The surviving spouse has died so the policy proceeds will be payable to Trustees for distribution to the settlors’ children. The spouses were lives assured, settlors & Trustees their, now retired, solicitor was also a Trustee. The Trust Deed produced for the Settlors by the life insurance Co does not include a settlor exclusion clause. The settlors completed the Deed in 1984 showing their children (all over 18) as “current IIP beneficiaries” the Deed allowed the Settlors, during their lifetimes, to Appoint benefits away from the “Current Beneficiaries” but they did not do so.
The settled policy had no value until the widowed spouse died, so immediately before her death it had no value.
In the circumstances can I rule out any settlor interested IHT problem?