

Is that under a trust arrangement or with her being the second owner?

It suggests it is not under trust as you say you never placed it in trust. So, if she is the second owner then why do you need to change anything?

It would help to know the current set up, what type of life assurance it is and what you are trying to achieve and why as it is a bit confusing at the moment.

cdjohn31

On the advice of the insurer we prepared trusts with my wife as beneficiary and her parents "next in line". This would speed up the process of getting the benefit and ensure that my wife benefitted and , if we both died close to each other, then her parents would easily get the benefit. We don't want any of my family to be able to get any of benefit

These trusts were held back, however, when the insurer recommended transferring the ownership 100% to my wife. With the trusts the beneficiary could still be changed but with her as the owner that couldn't happen - this is what I am trying to verify.

It is a simple fixed term life insurance - nothing fancy. If I die, they pay out

kingstreet

cdjohn31 wrote: »

the insurer recommended transferring the ownership 100% to my wife

Did they put that in writing? It's not often anyone working for an insurer would make such an unequivocal statement.

Transferring ownership to your spouse means she would receive the benefit on your death but if you decided to split up, you would have to cancel the policy and start again. If you were in poor health at that time, you may not be able to arrange new cover or the premiums may be unaffordable.

With the trusts the beneficiary could still be changed but with her as the owner that couldn't happen - this is what I am trying to verify

This is one of the major benefits of a discretionary trust. You name classes of beneficiary which can be changed to match changes in your circumstances. You can also plan for contingencies and have back-up beneficiaries if anything happens to those who would be your first-line beneficiaries.

As the settlor (you) can prevent changes to the beneficiaries of the trust because you will/should automatically be a trustee under most insurers' trusts. If not automatic, there's nothing to stop you adding yourself. Just remember you need two or three more trustees to ensure there is someone to administer the trust if the worst happens. The trustees cannot alter the beneficiaries if you die. They must follow your wishes.

If you were taking out a new policy today, you would have the option of Life of Another with your wife owning the policy with you as the life assured, or the trust route. I'd always take the trust route for the reasons I've mentioned.

Has your insurer provided a guide to your trust options that you can fully investigate the benefits to you?

ACG

I back up kingstreets comments, what you are thinking or what has been suggested seems a very long winded (and potentially expensive way) of doing what you want.

A discretionary trust will do what you want.
If you were sold the policy through an advisor, ask them to help you to complete it.