I have an estate whereby the Deceased had set up two life insurance policies, assuring the lives of himself and his spouse. Both policies form part of his estate and are not written in Trust, but continue until the death of the spouse.
Is it possible to draft a Deed of Variation so the policies may be encashed and paid to the Deceased’s children now rather than on the spouse’s death?
If these are both joint life/second death policies, have you checked with the insurer what the terms of the policies permit?
The owners of a life policy and the identity of the life or lives assured are not required to be and often are not the same persons. The OP does not clarify this but does state that the policies are not held in trust (so presumably excluding one under the MWPA: IHTM20181-5).
They sound like joint life and survivor policies, maturing on the survivor’s death. This type of policy is generally written because on the first death no IHT will be payable (by spouse exemption and/or NRB(s)) whereas it will on the survivor’s death. It is odd for the policy not to have been written in trust because its market value will be taxable in the estate of the first to die, unless left to the surviving spouse, and will be taxable on the second death. The OP does not say who does inherit the policy. Again, there is only the hint that the policy has a market value, so may be a savings policy which could be surrendered now for cash by whoever has inherited it, subject to any income tax charge.
We are not told about possible surrender options or any other key policy terms. In short it is impossible to answer without reams of speculation about the alternatives as the information in the question is too selective and condensed.
Jack Harper