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Articles by Matthew Gilligan

CAN YOU PUT YOUR INSURANCE POLICIES IN YOUR TRUST?

AUTHOR: Matthew Gilligan

POSTED: 12 November 2013

A common issue that arises is dealing with insurance companies over the names on insurance policies. Technically, insurance should held in the name of the owners of a property.

In the case of a trust, the legal owner on the title of a property is the trustee/s (while the beneficial owner is the beneficiaries). Clients tend to say “ the owner is the trust”, for example the “Smith Family Trust”. Assuming the trustees are Mary & John Smith and an independent trustee called XYZ Trustee Limited, the better description is “Mary Smith, John Smith and XYZ Trustees Limited as Trustees of the Smith Family Trust”. That's a bit wordy, so alternatively the shorter version of “Mary Smith, John Smith and XYZ Trustees Limited” will legally suffice.

A minute referring to the existence of the insurance policy or life policy in such circumstances, prepared and signed by the trustees, is prudent.

Watch for this issue to arise when dealing with life insurance companies particularly, as they will incorrectly say that trusts cannot own life insurance policies (and tell you to put the policies in the individuals' names). Literally they are correct - a trust cannot own a policy as it is not a separate legal entity.

However, the trustees can jointly own a life insurance policy and we have many thousands of our clients' life insurance policies held in trustees' names in this fashion. This can be better as it shelters the life policy from creditors' claims in the event an insolvent estate is attacked by creditors.

In summary, if insuring trust assets or writing life policies in a trust's name, write the insurance in the name of the trustees and you should have no issue.

If you would like further help with this please contact us on +64 9 522 7955, [email protected] or via our website.

Request a Meeting

Matthew Gilligan
Director

09 522-7955

[email protected]

© Gilligan Rowe & Associates LP

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Disclaimer: This article is intended to provide only a summary of the issues associated with the topics covered. It does not purport to be comprehensive nor to provide specific advice. No person should act in reliance on any statement contained within this article without first obtaining specific professional advice. If you require any further information or advice on any matter covered within this article, please contact the author.

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Hi Salesh, I just wanted to send you an email on behalf of GRA to say how fantastic we have found your company to date. As you know, Ben and I joined GRA a couple of months ago and have just found you so amazingly helpful in getting our new property set up correctly and sorted out. We have what I would consider a rather complicated structure as a result and it’s a fantastic feeling to know that we are getting everything done in the best way possible. We have just had approval to put a minor dwelling on the property which will make a massive difference in terms of cash flow and obviously value, something we would never have even thought of without GRA and which we are very excited about. During the buying process we attended a seminar with Matthew and from the outset thought he was fab. We therein signed up for property school and found this nothing short of fantastic. The content was relevant, up to date and comprehensive, but more importantly it was taught in a way that we could actually understand and really get value out of. I wanted to mention also, that everybody GRA have recommended to us has been just so efficient and absolute masters at what they do. A wonderful network of people that we feel very lucky to now be able to call on. From Kris Pederson and Bryan Rist who put our mortgage together to the insurance guys they then referred us to, I’m super impressed. Within GRA, Ellery has probably turned things around for us faster than I’ve ever known before, something which we appreciated so very much when it came to crunch time. She’s always a pleasure to deal with and again, we’re stoked. We’ve just settled on the property today and are about to go and get the keys. I’m pretty pumped and hence this email is probably rather excitable. So, a massive thank you to you Salesh, the partners for such a fabulous 6 weeks at property school and everyone at GRA for their help. May this be the start of our property empire. Thanks again, - A & B - July 2015

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