Put Your Affairs In Order Today – Or Your Loved Ones May Suffer!
In a case which proved the wisdom of putting your affairs in order before it is too late, a High Court judge’s intervention was required to ensure that the £500,000 proceeds of a deceased father’s life insurance policy went to his three children.
When divorcing the children’s mother, the father had undertaken to execute a trust whereby the policy would be held for the benefit of the children. However, the terms of that trust were never agreed and instead the father executed two other trusts which did not achieve the objective that had been envisaged.
Following his death, the result was confusion as to who was currently entitled to the income and capital of the policy proceeds. Although mediation resulted in an accord, an application to the Court was nevertheless required to sort out the muddle because one of the children was still a minor.
Employing powers conferred by the Variation of Trust Act 1958, the judge varied the two trusts so as to give the two older children an immediate and absolute entitlement to two thirds of the proceeds of the policy. Expressing confidence that the youngest child would not waste her inheritance, the judge directed that the remaining one third should vest in her when she reached the age of 18.