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Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 26070
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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15 years ago My mother wrote her small life policy in trust

Resolved Question:

15 years ago My mother wrote her small life policy in trust to my sister, £3000 ,it was taken out to pay funeral costs. My sister was the only named trustee. My sister died a few ago before my mother. I now need the money from the policy to pay funeral costs does the trust transfer to her child or husband or will it come back to the estate.? I am the executor on her will.
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.
Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

I note that your sister was the sole trustee of the trust policy. For the avoidance of doubt do I understand correctly that your sister was the sole named beneficiary of the trust policy please?

Joshua :

Does your sister have any children?

Joshua :

Do you know if the trust is a bare trust or a discretionary trust - if you are not sure don't worry.

Customer: My sister has a child he's 8 years old. I think it's a discretionary trust. It's through Aviva. The problem is my mother fell out with my sisters husband after my sisters death so if the trust goes to them they won't realease the money to pay funeral costs
Customer: My sister was the only named trustee and was single at the time of the policy being set up.
Customer: It's a flexible trust
Joshua :

Thank you. If your sister has passed away then

Joshua :

my apologies, I hit enter to early...

Joshua :

if your sister has passed away and she was the only trustee of the trust, the first issue is that of who is to replace her as trustee. Normally the trust will provide that your sister or the settlor (your mother) can appoint additional trustees however that does not assist if both of them have sadly passed away.

Joshua :

In the circumstances, the terms of most trust policies of this type provide that Aviva trustees will decide how to allocate the money held in trust

Joshua :

If there is no such provision in the trust (which can often be the case) then the personal representatives (executors) of your sisters estae have the right to act as trustees of the policy

Joshua :

accordingly, the first step is to contact Aviva and confirm with them whether there are any provisions in the trust dealing with the death of the last trustee of the trust. If there are then they will advise what these provisions are - if such provisions exist, they will be right for Aviva trustees to appoint new trustees. If no such provision exists, which quite possibly is the case, then it will fall to your sisters executor or administrator to administer the policy as new trustee.

Joshua :

Do you know if your sister made a will and if so, who she appointed as her executor?

Customer: I'm not sure but I imagine her husband is her executor
Customer: Aviva told me yesterday it will go to my sisters estate but previously told me it would just go back to my mums estate
Joshua :

Thanks. If she made a will then she will have appointed an executor in the document. If no will was made, then her husband would have the first right to act as her administrator under the intestacy rules. Accordingly it may be that her husband has the right to act as the new trustee of the policy unless there is a provision in the trust allows Aviva to appoint replacement trustees in the event of the death of the last remaining trustee - Aviva can confirm if such a provision exists in this trust policy though often there will be no such provision.

Customer: Ok thanks I'll contact aviva
Joshua :

whether or not your sister's husband has the right to act as trustee of the trust as above, the terms of the trust will endure the death of your sister.

Joshua :

What this means is that one trust will provide for one or more beneficiaires you are eligible to benefit from the trust funds. This may be named individuals (e.g. your sister) or groups of individuals (e.g. "my children and grandchildren).

Joshua :

Again Aviva can confirm who was named as eligible. the replacement trustee has the power to pay the trust proceeds to any person named or any person answering the description of a beneficiary named in the trust. If you are included as a named beneficiary or under a class of beneficiary then it is possible for the trustee to pay the trust proceeds to you

Joshua :

Finally, in respect of your mother's funeral expenses, do remember that you are not personally liable to pay your mother's funeral expenses unless or until you personally instruct undertakers to provide for a funeral.

Customer: I am sole beneficiary for her estate and executor of her will if that helps.
Customer: I instructed them on thinking this policy was going to pay for it as she told me
Joshua :

also, even if you have instructed undertakers and so are personally liable to them, if your mother had any assets left in her estate at the time of her death, you are entitled to make a claim against her estate in respect of those reasonable funeral costs incurred. If you act as beneficiary and executor of your mother's will, and if your mother did leave any funds accounts or assets, you can simply make a claim against those to pay the cost of the funeral irrespective of the issue of the Aviva policy your mother made.

Joshua :

If your mother did not leave any assets or sufficient assets to pay the costs of the funeral, you may seek payment of those costs from the above policy subject to the terms of the trust as we discussed above and establishing who has the right to act as the new trustee of the trust.

Joshua :

The first step therefore is to contact Aviva to find out who has the right to replace your sister as trustee in the circumstances and who is named as potential beneficiaries under the trust.

Customer: There's about £2500 left , she had nothing really but I was hoping to have that 3000 as well as I'm clearing her house out etc which is costing as its council and they need it emptied
Joshua :

If you contact Aviva to find out who has the right to replace your sister as trustee in the circumstances and who is named as potential beneficiaries under the trust you may find that you are eligible to receive a payment from the trust and can ask for a payment from the replacement trustee once that Trustee has been identified as discussed above.


Customer: Ok thanks I'll check the trust wording first with Aviva.you've been very helpful
Joshua :

If I can assist any further as the situation develops please do not hesitate to revert to me

Joshua :

The position will be clearer when you have confirmed the terms of the trust policy as above.

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though

Customer: I've just received the letter from Aviva in the post it says, my mother and sister were both trustees and as my mother survived my sister she was the last surviving trustee and therefore I ,as executor of her estate, am now a "constructive trustee"
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