Discretionary Trust - appointing additional trustees

dizzie

Hi,

I have taken out a new life insurance policy and would like to put this into a discretionary trust, to benefit my husband and/or my teenage children. I have two questions:

1. Is it allowable to name my husband as a trustee if he could be a potential beneficiary?

2. If anything were to happen to my husband before me, I'd like the ability to add the kids as additional trustees. How easy is it to do that and what is the process? Is it simply a case of filling in a form or is it more complex than that?

Many thanks for any information you can give me.

jonesMUFCforever

I think you need to speak to the life company directly.

magpiecottage

dizzie wrote: »

1. Is it allowable to name my husband as a trustee if he could be a potential beneficiary?

Yes. However, if he is the ONLY living trustee then he cannot appoint himself as a beneficiary even though he is a potential one. Since, in the event of a death claim, you would not be living (obviously) an additional trustee now would be worth considering.

If anything were to happen to my husband before me, I'd like the ability to add the kids as additional trustees. How easy is it to do that and what is the process? Is it simply a case of filling in a form or is it more complex than that?

They would need to be over 18 and consent to it.

The insurance company may be able to provide a form to appoint new trustees. Otherwise responsibility would usually fall to your personal legal representatives and if you appoint the children as executors of your will (provided they are 18) that will happen anyway.

Logically, if they are over 18, the cash would be divided up anyway at that time so there would be little point in the trust continuing.

kingstreet

Beneficiaries can be trustees.

I ask my clients to appoint at least three trustees at the outset. In the case of a couple, them plus two more.

System

magpiecottage wrote: »

Logically, if they are over 18, the cash would be divided up anyway at that time so there would be little point in the trust continuing.

Not necessarily. IHTplanning might be one reason for continuing the trust.
Or simple prudence in doling out lots of money to teenagers or offspring with unsuitable partners.