Hi jeans

Sorry to read about your sister. I can imagine things are difficult enough to deal with, without the issues with the policy.

There's maybe 2 parts to this, firstly policies will normally have a beneficiary on death and the entitlement to the funds would go to the beneficiary. Was the policy taken out at the same time as the trust deed with the trustee as beneficiary.

Secondly, subject to the fees and outlays being met, the trustee must pay the funeral costs and reasonable outlays incurred before any dividend is paid to creditors.

I think you should enquire further into the beneficiary position with the policy as this will at least clarify who is entitled to the funds. Then look at the expenses part if the trustee is indeed entitled to these.

Mark

Mark,

Many thanks for your quick reply, to say the least the Trustee has been shameful in their handling of the matters, which angers me as my sister cooperated fully with their wishes and accepted an increased TD payment rather than go bankrupt.
The policy was an existing life insurance paid into for several years prior to the signing of the TD. She was made aware by the Trustee once she was diagnosed with cancer that should she pass away before her discharge the monies would be vested within the TD, though after discharge the monies would revert to her estate.
As previously she was discharged in March though the TD was still in office to claim for PPI which she did not have.
Due to the vested interest the insurance company would not deal with us and in communication with the TD the goalposts seem to change daily.
Any help or assistance would be greatly appreciated.

Hi jeans

I think you should demand sight of the policy document and confirmation of the beneficiary as 'vested interest' does not bestow any legal rights as such.

Irrespective of the trustees position, either he or the insurance company should be able to provide this. That would be my starting point as you need to be clear who the legal beneficiary is.

Mark

Mark,

Thanks again.

I have assumed they are beneficiary, though for this to have occurred on an existing policy would further paper work be required to have been signed with my sister on entering the TD?

Appreciate your advice and time.

Jean

Hi jeans

In normal circumstances, she would probably have had to assign rights to the trustee, although it's difficult to say without site of the original document. You should certainly demand sight of all paperwork.

Mark

Mark,

Again thanks, 1 last question if you don't mind. if they are beneficiary on the policy, the fact she was discharged in March, do they still legally have an entitlement on the policy. were the assets not realized on her death, after the discharge date?

Again appreciative.

Jean

Hi jeans

No, the key date would be the discharge of the trustee. In the circumstances described, the trustee has an interest in the policy and that interest would continue until the trustee was discharged.

Mark

Thanks for all your help. Just to confirm they were at the end of the TD and had confirmed costs etc in their recent annual accounts. The policy matured at 26k so legally they are eligible for the funeral costs. They have advised they are asking the creditors for approval but your recent thread would seem this course of action is not required.
Obviously not great news but I understand any monies available will go to creditors but to hold the funeral monies to some sort of ransom seems wrong.

Thanks again.

Hi jeans

This is not something that requires creditors consent. It is the legal order of distribution and funeral costs come after trustees fees, but before creditors claims.

If they have managed to get something as basic as this wrong, then I would certainly question their entitlement to the funds.

Mark

Mark,

I will take all your advise forward and seek clarification that the assignation of the policy has been carried out correctly within the TD. And challenge their management with the funeral costs.

I will let you know how I get on.

For now all help greatly appreciated.

Jean

Hi jeans

Sorry I meant to as if the policy was life assurance or life insurance. Regardless you should still seek full details of the policy.

Mark

Mark,

I spoke with the life cover company, the cover was life assurance, they have a copy of the signed Trust Deed on record I assume this is sufficent to claim rights.

Regards the funeral costs they stated in a letter they would write to all creditors for the consent of reasonable expenses to be paid and should they be in agrrement arrange the re-imbursment of these costs.

On hindsight my sisters initial debts will nearly all be recoverd with TD payments and the policy payout.

Should I contact AIB for advise.

Thanks in advance.

Jean

Hi jeans

I think you still need clarification on the policy document to see if this was held in trust or if there were any other beneficiaries within the terms of the policy.

On the position with funeral expenses, this does not require creditors consent. I have undernoted the appropriate section dealing with distribution stating the word SHALL:

Mark

Order of priority in distribution
51.
ÔÇö (1) The funds of the debtor's estate shall be distributed by the
trustee to meet the following debts in the order in which they are mentionedÔÇö
(a) the outlays and remuneration of the interim trustee in the administration of the debtor's estate;
(b) the outlays and remuneration of the trustee in the administration of the debtor's estate;
(c) where the debtor is a deceased debtor, deathbed and funeral expenses reasonably incurred;

The Accountant in Bankruptcy's Noted for Guidance for Trustees actually clarify this. I'm afraid that a "deceased debtor" for the purposes of the legislation quoted above is a person who was deceased at the time of award of a sequestration, not a person who died subsequently.

In cases where a person has died during the term of a sequestration or Trust Deed then the trustee has no obligation to release of any funds for funeral expenses. The Accountant in Bankruptcy does state that Trustees should consider paying reasonable funeral expenses if funds allow, however. It is really up to the discretion of the trustee though.

Sorry, not what you wanted to hear. Mark's point about finding out who is named on the policy as the beneficiary is an important one though and definitely worth double checking.