Prudential Life Policy Written In Trust

StratfordMatt

My late mother and my step-dad took out a with profits ‘joint life second death’ life policy with Prudential in 1995. It was written in trust from the outset with my 2 stepsisters and me as beneficiaries. My step-dad died late last year. Prudential have been notified but insist that they won’t pay out the benefits until probate is completed. The whole point of the policy being put in trust was to ensure that the benefits were paid without probate. Prudential staff just say ‘it’s a legal requirement’ when challenged. But they cannot/will not point to the law or tax rule that over-rides the Trust approach. What remedy do I have? Why would anyone buy a life product from Prudential if this is their attitude?

Keep_pedalling

There is no legal requirement but financial institutions set their own rules for releasing money to executors / beneficiaries. Do you need probate for any of his assets?

The reason to have policies written in trust is to keep them out of the estate for IHT purposes rather than avoid probate.

poseidon1

https://forums.moneysavingexpert.com/discussion/6655343/prudential-life-policy-written-in-trust

I suspect the problem here is that the parents may have been the original trustees from outset in 1995, and never thought to add any of the children as additional trustees as years passed.

If this is the scenario and the last surviving trustee has died, then it is his executors that now have the legal authority to seek payout of the trust policy proceeds, hence Prudential requiring probate as proof of the executors' status in this regard.

Prudential would have been legally bound to payout to surviving trustee/s had there been any .

Clearly the error here may well have been your parents not realising the need to establish an unbroken chain of trusteeship by appointing a younger family member (or two ) when they had the chance.

Are you and siblings the stepfather's executors?

In any event, this thread maybe a useful reminder for those establishing similar policies in trust.

One needs a surviving trustee in place when last surviving life assured has passed.

StratfordMatt

Thanks for your response. My formal complaint to the Prudential CEO has resulted in a reply agreeing that probate is not required to trigger a payout because the policy was written in trust. So far, so good. However, the person handling the complaint has clearly not reviewed the whole basis of the policy. They are now asking that the solicitors involved "confirm they are acting for the estate of [3 beneficiaries names]" which is clearly impossible since all three beneficiaries are dead! They also want the bank payment form signed by "the trustees" and haven't thought to explain that this should now be the executors of my step-father because no-one other than the 2 insured lives was named as a trustee. I am waiting for a further call from Prudential. Your reply makes complete sense and as I and one of my half-siblings are executors of my step-father we should be able to sign the form.

poseidon1

Subsequent developments to your original post are still somewhat confused.

You say the the (3) beneficiaries of the policy trust had died. My intial assumption was you and your siblings were beneficiaries of a trust policy set up by your parents on a joint life 2nd death basis. Clearly your parents could not be the beneficiaries, so who were? If all beneficiaries are indeed deceased, that is of course another layer of complication, but not an issue for Prudential whose primary duty is to make payment to legally established trustees.

As for Prudential getting a sign off from the present replacement trustees , its somewhat counter intuitive for them to concede probate is generally not required for policies in trust, because in the present scenario they need probate of the deceased estate as legal recognition of the executors who now replace the deceased trustee.

Have you and your half sibling now obtained probate? Can't see this matter progressing much further without it.

kingstreet

Hang on.

In post one it says

"It was written in trust from the outset with my 2 stepsisters and me as beneficiaries."

Then in post two it says;-

"They are now asking that the solicitors involved "confirm they are acting for the estate of [3 beneficiaries names]" which is clearly impossible since all three beneficiaries are dead!"

This is not possible. You are one of the beneficiaries.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81916742#Comment_81916742

A statement I entirely overlooked.