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jmorr
New Member

4 Posts

Posted - 06 June 2019 :  13:13:45  Show Profile  Reply with Quote
Myself and my wife entered into a trust deed a year ago. My wife has very recently been diagnosed with Cancer. As such we are expecting a life insurance payout enough to settle both our trust deeds.

We have received an email saying to expect the money transferred to my wife within the next week or so.

We have yet to inform out trust deed however have enquired about a settlement figure from them. As such they questioned who this critical insurance policy was through which I failed to disclose which they appeared disgruntled about however I feel they will probably find out.

After reading through some posts my fear is they will attempt to intercept this money coming directly to us. We are planning on settling the trust deed for both of us as soon as it is received however we do not want them to get the money paid to them and then provide us with the 'remainder' as I have seen on here that can take in excess of 6 months.

My question is can they do this?

Are they likely to investigate with insurers as to whether we have a policy now they know of my wife's condition?

Or is it likely now at this stage we will receive the payment now and then be able to settle with them ourselves?

John

TDA (Debt Adviser)
Trust Deed Expert



13031 Posts

Posted - 06 June 2019 :  13:30:34  Show Profile  Reply with Quote
Welcome to the forum jmorr.

I'm very sorry to hear about your wife's diagnosis.

Your trustee might require you to hand over the funds so that they can ensure enough remains available to clear everything.

It's also possible that the insurer will undertake an insolvency check and forward the funds directly to your trustee.

If the sum of money involved easily covers the debts/interest/costs/fees then the trustee may return some of the surplus to you at an early stage.

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jmorr
New Member

4 Posts

Posted - 06 June 2019 :  13:39:07  Show Profile  Reply with Quote
Our insurance company hasn't mentioned anything about an insolvency check and has also stated they can only pay into the account of a 'trustee' for which myself and my wife are both listed as the 'trustee's'.

There has been no mention on our policy or to us by our insurance company about the trust deed.

If there is a sufficient amount which there will be more than enough and it comes to us, can we just request a settlement figure from the company who we make our trust deed payments to and then transfer them the amount?

John

Edited by - jmorr on 06 June 2019 13:40:41
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TDA (Debt Adviser)
Trust Deed Expert



13031 Posts

Posted - 06 June 2019 :  13:44:59  Show Profile  Reply with Quote
You'll need to contact your trustee and obtain their advice on this if the money comes directly to you. It will be their decision what then happens.

Insolvency checks tend to be a final stage when financial institutions are making large payments to people. We've seen this quite a bit with PPI where people have been told large sums will be going their way, then at the final stage it is sent to the trustee instead.

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jmorr
New Member

4 Posts

Posted - 06 June 2019 :  13:50:01  Show Profile  Reply with Quote
Thankyou so much for your reply.

John
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David Tannock
Trust Deed Expert



2197 Posts

Posted - 06 June 2019 :  14:28:42  Show Profile  Reply with Quote
Hi jmorr,

Sorry to hear about your wifeís diagnosis.

A Trustee will be nervous about allowing a client to retain such as large sum of money in case it is spent or disappears before being paid to the Trust Deed. Iím not suggesting this will happen in your case but it has happened in the past in cases.

Normal procedure would be for the Trustee to receive the funds directly from the insurer and for a settlement figure to be calculated to clear off the clientís Trust Deed and then any surplus funds would be returned to the client.

I know that the insurer hasnít advised they will carry out an insolvency check but itís more than likely that they will. As TDA has advised normally this is done at the final stages.

The best course of action would be to contact the Trustee and advise them of the situation and they can work with you to find a solution that works for all parties involved.

From a Trustees perspective it would make me nervous if a client hadnít disclosed a life insurance policy and then failed to disclose a change in circumstances and a possible 5 or 6 figure insurance pay out.

Iím positive there will be a solution that works for everyone and I wish your wife the best of luck with treatment.

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jmorr
New Member

4 Posts

Posted - 06 June 2019 :  15:29:30  Show Profile  Reply with Quote
I totally understand how this can make those handling our Trust Deed nervous. I think for myself we have struggled along for so long that this would be a silver lining at the end of a long dark tunnel for us and our family. It makes me nervous that they would have possession of a much larger sum of money than what we will ever owe them.

My concern is on reading other posts is the delays and times it takes for these companies to release any Ďexcessí funds which can take months and months. This is a horrible and worrying thought.

I suppose my the next questions I have are:

Has anyone on the forum been in this situation at all?

If so which insurer were they with?

Also, if this has happened how long did it take to release the funds?

Also, did they have to continue making monthly payments even though the trustee was holding the lump sum?

Anyone who may be reading this and have experienced this I would like to hear your thoughts and experiences.

John
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TDA (Debt Adviser)
Trust Deed Expert



13031 Posts

Posted - 06 June 2019 :  15:56:13  Show Profile  Reply with Quote
Hi jmorr.

Hopefully someone with personal experience will step forwards and share their experience with you.

If the sum of money is very clearly much more than will be needed you could make a good argument for at least some of it to be returned to you. This argument would be stronger if you could identify reasons why it is needed. In these circumstances I doubt you'd be asked to continue making monthly payments.

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Kevin Mapstone
Trust Deed Expert



3767 Posts

Posted - 07 June 2019 :  14:38:03  Show Profile  Reply with Quote
Certainly we have had similar situations in the past where we have authorised the release of a significant sum straightaway and then released any remaining funds once all loose ends have been tied up.

If the Trustee is holding more funds than will be required for full settlement then there is no reason they should insist on monthly income contributions continuing while they sort out closing the Trust Deed down.

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