I’m looking for some guidance in relation to a trust set up to hold a life policy in connection with a cross option agreement. The trust instrument is very narrow in its terms. The company has been dissolved with no successor. The only persons named within the class of beneficiaries are the directors of said company. There are no powers to add beneficiaries. The relationship between the former directors (only 2) has broken down and each are appointed as trustees. One of the former directors continues to pay the premiums and has been diagnosed as terminally ill and wishes to arrange for the terms of the trust to provide for spouse. I would be extremely grateful for any practical guidance/ advice in whether I would be correct in thinking that application to court may be the best way to resolve this matter or if there are any alternatives to consider.
The cross-option agreement will become void - “the company has been dissolved”. Youll need to check the clauses, it’ll be poor drafting if its not included.
On the death of D1, the monies will be paid to the trustees, in this case the director 2. It should be noted if 6 months to live, most polices will pay out before death.
No option agreement so D2 cannot complete the option and pay the monies to D1 widow.
If D2 is amicable, he could assign the benefits of the trust to D1 wife. Im unsure of the tax implications of doing so.
If D2 is not going to be hepful, Id suggest the policy needs to be cancelled.
N.B D1 should automatically be a trustee if the policy is set up with a UK life insurance provider. D2 should be able to retire - again if amicable.
