Q&As

The settlor of a life insurance trust wishes to terminate the trust and have the policy transferred to them so that the proceeds of the policy will form part of their estate on death. Is this possible and, if so, how can it be achieved?

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Produced in partnership with Lynne Counsell of Addington Chambers
Published on: 27 March 2020
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Life insurance policies

There are two main types of life insurance policies:

  1. •

    whole of life—which pays out the proceeds no matter how long a person lives. The object of such a policy is not to provide dependants with income, but rather they are used for tax planning or to provide an inheritance for specified persons

  2. •

    Term insurance—which pays out a lump sum payment or income to dependants if a person dies within the period specified. The object of term insurance is to provide for living expenses for dependants after death or, for example, to pay off a mortgage or tax liabilities

Policies written in Trust

Either type of policy can be written in trust. This can be an absolute trust with a specified beneficiary or beneficiaries or a discretionary

Lynne Counsell
Lynne Counsell

Barrister, Addington Chambers

Lynne has been in traditional Chancery practice for some thirty years, specialising in probate matters, construction of wills and trusts and also financial services and drafting.

Lynne was for some years counsel for Tower Hamlets, representing them on landlord and tenant cases and counsel for Bedford Building Society representing it on mortgage cases.

Lynne has written or updated over fifty books, including writing the initial volume of Atkin’s Court Forms “Financial Services” and updating Halsbury’s Laws on Injunctions. Lynne was also co-author of two editions of “Insider Trading” and co-editor and one of the writers of “Chancery Practice and Procedure.”

Articles include “Marketing of Investments” for the Law Society Gazette and “The Doctrine of Mutual Wills” for the Trust Quarterly Review. Lynne won one of the few cases on mutual wills in the last fifty years – Charles v Fraser (2010).

Lynne has drafted the standard unit trust for the government of Nigeria, the rules and related documentation for various building societies and clubs, shareholder agreements, company takeovers compliance documentation for certain banks as well as wills and trusts.

Lynne was awarded the 2017 Corporate international Magazine Global Award – “Investment Contracts Barrister of the Year in England”.

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Jurisdiction(s):
United Kingdom
Key definition:
Settlor definition
What does Settlor mean?

A settlor is the term given to an individual setting up assets under a trust. The settlor agrees the provisions of the trust deed, appoints the trustees and specifies the beneficiaries under the trust.

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