Does a creditor have any rights/access to a Life Insurance once they have Judgment

[honeybee13]

Oh, thank you HB!

 

Do you mean so that you can then post the docs on here, or do you mean that you will be able to peruse them and offer your own advice please?

 

I hope to be able to borrow a scanner by Monday or Tuesday.

 

Hi. Have a go to see if you can upload images onto the site, but if that fails you can email them to me, then they can go on your thread.

 

It's not something I advise on, I'm just trying to help you get the information to the legal guys. I'll send you a PM.

 

HB

[Toots111]

Cheers, you're very kind.

 

I won't bother you unless I really have to HB, so I'll give it my best shot as soon as I get my hands on a scanner. Fingers crossed!!

 

Have a lovely weekend,

 

Toots.

[honeybee13]

Good luck with the technology, I'll be around if you need help.

 

HB

[dx100uk]

toots

 

 

follow this

 

 

you can use a camera yes.

 

 

HOW TO UPLOAD DOCUMENTS / IMAGES ON CAGi

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IMPORTANT To protect your IDENTITY and ensure you remain ANONYMOUS on CAG please ensure that you do a final check that all Personal Information including Barcodes, Names, Addresses etc. are REMOVED before carrying out the NEXT STEP

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[dx100uk]

if you want toots

 

 

take the photos and send them to me via an email address

 

 

do you want one?

 

 

dx

[Toots111]

Praying that this has worked; I've been trying for hours and hours .

[Toots111]

I think I've finally managed, although I have no idea how.

 

Hoping now that Sadie and steampowered can have a good luck at these docs

and let me know whether it's the right type of trust to fully protect the policy;

ie, it won't form part of my estate/go through probate when I die,

nobody else can ever gain access to the policy or proceeds other than the named beneficiaries??

 

I am totally bamboozled by the docs;

 

 

I can find the words 'bare', 'revocable', 'irrevocable' etc scattered throughout out them, so I have no idea exactly what type of policy it is??

 

I'll be extremely grateful if somebody can let me know whether I'm okay with this trust.

 

Many thanks,

 

Toots.

[Toots111]

if you want toots

 

 

take the photos and send them to me via an email address

 

 

do you want one?

 

 

dx

Hi dx,

 

Many thanks for your posts, which have finally helped me to get the docs onto here, (I hope).

 

I think it was just good luck, rather than knowing what I was doing, but your kind help has got me there in the end!!

 

Hoping that somebody will get back to me regarding the trust I've got.

 

Cheers,

 

Toots

[Toots111]

As I understand it, under a revocable trust you are the 'trustee' and can revoke the policy up until your death. Since the policy can be revoked it is in theory available to creditors up until your death (but not afterwards). On the other hand, an irrevocable trust permanently passes ownership to the beneficiaries and hence is not available to creditors.

 

However, as I understand it, a revocable trust is still quite difficult for creditors to access. I am not an expert but imagine they would either need a court order, or would need to make you bankrupt (so that your affairs pass to the Official Receiver) to have the policy revoked. In practice I think it would be difficult or impossible for the creditors to actually find out about the policy.

 

So, you'd be better off with an irrevocable trust and it is worth changing if you can, but in reality probably still OK with the current arrangement.

 

Feel free to have a go at posting a scan of the revocable trust documents (with personal details covered up) if you want input on that ... it might be possible to do an amendment.

 

Hi again,

 

I think I've just managed to post the trust docs on here, so whenever you have time, please can you have alook at them and give me your advice??

 

Many thanks steampowered,

 

Toots.

[Toots111]

A bare trust is one where the person who benefits from it (referred to as the beneficiary) has an immediate and absolute right to the assets that are transferred to the trust and any income generated by them.

 

The assets transferred into a bare trust are known as “trust property” or the “trust fund”. The trust fund is held in the name of the trustee, who may (but doesn’t have to) be the person who sets the bare trust up. Usually, there are two trustees involved; often the person setting up the trust and one other.

 

A person setting up a bare trust can be certain that the assets they set aside for the beneficiary will go to that person because once the trust has been created, the beneficiary cannot be changed.

 

As the beneficiary has an immediate and absolute right to the trust fund, the trustees have no discretion over the trust fund and must simply follow the (lawful) instructions of the beneficiary in relation to it. The beneficiary can therefore instruct the trustees to transfer the trust fund into his name at any time. Until then however, the trust fund will remain in the name of the trustees.

 

On the death of the beneficiary, the trust fund will form part of his estate and will be distributed according to the terms of his will, or by the laws of intestacy if there is no will.

 

A bare trust is usually evidenced by a trust deed which will set out the parties involved (ie. the person setting the trust up, the trustees and the beneficiary) and what assets are being transferred into it. The trust deed is signed by the person setting the trust up and the trustees, but not by the beneficiary.

 

Sadie

 

Hi Sadie,

 

I'm probably sending far too many messages to people, but I'm never sure whether anything I post will always be flagged up to anybody who's trying to help, so I always feel it necessary to send individual messages .

 

Anyway, after many hours of trying, I think I have finally managed to post the trust docs on here, so would be very grateful for a definitive answer as to whether it is okay for me to keep please? I can find the words 'bare', 'revocable', 'irrevocable' ets scattered throughout, and can read it in so many different ways, I'm utterly confused.

 

Many thanks in anticipation,

 

Toots.

[dx100uk]

everyone who has posted on your thread

will automatically be alerted when anyone posts.

 

 

as you are via this email

 

 

dx

[Toots111]

everyone who has posted on your thread

will automatically be alerted when anyone posts.

 

 

as you are via this email

 

 

dx

 

Oh, I see, thank you dx, that will save me a lot of time!!

[steampowered]

I think you are all good Toots111. That seems to be an irrevocable trust. Clause 8.2 in particular makes it clear that ownership of the policy has transferred to the trustees (to hold on behalf of the beneficiary) and cannot be recalled to the person setting up the trust. It shouldn't be accessible to creditors or be treated as part of probate.

[Toots111]

I think you are all good Toots111. That seems to be an irrevocable trust. Clause 8.2 in particular makes it clear that ownership of the policy has transferred to the trustees (to hold on behalf of the beneficiary) and cannot be recalled to the person setting up the trust. It shouldn't be accessible to creditors or be treated as part of probate.

 

Hi steampowered, thanks for your reply.

 

However, as I am also a trustee, (so 3 trustees in total), doesn't that mean that I am an owner of the policy please? As such, from what I have researched, doesn't that mean that a creditor can therefore force me into whatever action they desire??

[honeybee13]

Hello again and well done with posting the document

 

In it, there is a sentence that says the Trustees are holding any assets for the beneficiary/ies. I would have thought that didn't make you an owner. I'm sure the legal guys will confirm.

 

HB

[Toots111]

Hello again and well done with posting the document

 

In it, there is a sentence that says the Trustees are holding any assets for the beneficiary/ies. I would have thought that didn't make you an owner. I'm sure the legal guys will confirm.

 

HB

 

Thanks HB, praying you're right!!

[steampowered]

Hi steampowered, thanks for your reply.

 

However, as I am also a trustee, (so 3 trustees in total), doesn't that mean that I am an owner of the policy please? As such, from what I have researched, doesn't that mean that a creditor can therefore force me into whatever action they desire??

The trustee's role is to hold the property on behalf of the beneficiaries. The trustee can't take the trust property for his/her own purposes.

 

You are also the settlor - see clause 8.2 which prohibits the trust property from being applied for your benefit. I don't think you could revoke the policy even if you wanted to.

 

If you are concerned (I don't think you should be concerned) you may remove yourself as trustee (see clause 7.5).

[Toots111]

I've just sent a long post, which has taken me half an hour to put together, but it's not here . What has happened to it anybody please?? I feel like I'm going mad.

[Toots111]

The trustee's role is to hold the property on behalf of the beneficiaries. The trustee can't take the trust property for his/her own purposes.

 

You are also the settlor - see clause 8.2 which prohibits the trust property from being applied for your benefit. I don't think you could revoke the policy even if you wanted to.

 

If you are concerned (I don't think you should be concerned) you may remove yourself as trustee (see clause 7.5).

 

Right, I don't know what's happened to the long post I sent earlier, but I'm now going to attempt to do it again. (Although I'll probably forget half of what I was asking on the initial one!).

 

Thank you steampowered.

 

I am basically trying to be 100% reassured that no creditors will ever be able to get their hands on the policy or it's proceeds, so that my daughters will have something to pay for my funeral with, and a small amount left over. I've just received my 1st CCJ, with another to follow shortly, so my stupid brain is in turmoil and this issue about the trust is driving me more mad than usual.

 

The notes at the beginning say that the Trustees are the legal owners of the policy, so it worries me that a creditor may be able to attach themselves to the policy, and gain the proceeds after I die.

 

For the life of me, I can't understand what 8.1, 8.2, 8.3 and 8.4 mean - 8.1 to 8.3 worry me, as the words 'revocable' and 'irrevocable' appear, although 8.4 seems to be saying that the Settlor is an Excluded person and that this exclusion shall not be revocable. If I am an excluded person, even though I am a legal owner of the policy, does that mean that as there will never be any monies due to me, a creditor could not gain access to the monies please??

 

Will this Trust definitely not form part of my estate and therefore not have to be mentioned in my will, or go through probate?

 

Part C, Key Provisions, 4.1 makes it sound as though the trust can be changed, as it says 'which may be revocable during the Trust Period', but then says 'or irrevocable'????? 4.2 also gives the impression that the Trustees have the power to alter things and if this is an irrevocable trust, surely this wouldn't be the case?

 

6.3 also seems to be saying that the Trustees have the power to do things that I thought an irrevocable trust would not allow?

 

7.3 says that the Settlor has the power to appoint new Trustees, so could a creditor force me to add themselves as a new Trustee please? If so, they would obviously have the same power as the other Trustees?

 

8.2 gives me hope, as it is saying that the Settlor cannot gain from the Trust, (although I'm not sure why my exclusion from any proceeds gives me hope; I think I'm losing the plot in trying to understand what anything means !!!!).

 

I think the bottom line is that I'm praying that somebody on here can tell me, irrefutably, that this Trust is protected fully from my creditors? I need to be sure in my own mind that my daughters will get the proceeds. I have nothing else to leave them, so that's why I'm so stressed about this matter.

 

Between yourself and Sadie, I'm just hoping that you can confirm that this Trust is the right type for somebody in my position and that I can lay it to rest and concentrate on all of the other yukky things happening in my life at present. One thing laid to rest would be such a relief!!

 

Many thanks,

 

Toots.

[Toots111]

I knew I'd forget something; as the Trust docs show, this is a Discretionary Trust and from what I can gather, this type of trust is used where the Settlor wants the freedom to make changes to beneficiaries at any time?

 

If so, could a creditor force me to delete my present beneficiaries and add them instead please? (I'm thinking that this is a really important point).

 

Sorry to anybody who is reading/will read all of my diatribe today, I'm just trying to make sure I've covered every point that's worrying me.

 

I'm sure that's it now!!

[steampowered]

The notes at the beginning say that the Trustees are the legal owners of the policy, so it worries me that a creditor may be able to attach themselves to the policy, and gain the proceeds after I die.

 

This is referring to the distinction between legal/beneficial ownership. You can find information on the subject online. In essence, the legal owner is the person who is the registered owner of a piece of property. The beneficial owner is the 'real' owner who is entitled to the property.

 

The legal owner of a property is the trustee. The beneficial/equitable owner is the beneficiary. This is a concept which applies across the law - for example, when someone dies the executor is the trustee and the persons due to inherit in the will are the beneficiaries. Another example - when you buy a house and send the money to a solicitor, the solicitor is the trustee (legal owner since the money is in the solicitor's bank account) but you are the beneficiary (beneficiary owner since belongs to you).

 

It is important to understand that the trustee only holds the property for the beneficiary. The trustee can't just take the property for his/herself.

 

For the life of me, I can't understand what 8.1, 8.2, 8.3 and 8.4 mean - 8.1 to 8.3 worry me, as the words 'revocable' and 'irrevocable' appear, although 8.4 seems to be saying that the Settlor is an Excluded person and that this exclusion shall not be revocable. If I am an excluded person, even though I am a legal owner of the policy, does that mean that as there will never be any monies due to me, a creditor could not gain access to the monies please??

8.1 says the Trustees can declare that certain beneficiaries are not entitled to get the property. That is more relevant where you have a trust in favour of (for example) every student who graduated from Cambridge university during 2011, rather than a trust to benefit clearly defined individuals such as your daughters.

 

8.2 disregard

 

8.3 says a declaration made under 8.1 may be revocable or irrevocable. This has nothing to do with whether the trust itself is revocable or not.

 

8.4 says you are en Excluded Person. As set out in 8.1, this means you are totally excluded from benefiting from the trust fund and hence the money is not available to your creditors.

 

Part C, Key Provisions, 4.1 makes it sound as though the trust can be changed, as it says 'which may be revocable during the Trust Period', but then says 'or irrevocable'????? 4.2 also gives the impression that the Trustees have the power to alter things and if this is an irrevocable trust, surely this wouldn't be the case?

The revocability referred to in clause 4.1 is revocability of decisions about how to allocate the trust fund between beneficiaries, not revocability of the trust itself.

 

6.3 also seems to be saying that the Trustees have the power to do things that I thought an irrevocable trust would not allow?

No, it is common to see the trustees given very broad powers to use the trust funds as they see fit.

 

7.3 says that the Settlor has the power to appoint new Trustees, so could a creditor force me to add themselves as a new Trustee please? If so, they would obviously have the same power as the other Trustees?

Trustees are under statutory and common law duties to act in the interests of beneficiaries, not themselves.

 

8.2 gives me hope, as it is saying that the Settlor cannot gain from the Trust, (although I'm not sure why my exclusion from any proceeds gives me hope; I think I'm losing the plot in trying to understand what anything means !!!!).

Yes, 8.2 is very clear that the proceeds cannot be applied for your benefit. Payment of creditors would be an application for your benefit. To be honest this clause is not necessary as that is the whole concept of a trust, but I guess they might as well make it explicit.

 

I think the bottom line is that I'm praying that somebody on here can tell me, irrefutably, that this Trust is protected fully from my creditors? I need to be sure in my own mind that my daughters will get the proceeds. I have nothing else to leave them, so that's why I'm so stressed about this matter.

Yes, I am quite comfortable in telling you that this Trust is fully protected by creditors. You couldn't access the trust property (i.e. the insurance policy) even if you wanted to.

 

I knew I'd forget something; as the Trust docs show, this is a Discretionary Trust and from what I can gather, this type of trust is used where the Settlor wants the freedom to make changes to beneficiaries at any time?

Not the Settlor. Once a trust is in place, the Settlor no longer owns the property or has any control over it.

 

A fixed trust is where (for example) each beneficiary is entitled to 50% of the trust property. A discretionary trust means that the share of each beneficiary is not fixed. The trustees can allocate the trust funds between beneficiaries, but you still have to be a beneficiary to get anything.

[Toots111]

THANKS SO MUCH steampowered, you're a star!!

 

I'm feeling a lot easier after reading your replies and am only left with two or three last questions, if you have the patience to reply again !

 

I don't know how to highlight/separate topics etc like you, but from the top of the last post;

 

Under 8.1, would it be necessary, or worth my doing, to add a clause to say that my creditors are excluded people please?

 

Under 7.3, if Trustees are there to act in the interests of the beneficiaries, is it/could it be, a problem that my two daughters are both Trustees and beneficiaries please? Should I have chosen somebody else to act as Trustees, instead of them? (Although I don't really have anybody else close enough to trust).

 

I've researched trusts so much over the past few days, ( maybe I should retrain as a solicitor now, although way too old unfortunately!!), and have repeatedly read that Discretionary Trusts allow Trustees to change beneficiaries. If that's correct, as I am the Settlor AND a Trustee, doesn't that mean that I have the power to make such changes, (in which case couldn't a creditor force me into adding them as a beneficiary?)? Or, would it need all 3 Trustees, myself and my daughters, to make any amendments to the beneficiaries please?

 

See, I'm almost there with my understanding, after getting your input steampowered . Just these last few points to clarify in my head and I think I might be able to let it go and concentrate on my other problems at last.

 

If I could hug you, I would!!

[SADIE DE RUE]

Hello Toots

 

According to Hayton & Mitchell: Commentary and Cases on the Law of Trusts and Equitable Remedies Thirteenth Edition, the interests of the beneficiaries are paramount and the irreducible core content of the trust concept consists of a duty of the trustee to act for the beneficiaries’ interest, without this, a trust would not exist at all.

 

Ownership of trust property is vested in the trustees (or their nominees, although the trustees technically then own an interest in the property owned by the nominees), to be managed and dealt with wholly for the benefit of the beneficiaries – Smith v Anderson (1880) 15 Ch.D. 247

 

Therefore, under the trust instrument, you are holding funds/assets in trust for the beneficiaries only and the trust falls outside of your Estate for IHT/Probate purposes and as such, no creditor can make any claim against the trust property.

 

You can relax on this issue now with peace of mind in the knowledge that your children will receive the whole benefit of the funds/assets due and owed to them in law under the trust created by you.

 

The above matters together with Steampower’s posts here should enable you to concentrate on the other “yukky” matters. I wish you a Merry Christmas & a Happy New Year.

 

Sadie

[Toots111]

Ooops, one last thing that you didn't answer; is this the correct type of Trust to bypass my estate/will, and therefore probate please?

[SADIE DE RUE]

Creditor cannot force your hand to amend the trust, firstly because the trust falls outside of your Estate and secondly the powers confered under the trust to make any amendments are confered on trustees, thirdly the irreducible core concept of the trust cannot be interfered with/violated by your creditor.

 

Sadie