A survivorship clause allows a surviving settlor to get the proceeds of a trust if they survive 30 days from the death of the first settlor’s death. If both settlors die within 30 days of one another, then the trust property reverts to the beneficiaries.
For example, if your client is married with children, and took out a jointly owned policy they could ensure the proceeds of their protection policy would go to:
- The children if both your client and their spouse die within 30 days of one another.
- The surviving spouse if one of them survives the other by 30 days.
This means the trust can be flexible enough to provide the money where it’s needed – supporting the family at a difficult time, or providing for children without being part of their estate for inheritance tax purposes.
To include the survivorship clause, your client will need to opt in when filling in the trust deed. This is explained in the guidance notes for the trust deed.
It's important to understand that the survivorship clause can only be included when your client first places their policy in trust. It cannot be added or removed at a later date.
The survivorship clauses is only available on our Fixed, Flexible and Split Trusts. It is not available on trusts used for Business Protection policies.