Life Policy - in Trust

Fairwinds

My mother died recently and left a policy with Abbey Life that was in trust for myself and my brother.

I thought that as this policy was in trust it was outside the Estate, but Abbey Life say they won't pay out on the policy until a letter of Confirmation is submitted. The also say something about this is needed as there was no other trustees added to the policy.
Why do they require this?
Other policies that were in trust have paid out on receipt of a death certificate. Are Abbey Life correct? and if not what can I do about it. Any advice?

geewhiz

I work for a Life Assurance co and normally trusts mean that we can pay proceeds immediately on death and the payment does not form part of the estate so is not liable to inheritance tax either.

dunstonh

If it is in trust then it is not part of the estate.

The responsibility to sorting this paperwork is with the trustees. I am going to guess that no additional trustees were set up and your mother was the only one. Therefore they require additional information.

Fairwinds

Thanks that makes sense then - that is the reason they have given - no additional trustees were appointed - although I'm sure that was never pointed out as a requirement.

Paul_Varjak

Any payment from the trust would have to be paid to the trustees, who then distribute in accordance with what the trust says.

As your mum was the only trustee there are no trustees to make the payment to. I am not sure what happens in this situation but I would assume the life assurance company effectively becomes the trustee, ensuring the money is distributed in accordance with thr terms of the trust.