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UNCLASSIFIED
Bare Trust
Before you complete this form, we would recommend that you read our ‘Guide to Trusts’ and speak to a legal adviser. They will be able to help you decide whether a trust is right for you and, if so, which type of trust would suit your needs best.
Terminal Illness Cover
You can choose to put the terminal illness benefit into the trust or keep it as a retained benefit. If you do put it into the trust, we will pay any benefit for terminal illness to the trust and not to you. The trustees would then distribute the benefit according to the terms of the trust.
Once you, and the trustees that you choose, have signed this form:
all benefits payable under the Covers included in this form and not retained by you will be gifted to the beneficiaries; you will no longer be a beneficiary for the covers and Plans included in this form; and you cannot change the beneficiaries listed in the Declaration of Trust section, or add to them.
What is a bare trust?
A bare trust is a trust where the beneficiaries are entitled to the income and capital of the trust fund in the percentages determined by the settlor.
Putting an insurance plan, or parts of it, in trust is not right for everyone. Before completing this form, it is important to discuss your needs with your legal adviser.
Trusts and taxation
Normally, life protection policies that have been put in trust are not included in the estate of the deceased so there should be no inheritance tax to pay. It may not be necessary, therefore, to register this trust with Her Majesty’s Revenue & Customs (HMRC). If this trust is part of a wider gifting programme, there may be some benefits to registering this trust with HMRC. Your adviser will be able to tell you if you should register your trust with HMRC.
The laws for gifts and trusts may change in the future. AIG Life Limited cannot be held responsible for any information given or any changes in tax provisions or legislation that may affect the policies within the trusts or the tax treatment of either the policies or the provisions of the trust or the rules applying to gifts for inheritance tax planning purposes.
What if I have a joint life cover?
You can use this form to put a joint life cover in trust, the details of both people whose lives are insured by the cover need to be included in the Declaration of Trust section of this form. Note: please be aware that the life policy proceeds will be paid to the trustees in the event of a valid claim. If this is not your wish, then putting your plan into trust may not be right for you and you will need to speak to your legal adviser to discuss the appropriate action that meets your needs.
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Section A: Definitions
The words in this form which begin with a capital letter have particular meanings which are set out in the table below.
Word Definition
Additional Trustee The person appointed by the Settlor to be a Trustee of the Trust as listed in Section C
- The Declaration of Trust or such other person or persons who may be appointed as a Trustee of the Trust
Beneficiary A person who will receive a benefit from this Trust and is listed as such in Section C - The Declaration of Trust
Incapacitated A person who in the opinion of two medical doctors lacks mental capacity.
Minor A person considered to be under the age of consent - currently age 18 in England, Wales and Northern Ireland, and age 16 in Scotland
Policy The life assurance contract (or 'cover') that the Settlor is putting into this Trust and which is identified in Section C - The Declaration of Trust
Settlor The person who sets up the Trust and is identified as the 'Settlor' in Section C - The Declaration of Trust
Trust The Trust that is set up pursuant to this Bare Trust Declaration incorporating this Section A - Definitions, Section B - The Trust Provisions, Section C - The Declaration of Trust and any amendments to these provisions
Trustees The Settlor and the Additional Trustee or Additional Trustees or the Trustees for the time being
Trust Fund The Policy, all the title, benefits, rights and interest of the Policy, all monies received or payable under the Policy and all property and monies added thereto by way of further settlement, accumulation of income or otherwise
Trust Period The lifetime of the Trust which shall be up to 125 years
Trust Provisions The provisions set out in Section B
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6 Number of Trustees and power to appoint new Trustees
(a) There must be at least two Trustees appointed at any given time one of which must be a person who is not the Settlor. (b) The Settlor shall be vested with the power to appoint new Trustees (such appointment must be made by deed) during his life or so long as the Settlor is able to execute this power (in that the Settlor is not Incapacitated). (c) The Settlor hereby appoints the Additional Trustee or Additional Trustees to act with the Settlor and in line with the powers conferred upon them in this Trust. The Additional Trustees shall acknowledge their position and responsibilities bestowed on them by this Trust or any subsequent revisions of the Trust. (d) After the death of the Settlor the Additional Trustees shall have all of the powers of the Settlor whilst living and with capacity.
7 Power to remove Trustees and retirement of Trustees
(a) Provided he is not Incapacitated, the Settlor shall for so long as he is able to execute this power, have the power to remove any Trustee without giving reasons for doing so and without the need for other Trustees to agree or otherwise, provided there are at least two Trustees remaining after the removal has been completed. (b) A Trustee can be removed by the other Trustees where the Trustee who is being discharged of their duty is Incapacitated or cannot be found provided that in the case of the latter:
- none of the other Trustees have been in contact with the Trustee being discharged within the preceding twelve month period;
- the other Trustees (one or more) have made reasonable efforts to make contact with the Trustee to be discharged; and
- the discharge is made by deed executed by all of the continuing Trustees being at least two in number including at least one who is not the Settlor and a declaration is made in such deed that all reasonable efforts were made to contact the Trustee who cannot be found and that the continuing Trustees have written to the missing Trustee's last known address without success and that they have attempted to contact the missing Trustee through all other addresses given to them during their investigation. (c) A Trustee may retire provided that following the Trustee's retirement, there are at least two continuing Trustees. A Trustee's retirement shall take effect from the date of the notice of retirement sent in writing to the continuing Trustees.
8 Power to invest
Where monies are held by the Trustees for a period of time until distribution of the proceeds is possible, the Trustees shall have the power to invest such monies in an investment that will not be classified as a wasting asset and shall be easily accessible to enable prompt distribution when appropriate. The Trustees shall be entitled to move such monies as appropriate in order to make the investment.
9 Trust Income
Any income accrued in relation to the Trust shall be paid or added to the Trust proceeds for the benefit of the Beneficiary.
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10 Distribution of assets
(a) The benefits from the Trust Fund shall be paid to a Beneficiary in accordance with the provision of distribution as set out in Section C - The Declaration of Trust (b) Where the Beneficiary is a Minor, the benefits may be paid to the parent, legal guardian or person with the legal capacity acting on behalf of the Minor who shall take receipt of the monies to be held for the benefit of the intended Beneficiary who is a Minor and may provide a receipt in full discharge of the Trustees' duty. (c) The benefits from the Trust Fund may be paid to a treasurer or other person acting in an official capacity approved by the charity which has been identified as the recipient of such benefits. (d) The Trustees shall make a full discharge of monies payable to such person(s) under any policy forming part of the Trust. The Trustees shall pay the benefits after deducting any reasonable charges outlined in clause 11 of these Trust Provisions.
11 Power to charge
(a) A Trustee but not the Settlor engaged in a profession or business shall be entitled to charge and be paid all professional and other charges connected with their duty to act as Trustee and distribute the benefits. This charge shall be no greater than the Trustee's normal professional charges and may include expenses incurred through administration, professional opinion or peripheral expenses. Where a Trustee is not in a profession or business they shall be entitled to charge reasonable costs incurred in carrying out their Trustee duties. (b) A Trustee but not the Settlor shall be entitled to receive commission payments for professional and other services connected with their duty to act as Trustee and distribute the benefits. This charge shall be no greater than the Trustee's normal professional charges and may include expenses incurred through administration, professional opinion or peripheral expenses. Where a Trustee is not in a profession or business they shall be entitled to receive reasonable commission payments in carrying out their Trustee duties. (c) A corporate body acting as Trustee shall be entitled to charge fees in accordance with their normal professional charges for Trustee work. Such terms may be reviewed and agreed with the Settlor from time to time.
12 Power of appropriation
The Trustees may appropriate any part of the Trust Fund in or towards satisfaction of the interest of a Beneficiary and may for such purposes place such value on any property as they think fit.
13 Power to vary administrative provisions
The Trustees may amend or add to the administrative provisions of this Trust provided such amendment or addition is by deed.
14 Power to delegate
The Trustees may, by acting jointly, delegate any power conferred on them by this Trust to any person who provides professional services in relation to the delegated power and such person shall exercise the delegated power on such terms as they think fit. The restrictions on delegation in sections 12 to 15 of the Trustee Act 2000 shall not apply.
15 Liability for breach of trust
The liability of a Trustee for breaches of the Trust shall be limited to breaches arising from the Trustee's own fraud, wilful misconduct or gross negligence except in the case of a Trustee acting in a professional capacity. The Trustees shall not be liable for the default of a person acting under a delegated power pursuant to clause 14 of these Trust Provisions provided they took reasonable care in the selection and supervision of such person.
16 Trust Period
The lifetime of the Trust shall be up to 125 years.
17 Law
This Trust shall be governed by and construed in accordance with the laws of England and Wales.
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3rd Additional Trustee Full name of Trustee
Full address of Trustee
Postcode
4th Additional Trustee Full name of Trustee
Full address of Trustee
Postcode
Beneficiaries
The Trustees shall distribute the Trust Fund to the following:
Full name of Beneficiary
Full address of Beneficiary Postcode
Share (%)
Full name of Beneficiary
Full address of Beneficiary Postcode
Share (%)
Terminal Illness Benefit to be:
Retained by the Settlor Gifted to the Trust Mark as appropriate
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Execution of Trust
THE SETTLOR SHOULD ENSURE HE/SHE HAS CAREFULLY READ THIS BARE TRUST DECLARATION
FORM AND HAS TAKEN LEGAL ADVICE ON THE SUITABILITY AND TERMS OF THIS TRUST
Please note
Independent Witness - please ensure that all signatures are witnessed by someone who is not the Settlor, Trustee or a Beneficiary of the Trust. The witness must be present when each person signs the document. The same person can act as witness for all signatures, or a different person can witness the signatures.
Signed as a deed by the Settlor(s):-
1st Settlor Signature of the Settlor
Independent Witness Signature of Witness Full name of Witness
Address
Postcode Date
2nd Settlor Signature of the Settlor
Independent Witness Signature of Witness Full name of Witness
Address
Postcode Date
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4th Additional Trustee Signature of the 4th Additional Trustee
I, the above named Trustee, acknowledge and accept the appointment as Trustee
Independent Witness Signature of Witness Full name of Witness
Address
Postcode Date
Appointment of a company as a Trustee
To be used where a Trustee is a company
Signed as a deed for and on behalf of:-
Name of Trustee company
Signature of Director
Signature of Director / Secretary
Date
The above named Trustee acknowledges and accepts the appointment as Trustee.
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