I am trying to deal with a life assurance policy that has been written into trust. It assures the life of H, who has died, and his widow W is the sole trustee. W has lost mental capacity. My client is attorney to W under a lasting power of attorney, but the life assurance provider is declining even to give us any information about the policy other than to state that we need to change the trustees. It is difficult when we don’t even have a copy of the trust deed.
Would this require a court application, or is there an easier way of dealing with things (eg, although not ideal, perhaps wait until W dies and then have her personal representative step in)?
And that is why you should have more than one trustee! Section 36 Trustee Act 1925 deals with appointing new or additional trustees if a trustee is incapable of acting, but that power is reserved to a nominated appointor or the surviving trustee, or their personal representatives, so does not assist. In any case section 36(9) says if the incapable trustee is also a entitled to a beneficial interest, as seems likely here, “no appointment of a new trustee in his place shall be made … without leave from the Court of Protection.”
I often have life companies or professional trustees refusing to give information about trust assets to registered attorneys under an LPA. I understand attorneys can not act as a trustee, but surely they can act on behalf of a settlor (hopefully with power to appoint) or as a beneficiary and at least get a trust statement?
I would be inclined to point out to the life company that unless it is willing to provide a copy of the trust instrument, it is not possible to identify who, if anyone has power to appoint replacement trustees.
If the life company remains uncooperative, consideration might also be given to suggesting that if it is necessary to apply to court for release of a copy so that the trust may be regularised, the court will be petitioned to award costs against the life company. Whoever is dealing with the matter there might be encouraged to consult their legal team befre responding.
If an application to court was then made, I believe the court may well accede to such a request if it agrees the life company has been acting unreasonably.
As an aside, if the policy is pre-22 March 2006, I may well be a discretionary trust, terminating on the second anniversary of the death of the (last surviving) life assured, at which time the policy proceeds will vest in the named default beneficiaries in the absence of a valid appointment amongst the discretionary class. If that is the case, W will not have a relevant interest in the trust requiring the CoP to be involved in the appointment of replacement trustees for her.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals