Mortgage endowment policy question: - divorce, death payout problems

kernow1

Hello,
There seem to be a lot of knowledgeable posters in this forum so I thought it was worth a try posting to try and help my mother out. Here's the situation:
She and my father took out a mortgage together in the early 80s.
They divorced in the late 80s and the deeds of the house were transferred entirely to my mother. Both mortgage and endowment policy were apparently transferred also to my mother alone. The mortgage was with Woolwich and the endowment with CIS.

The two policies finish at the end of March. Now my mother is being told by CIS that they never received the appropriate documentation transferring the policy to my mother, despite her having asked the representatives that once visited the house to collect payments many times that this was definitely resolved. They always told her it was fine, it was in her name alone. CIS are now saying that, as my father died in 1999, my mother should have then received a death payment and that she will now receive this and all payments after 1999 will be refunded to her. This results in a much smaller payout than she was expecting.
She has sent off various documents to CIS but they have so far said none of them are acceptable, that they must have something stamped by a court. She visited Barclays in search of suitable documents with reference to her Woolwich policy but they have told her that documentation has not been transferred from the Woolwich to Barclays and that most things are destroyed after 6 years for data protection.

All this is very alien to both me and my mother, so if there are experts reading that can lend a hand it would be most appreciated. What are the rules in this sort of situation, and what documents should she have provided, and what must she supply now in order to rectify the situation?
I realise some parts may still be vague, so if more information is needed in order to help please tell me exactly what and I will try to supply it.
Thanks in advance!

kernow1

Unfortunately I didn't have any replies and CIS are still refusing to pay.
My mum is really quite worried now, she stands to lose many thousands.
Any offers of help would be greatly appreciated.

ThriftyBeanie

I don't think you'll get very far on your own. I am no legal expert but I would have thought that the burden of proof rests with your Mother to demonstrate that the policy had been changed.

Why don't you gather up all the documents and evidence you have, go along to your local Citizens Advice Bureau and see whether they think it might be worth pursuing?

robnye

surely the amount they are going to pay out is the minimum death penalty value,
also i wasnt aware that a joint endowment policy coul dbe trasnferred over to a single person.... but i am prepared to be corrected.

if in doubt couldnt you query it with the financial ombudsman?

silvercar

Most endowment properties from the 80s included life cover. I would have thought that the payout on death + a refund of premiums would be higher than the maturity value of the policy by a long way.

Dick_here

My understanding is that a joint policy can be assigned to one person, but even then the joint life covers remains. Therefore, the death benefit - which is normally the mortgage amount - should have been paid out in 1999.

So I don't see that your mum has lost out if she gets that now, all premiums paid since refunded, and hopefully an extra payment as an apology/interest etc.

kernow1

Many thanks for the replies.
She has a court document stating that the house and mortgage should be transferred to her sole name but apparently the wording is not "specific" enough for the CIS endowment despite being sufficient for the mortgage with the Woolwich.
Incidentally, the Woolwich have lost the original documentation provided, and CIS claim never to have received it. Can something be done to penalise the Woolwich if they have lost a vital document?

Yes, I know - I have been telling her to contact the ombudsman for two months now and thankfully I think she is going to today.

With regards to the other comments:
The situation seems to be as the last poster said: That the mortgage value is covered and all premiums paid since refunded, but that is significantly less than the value of the policy otherwise. Thousands have been paid in since 1999 and obviously inflation has eroded the original payments and also the endowment policy has done quite well in the last 8 years.
Surely they cannot simply refund the premiums without any interest? They would have lost a quarter or so of their value just due to inflation?

dunstonh

She has a court document stating that the house and mortgage should be transferred to her sole name but apparently the wording is not "specific" enough for the CIS endowment despite being sufficient for the mortgage with the Woolwich.

That is the correct stance for CIS to take. The endowment policy is a standalone investment plan and niether a house or a mortgage (I dont mean that rude but you have to think logically at the wording and what is being said). The court document should state endowment policy if that was included.

CIS are now saying that, as my father died in 1999, my mother should have then received a death payment and that she will now receive this and all payments after 1999 will be refunded to her. This results in a much smaller payout than she was expecting.

It doesnt matter what she was expecting. CIS are quite correct in saying that the sum assured and refund of premiums following death is what she is due. If she was expecting more than she has an unrealistic expectation that has no basis in fact.

Incidentally, the Woolwich have lost the original documentation provided, and CIS claim never to have received it. Can something be done to penalise the Woolwich if they have lost a vital document?

You said in post 1 that they destroyed it as it was 6 years after the event. That is also correct so they have done nothing wrong. They havent lost it.

Yes, I know - I have been telling her to contact the ombudsman for two months now and thankfully I think she is going to today.

You cannot go to the FOS like that. All they will do is return her letter back to CIS. You have to go through the official complaints process. However, there is nothing to complain about and CIS are acting within the law and have a responsibility to make sure that the proceeds go to the correct beneficiary. At the moment, you are claiming you are due the money but if it isnt you (and assuming policy is single life) then the proceeds would be paid into your Fathers estate and distributed according to his will.

If the policy was single life on your father and assigned to your mother then CIS would know about it and your Mother would have received an endorsement to add/keep with the policy document. I have done a few assignments due to divorce and in each case the solicitor acting on the behalf of the client has always requested confirmation that the transaction has taken place.

I would suggest she goes back to the original solicitor that handled her divorce and seek clarification on whether this endowment was meant to be assigned to her or not and if so, ask them for evidence of this as the solicitor would keep copies of the documentation.

kernow1

Thanks for the input, dunston.
...and for some clarifications - when the Woolwich says it doesn't have a document and makes an excuse, you can't be sure that they are telling the whole truth, so it's good to know that this destruction of documents after 6 years is the correct procedure. They sent my mother a huge bouquet of flowers after she went in, which strikes me as very suspicious for a huge greedy institution like Barclays and made me think they were trying to cover some tracks.

I'd like to ask a couple of things:
At the time of the divorce, there should have been a document which mentioned specifically that the house, mortgage and endowment should all be transferred solely to my mother if that was what had been decided upon? Would this have been one document that stated all of that or seperate documents for each matter?

This confused me a bit:

and CIS are acting within the law and have a responsibility to make sure that the proceeds go to the correct beneficiary. At the moment, you are claiming you are due the money but if it isnt you (and assuming policy is single life) then the proceeds would be paid into your Fathers estate and distributed according to his will.

If the policy was single life on your father and assigned to your mother then CIS would know about it and your Mother would have received an endorsement to add/keep with the policy document. I have done a few assignments due to divorce and in each case the solicitor acting on the behalf of the client has always requested confirmation that the transaction has taken place.

When you say "you" do you mean my mother? Assuming my father was never correctly taken off the policy, should the payment have gone to my mother or to his estate? If it is the latter, what effect, if any, would this have on the policy?

dunstonh

...and for some clarifications - when the Woolwich says it doesn't have a document and makes an excuse, you can't be sure that they are telling the whole truth, so it's good to know that this destruction of documents after 6 years is the correct procedure. They sent my mother a huge bouquet of flowers after she went in, which strikes me as very suspicious for a huge greedy institution like Barclays and made me think they were trying to cover some tracks.

The banks don't normally take originals. They usually take copies or use certified copies so they wouldn't have any reason to check files first. Back in my banking days, one of the clerks had the role of doing things like sending flowers or sending letters etc. It can very much be down to the quality of the staff at the local branch though. It can also be down to marketing (if you want to cynical ). They suspect you are getting money so lets sweeten you up so you come see us to invest it.......

At the time of the divorce, there should have been a document which mentioned specifically that the house, mortgage and endowment should all be transferred solely to my mother if that was what had been decided upon? Would this have been one document that stated all of that or seperate documents for each matter?

I don't know if there would have been one document or multiple documents but it would have to have been documented somewhere as part of the settlement. The solicitor would know.

When you say "you" do you mean my mother? Assuming my father was never correctly taken off the policy, should the payment have gone to my mother or to his estate? If it is the latter, what effect, if any, would this have on the policy?

Your mother...

If the policy was not assigned to your mother it would be paid back into the estate. This would then be distributed as per his instructions in the will. So, the cheque would be payable to the executor of the estate to distribute or to the beneficiary. That may be the best and quickest solution here if your mother or even you would benefit. i.e. if it comes to you then you can write a cheque out to your mother.

CIS are treading a very difficult line here. Techncially, they cant really even speak to your mother as she is not the policyholder, life assured or beneficiary. So, whilst you (and/or your mother) are considering them being difficult, they are stuck between a rock and a hard place. If they pay out without evidence then they could fall foul of money laundering rules and be party to a fraud which could see someone at the CIS be imprisoned in worst case scenario.

I would suggest you find out if your father left a will and what the instructions were.

BTW, I am assuming this was a single life endowment. Can you confirm that is the case. I am making that assumption as a joint life, first death endowment would not have this issue.

kernow1

If the policy was not assigned to your mother it would be paid back into the estate.

I am assuming I am misunderstanding something here...it could not be the case that a policy in both of their names would pay out to the children if one parent dies, leaving the other with...no policy?

I am going to call my mother now so I'll get back with the other details in a mo -thanks again for the help!