I have been asked to appoint an additional trustee to a Life Assurance Policy. The Settlor of the life assurance policy has died and the life assurance company are looking to pay out the proceeds of the policy. The settlor originally appointed three trustees. However two of those trustees have now died, and the remaining one has lived in France for a number of years.
The Life Assurance Company have told my client that if an additional trustee is appointed by the surviving trustee, they can pay the proceeds of the life assurance policy to them, to bypass the need of the French Trustee from needing to set up a UK bank account.
I do not yet have sight of the trust deed. However, I have a red flag about this, and experience tells me to follow that… Is there any reason why it would not be appropriate to appoint another Trustee? I can’t see CGT being an issue here as one would assume that as this is a life assurance policy, the value crystallises on death so there is no gain as such. However, where the Trustee is offshore, I think the concern I have is that technically it means the trust is offshore, and by appointing a second trustee in the UK, I understand that would bring the trust onshore. Though, even so, I can’t see what the issue might be even so.
Can anyone help me settle this red flag once and for all?
If there is an issue I suppose we could just appoint a Power of Attorney for the surviving Trustee to bypass any potential issues of appointing a new UK trustee. I’d just like to settle the niggle in my mind.
Many thanks all