I want to place an existing joint life first death policy in trust and include the settlors as potential beneficiaries without falling foul of GWR rules. Where I think there is genuine scope for exploration is whether a bespoke trust can isolate each settlor’s contribution so that the surviving spouse is only ever capable of benefiting from the deceased’s attributable share. If that analysis can be sustained, it might avoid the GWR problem that causes providers to normally exclude the survivor. Does anyone have any experience of whether this can be achieved? Writing new separate life policies is not feasible and 30 day survivorship clauses are not ideal. I have been assured by a law firm we use that it can be done but wanted to get a few second opinions first.
Who owns the policy at the moment? Who has been paying the premiums? What is the market value of the policy? What kind of policy is it?
Jack Harper
Husband and wife. Jointly owned at present. Premiums have been paid from joint account for past 5 years. Term assurance with 18 years left to run.
I’m wondering (also) if a jointly owned policy is beneficially severed first, while the legal title remains joint, has there been any transfer of value at the point of severance? I would guess that severance merely defines the beneficial interests already held by the joint owners, rather than transferring value between them, but I’d be grateful for your view on this as well as the GWR issue.