Flexible Survivorship Trust
Our Flexible Survivorship Trust is only suitable for joint life first death policies, where the intention is for the surviving joint owner to benefit from the sum assured payable on first death. Payment will be made to the surviving joint owner if he/she survives the first joint owner to die by 30 days. Otherwise, the policy proceeds will be held on trust for the possible beneficiaries in the same way as under the regular Discretionary Trust. As this is not a split trust the settlor cannot receive benefits from a terminal illness claim.
Key benefits
- Decisions about who will ultimately benefit can be changed
- Allows for surviving joint owner to receive death benefits (in the case of joint life, first death policies), but they bypass survivor and are held on discretionary trust if he/she dies within 30 days.
- Speed of payment.
Other information you need
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Flexible Survivorship Trust may be suitable for clients:
- Who hold/are applying for a joint life, first death policy.
- Who wish the surviving joint owner to receive the benefit on the first death, but also wish for it to bypass the survivor and be held on discretionary trust if the survivor does not survive for 30 days (thereby avoiding it passing through his/her estate).
- Who want the appointed trustees to have overall discretionary powers to decide who will receive any payment if the survivor dies within 30 days.
- Who are able to make an outright, irretrievable gift and have no requirement for access to the gifted amount, or any income generated, which would include for example, any entitlement to benefit from any critical illness or terminal illness that may be payable under any policy.
- Who want to avoid any delay in paying out the proceeds of their policy which may otherwise occur where probate (or confirmation) is required before payment could be made.
- Who understand that this trust may not be IHT-efficient because the policy may be treated as remaining in the settlors’ estates for IHT purposes (subject to the spouse exemption).
- Payment will be made to the surviving joint owner if he/she survives the first joint owner to die by 30 days. Otherwise, the policy proceeds will be held on trust for the possible beneficiaries in the same way as under the regular Discretionary Trust.
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- For clients who wish the surviving joint owner to receive the benefit on the first death, but also wish for it to bypass the survivor and be held on discretionary trust if the survivor does not survive for 30 days (thereby avoiding it passing through his/her estate).
- Who want the appointed trustees to have overall discretionary powers to decide who will receive any payment if the survivor dies within 30 days.
- For clients who wish the surviving joint owner to receive the benefit on the first death, but also wish for it to bypass the survivor and be held on discretionary trust if the survivor does not survive for 30 days (thereby avoiding it passing through his/her estate).
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- If you have decided that a Flexible Survivorship Trust is suitable for your client, please complete our e-signature trust form. OR
- If you prefer to use our editable PDF form, please send us the completed and signed trust documentation as soon as possible. This means that you can complete the form and email it to your client for them to print and sign.
Completed trust forms can be sent to us either by email (a scanned copy or even send a photo) or by post.
Please remember to include the relevant plan number and ensure that the form has been signed and dated.
Email: Protect@scottishwidows.co.uk
Address:
Scottish Widows Protect Servicing Team
PO Box 24171
69 Morrison Street
Edinburgh
EH3 1 HRPlease note: We cannot treat a benefit as being under trust until we have received the trust documentation fully completed and signed.
Important considerations
Trusts are documents with legal significance that may affect the rights, obligations and tax position of your client and the beneficiaries. You should not proceed unless you are satisfied that you understand its effect and that it achieves your objectives. If you have any doubts or uncertainties you should seek the appropriate legal guidance.
We cannot treat a benefit as being under trust until we have received the trust documentation fully completed and signed.