Close an absolute Trustcontaining life policy

TW1234

A life insurance investment bond was moved by its owner into an absolute trust for a grandchild.

The trustees wish to pass the bond into the control of the only beneficiary without cashing it, but are told that this cannot be done as it is held in an absolute trust.

Can anybody explain more, please, or advise on how to proceed, as the intent is to enable the grandchild to retain the insurance bond as an investment, and cash it when needed. 

HappyHarry

As it is an absolute trust it already belongs to the grandchild and can be surrendered as needed.
You wont be able to transfer it and put it in the name of a minor.

TW1234

Thanks for the response.

The granchild is no longer a minor.

My understanding is that the grandchild is the beneficial owner and the trust (represented by the trustees) is the legal owner. 

At present the policy could indeed be surrendered on the signature of the trustees or allowed to continue as an investment; the trustees wish to step aside and arrange matters so that the grandchild can take that decision entirely by themself and at a time of their own choosing, without any further involvement by the trustees.

How can this be achieved, as I believe it would require the trust to relinquish its legal ownership and the grandchild to become the owner...

HappyHarry

The trustees should be able to assign the bond to the beneficiary. The bond provider will have a form to do so.

TW1234

Thanks. (You rise early!)

That confirms what I believed, but the insurance company remain adamant that it is not permitted when the trust is an absolute one.They are only prepared to leave the policy in the trust or allow the trustees to surrender some or all of it.

 I will return to them bolstered by your confirmation.

HappyHarry

who is the bond provider?

poseidon1

TW1234 said:

Thanks. (You rise early!)

That confirms what I believed, but the insurance company remain adamant that it is not permitted when the trust is an absolute one.They are only prepared to leave the policy in the trust or allow the trustees to surrender some or all of it.

 I will return to them bolstered by your confirmation.

May also be helpful to provide  redacted wording of the actual trust clauses. The trust document ( as distinct from the policy document)  dictates what the trustees can and cannot do.

Need to make sure this is truly an absolute trust, and not some other form of settlement with  requirements that might prevent a straightforward assignment to the adult beneficiary.

TW1234

Sunlife, but they are now part of AVIVA

TW1234

poseidon1 said:

May also be helpful to provide  redacted wording of the actual trust clauses. The trust document ( as distinct from the policy document)  dictates what the trustees can and cannot do.
Need to make sure this is truly an absolute trust, and not some other form of settlement with  requirements that might prevent a straightforward assignment to the adult beneficiary.

There is nothing relevant to the point within the trust deed, and this is on the unamended  Absolute Trust form provided by the insurers.

It is an absolute trust, as only one beneficiary, with 100% share, is shown.

The insurance company is saying that it "cannot be done just because it IS an absolute trust, not for any other reason, but cannot offer further detail. Their suggestion is "to take legal advice."  

Thanks for the input, I will return when I have a further response from Aviva.

poseidon1

TW1234 said:

poseidon1 said:

May also be helpful to provide  redacted wording of the actual trust clauses. The trust document ( as distinct from the policy document)  dictates what the trustees can and cannot do.
Need to make sure this is truly an absolute trust, and not some other form of settlement with  requirements that might prevent a straightforward assignment to the adult beneficiary.

There is nothing relevant to the point within the trust deed, and this is on the unamended  Absolute Trust form provided by the insurers.

It is an absolute trust, as only one beneficiary, with 100% share, is shown.

The insurance company is saying that it "cannot be done just because it IS an absolute trust, not for any other reason, but cannot offer further detail. Their suggestion is "to take legal advice."  

Thanks for the input, I will return when I have a further response from Aviva.

Had you been able to provide a redacted copy of the actual trust wording I could offer an informed 'legal' view.

I have found Aviva to be one of the better life companies in respect of trust queries raised on this forum, and they have a useful library of proforma trust documents for various trust events, but from what you say of their response in the present case there seems to be some kind of 'hidden' impediment in the drafting of Sun Life's version of an absolute trust. I can't think there is necessarily an issue with the bond itself, although is the bond written on the life of the grandparent who set it up?

You can see if Aviva can elaborate further, but experience has shown they tend to be a bit of brick wall when they get to the stage of suggesting their client obtain independent legal advice.

TW1234

Thanks for your time.

The bond is written on the life of the original owner.(Grandparent)

The template to put it into trust was provided by Aviva (they took over SunLife policies), & is headed as Absolute Trust so should meet their requirements, and they have stated that it is not a wording problem but (just)  because it is an absolute trust, which does not fit with my understanding.

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