Group Life Master Trusts

Hello and welcome to today's webinar, Group Life Trusts, Everything You Need to Know. I'm Simon Moore, one of the group risk account managers here at Aviva, and I'm going to be your host for today. Now, before we get started and welcome our experts, let's take care of a little bit of housekeeping. Chrome is the recommended browser for this event. If you do have any technical issues, please use us a note in the Q&A and we'll try to support you as best we can. You are all on mute today, so you can enjoy the event without any additional noise. Again, if you have any questions, drop them into the Q&A. So as you're already aware from the title of this webinar, we're going to be talking all about group life trusts. Now, this is a topic that doesn't typically get the juices flowing. However, we know how important it is for anyone who's working in group life and we do see a fair amount of questions coming in on this particular subject. So today we're going to demonstrate that it's not as complicated as it may first appear, and we can help you be confident in front of your clients. Now, before we get into the detail, there are two main options that employers have. The option of affecting their own trust, for which we have templates that can be used, or using an insurer master trust. Now, in this webinar, we are going to focus predominantly on master trusts, as they are the most popular option at Aviva and are supported by our partner trustees. etc. We're going to show you how they can be made easy for you and your clients and not to have to worry about it being complex or technical. So here are the learning objectives that we're going to cover today. What group life trust options are available and how do they work? Understand the role of master trust and trustees at claim settlement stage and discover the difference between registered and accepted master trusts. Now, of course, I can't do this all by myself, so I'm going to introduce to you our expert panelists. So first up, we have Aviva's very own group protection product manager, Mark Jarrod. Welcome, Mark. Mark has worked in group protection for over 20 years, and he's the main man behind the design of our group protection products. So he has more than a bit of knowledge about what goes on with group life. And joining us to give us an insight from a trustee point of view is Alistair Meeks. Welcome, Alistair. Alistair's with Zedra and he's one of the client directors. They are the trustees of our Aviva Group Life arrangement. He helps to run a team that handles more than 1000 death benefit cases every year. So again, has tons of experience and he'll be sharing with us his insight into the trustee role and hopefully some interesting case studies as well. So like I said, these guys really are the experts when it comes to group life trusts. And you'll also have the opportunity to put questions to them during this session. There is the web chat if you want to raise any questions, please drop them into there and we will pick them up and answer those later on. So firstly, to kick things off, let's start looking at an overview of the different trust structures available. group protection at Aviva. We have master trust arrangements for registered and accepted group life policies. If I can come to you first, can you please give our audience a run through of the key differences between these two options of registered and accepted, a question that we often get asked? 

Okay, now thanks Simon. Hello everyone. So yeah, first of all, I think it's really important to understand, you know, what registered and accepted policies are. So those key differences become more apparent. So let's start registered. So it gets its name by virtue of the scheme having to be registered with HMRC. Now we need this to happen before we as an insurer can go on risk. Now it's registered by the scheme administrator. Now that's very often the appointed trustees of the scheme, which is usually the employer, differently for master trust. And in most cases, this registration process will only take about one to three weeks. but occasionally it can take longer, although to be fair, that's usually pension schemes. Now, under legislation, the registering of the group life scheme means it is effectively treated as an occupational pension scheme, because historically group life benefits formed part of an occupational pension scheme. Now, all registered group life schemes are written under a discretionary trust. Now, this can be set up by the employer as a standalone trust. That's where the employer appoints the trustees to that trust. Or they can elect to use a master trust. Now, Aviva has its own registered master trust that the employer can choose if they wish. It's also the case that some pension scheme trust and rules can be used to govern registered group life schemes. Now, these are usually defined benefit or defined contribution schemes, so not your group personal pensions, they don't count. But benefits under registered group life scheme, they take the form of a lump sum. So for example, multiple salary, three times, four times, et cetera, or a fixed benefit such as say 100,000 pounds, just by way of example. Now an alternative to a lump sum would be a death in service pension. This is where we would pay out an annuity to the spouse or civil partner, sometimes to a dependent child as well. rather than a lump sum in the event of a member's death. Now, the amount of cover is often a percentage of the member's salary, and this will often continue until the spouse or civil partner dies. Now, under a registered policy, different categories of membership are available. So, for example, you could have board members, directors and general staff. Now, they can be covered for different benefit bases. So for example, you may wish to cover the board members and directors for six times salary and general staff for full time salary. They can be covered all under the same registered policy. Now lastly, it should be borne in mind that lump sum benefits count towards something called the lump sum and death benefit allowance, which you may have heard of, previously called the lifetime allowance. That currently stands at 1,073,100 pounds. So just quickly moving on to accepted policies. Now, unlike the registered version, it is accepted from having to register with HMRC, which is a good thing. But under legislation, these policies are treated as relevant life policies, which is an important distinction, as we'll come on to later, rather than occupational pension schemes. Now, where it is similar to registered is that all policies are written under a discretionary trust. Now, these can be set up by the employer as a standalone trust, or they can elect to use a master trust. And just like registered, Aviva has its own master trust that the employer can use if they wish to do so. Now, accepted policies being a relevant life policy under a discretionary trust can mean there is the potential for it to be subject to the 10-year periodic charge. Now, today time precludes me from going into too much detail. It's almost a topic in its own right, to be honest. But what I would say is that for there to be a charge, a fairly rare set of circumstances will need to apply. So I don't want to overly concern people with this one right now. benefits under an accepted policy have to be lump sum only. Members cannot be covered for death in service pensions. So that's one of the rules of being an accepted policy. Now, unlike registered schemes, there can be only one benefit basis per policy, i.e. you can only have four times salary, so that covers everyone under the policy. However, if an employer requires different benefit bases for different levels of membership, we would have to create new separate policies and produce new policy schedules for each of those different levels of benefit. So that often happens whereby, like I say, you have those different levels of membership, board directors, general staff, et cetera, et cetera. They would each be under different policies, whereas registered, they'd be under the same. So finally, and importantly, the benefits for accepted policies do not count towards the lump sum and death benefit allowance, which, to be honest, is the main attraction of using these policies in the 1st place. Now, there are some people who think that this goes against the specific rule that tax avoidance cannot be the main purpose of the policy, but it's my view that this is not the case. So the main purpose of these policies is to provide life insurance cover, not tax avoidance. 

Perfect. Thanks very much, Mark. And we've put a summary table on the screen there just to highlight the key differences between these two types of arrangements. So looking, Mark, at the two types of policy arrangements you can have registered and accepted, what are the trust options that are available and how do they work? 

OK, thanks, Simon. So as I've mentioned previously, all of our group life policies use discretionary trusts. So what's the real benefit of using discretionary trusts at all? Well, as the trust is discretionary, it means that the benefits do not form part of the deceased member's estate. So why does this matter? I hear you ask. Well, by not being part of the estate, the benefits will usually be free from inheritance tax. Can be a big bill. Also, another important point is that the benefit will not be caught up in probate, so can be paid directly to the beneficiary by the trustee. Now, some of you may know that probate can potentially be a lengthy process. So it's a great benefit to the beneficiary that they receive the monies quickly, bearing in mind the loss of household income. So what trusts are there and how can may be set up. Registered and accepted policies means that the trustees operate their own discretion in determining to whom the benefits are paid in the event of a member's death. Now, expression of wishes formed can be completed by the members to help inform the trustees of who they would like the benefit to be paid to. However, whilst the trustees can use these in their consideration of whom to benefit, they are not legally binding. That's a very important point. So in practice, these forms can be useful for trustees, that there's no question, but the trustees have to make the decision as to whether they are the right people to benefit. Now, as you can imagine, these forms can go out of date very quickly. That's especially the case when people's circumstances change. You're going to hear a lot more about this from Alistair a little later on. So employers can choose to set up a standalone trust for registered or accepted policies. They can set up separate trusts for both, but you cannot combine a trust for both types of policy. So in so doing, they, as a principal employer, get to choose who they would like the trustees to be. Now, when they do this, very often in this scenario, the employers appoint themselves as trustees. Assuming, of course, that they are legal entities such as a limited company or a limited liability partnership, for example. And to assist this, we have template trust and rules documents that the employer can complete. And as an added bonus, we can also provide the necessary documentation for any future changes, such as a change to the principal employer, you know, where the ownership changes, or changes to the trustees. Though it has to be said, we will only do this if the employer maintains an Aviva group life policy. Now, alternatively, the employer can create their own trust and rules documents, nothing against them doing that, though in that occasion we would always recommend they seek assistance from their legal advisors. It's important to remember we, Aviva, will not provide the documentation to change the trust and rules that are not Aviva's own template. Now, Whichever trust and rules option the employer chooses, it is these trust and rules documents that govern how the scheme is run. So outlines, for example, the parameters of who the beneficiaries can be, who's responsible for paying the premiums, what the benefits can be, et cetera, et cetera. Now, finally, the alternative to choosing to set up their own standalone trust is to elect to use Aviva's master trust. As I've said before, we have master trust for both registered and accepted policies. And all it requires is a completion of a simple master trust application form. 

Excellent. Thanks very much, Mark. Good to have some background information on the various options available. And just thinking about that in more detail, what would you see are the main advantages of using a master trust arrangement over an own trust arrangement? 

Yeah, of course. No problem. So we think this provides both a useful and valuable service to our customers, the main benefits of which are it's very easy to set up and for registered policies, there is no need to complete the registration process with HMRC. The overall master trust scheme is already registered with HMRC, etc. did that. Now, as a result, For registered policies, it is much quicker to go on risk and complete the onboarding process because you don't have to wait for that PSTR number that comes with setting up your own registered policy. There's no need for the employer to appoint trustees as Aviva has appointed Cedric Governance Limited as trustees to both our registered and accepted master trusts. This removes the potential burden of the role of being a trustee from the employer. who may have little to no experience of what is actually required of them. Whereas ZDRA, on the other hand, they're experts and they are super experienced in the field of trusteeship. Usually there's no additional cost to the employers when they place a policy under the master trust. That's a big benefit. But it's important to remember that only Aviva policies can be placed under Aviva master trust. So it's Definitely not the case that employees who have policies with other insurers can come and place them under Aviva's master trust. That cannot happen. Now finally, the responsibility of keeping the trusts up to date with current legislation rests with Aviva and Zedra. So the company doesn't have to worry about ensuring those trusts and rules are up to date. 

Super. Thanks again, Mark. It sounds like it makes it a lot simpler for customers and removes many of the complex decisions by going down that particular rd. If an advisor wanted to go ahead with a master trust arrangement, can you give us a bit of a guide about implementing a master trust on a group life scheme with Aviva, maybe some tips on how to have conversations with clients and be confident in the level of information that's needed? 

Yeah, of course, no problem. I will do that now. So to implement a master trust policy, it's a very simple process to follow. So when you request that initial quote, you state that the employer wishes for the policy to be under Aviva's master trust, be it registered or accepted or both. Now, assuming the employer is happy with the quote and wants to go on risk, then this should be confirmed to our pricing team who received the quote to you. That team will then confirm that the policy is on risk. This can be a future date, provided it's within the expiry date of the quote. And they will request that a master trust application is completed and returned to Aviva. Policy will then be set up on our systems and a policy schedule issued. That's pretty much it in terms of the setup. But what points should you as brokers raise in conversation with your clients concerning the use of master trust? firstly, you're going to be hearing from Zedra very soon, and Alistair, more importantly, and the work that they undertake in fulfilling their duties as trustees. Now, everything you hear from them is what is expected of a trustee of a group life scheme. Naturally, it's going to be on a smaller scale for individual schemes, whereas Zedra dealing with lots of schemes. It's important for your clients to understand the responsibilities they are taking on if they were to appoint themselves as trustees of their own trust. There are also legal obligations and trust and trustee law that need to be fulfilled when taking on these duties. Now, these become especially apparent when dealing with an emotive situation such as an employee's death. Finally, very often, directors of small, medium-sized companies They may not feel that they have the suitable experience to take on these duties and that level of risk. Therefore, using the master trust will give them peace of mind that the trustee's duties regarding their policy are being executed professionally and any risk to them as a company is removed. I think that's it for me. 

Excellent. Thanks again, Mark. Thanks, Mark, for that comprehensive answer there. It seems again that this process seems fairly straightforward for advisors and customers by using guidance from Aviva. Just as a reminder, if you have any questions that you want to put to our panel today, drop them into the webinar chat and we will pick them up. We can't answer specific questions around cases that you might have. For those, please do direct them towards your Aviva Group Protection account manager or relationship contact and I'm sure they'll be happy to assist. So you touched on some really good points there, Mark, about legal obligations and trustee duties. So I think this is a really good time to bring in our next expert, Alistair. Welcome and thank you for your time. It's great to have first-hand input from a professional trustee who basically live and breathe this on a practical basis every single day. So thanks, Anista, for your time. If I can start you off with a quick summary of what exactly is involved in the role of a trustee and your disabilities. 

Thank you. Well, most people on this call will be generally familiar with the idea of a trust, but it is worth going back to first principles. A trustee, broadly speaking, is someone who takes on responsibility for someone else's assets and manages them conscientiously on their behalf. Well, there are many different sorts of trusts. They range from charities to big commercial trusts to pension schemes to small family trusts. And the way the responsibilities work will be different in each type, depending on the purpose of which the trust is set up and the specific terms of the trust documentation itself. Well, in the case of a group life trust, managing the assets is pretty simple. You've got an insurance policy. The insurance policy pays out a lump sum on the death of someone covered by the policy. So if there's an eligible claim, you've got the lump sum, but that's not to be held for the long term and should be paid to the beneficiaries as soon as possible. So the assets of this kind of trust aren't really that complex to manage. But the complexity comes from the other half of the role, the payment of the benefits. A group life trust pays under a discretionary power held by the trustees. And historically, as Mark was explaining, this was done for tax reasons and it also allows much greater flexibility and speed of payment in most circumstances. However, with that discretionary power comes great responsibility on trustees to identify the potential beneficiaries and then to make decisions as to who should receive the actual payment of the benefits. So it's worth breaking that down just a bit further. The first part of the process is a fact-finding process. The trustees need to understand the circumstances of the deceased, everyone who might have a relevant connection with him or her, such as might qualify them for consideration. But then the second part is different. The trustees have to assess how best to distribute funds in those circumstances, having regard to why the policy was set up in the 1st place. Often, that's very straightforward. But sometimes, and actually rather more often than might be assumed, it isn't. So all of this comes under the trustee's duties and obligations, under the terms of the trust. 

Perfect. Thanks, Alistair. Thanks for putting that overview of the trustee responsibilities into context. Now, thinking more about claims settlements, that's typically when you'll be involved with speaking with employers, possibly advisors. What happens when a group life claim is paid under a trust and what are your duties in relation to things like appropriate beneficiaries, employee expression of wish forms and the due diligence process? Often questions that we get asked. 

Yeah. Well, There are two separate stages to consider here. The first part is to, of the claim is under the insurance policy. Well, following the death of the employee, the employer submits a claim to Aviva under the insurance policy and we at Zedra have no part in this. Aviva and the employer will establish the coverage and the lump sum payable based on the terms of the policy. Once that's been established, Aviva pay the lump sum to us under the terms of the policy and we begin our investigations. The first part, as I mentioned, is fact-finding. We ask employers to fill out an information form. Some employers know a lot about their employees' lives and some don't. And that's fine. It all helps give us a start. We need to establish the full family circumstance for the deceased. Very high on our list is what the deceased would have wanted. So if the deceased has completed an expression of wishes form, especially one that's up to date, that is unbelievably helpful. and that sadly, not enough people do complete these or remember to update their wishes as their circumstances change. So anything employers can do to encourage people to do so helps us and them enormously. We don't automatically follow expression of wishes forms, and I'll explain why in a while, but we do give them an awful lot of weight. Now, some people's lives are complex. The day of the typical nuclear family with 2.4 children and dying as rosy-cheeked grandparents are well behind us, if they ever existed. Increasingly, we're seeing blended families, complex relationships with previous families, and a network of responsibilities for past partners and children by previous relationships. Now, we don't make moral judgments, but we do need to understand these circumstances. And, well, how do we find this out? Simple. We ask people. We start by asking next of kin, people named as executors in wills, relatives, close friends. We look at expression of wishes forms. We look at online obituaries. The death certificate usually gives a good clue because it will have been completed by someone close to the deceased. Well, what do we do when we have all of this information? We try to work out what's best in the circumstances. We don't have hard and fast policies. Trustees can't in any case fetter their discretionary powers in that way. But my normal starting point is to try and do what the deceased would have wanted us to do had they had full regard themselves to their responsibilities. Let's give an example. Let's say someone is on a second marriage. and has an expression of wish form that nominates everything to go to their new partner while they've been paying out child support for minor children under a previous marriage. I don't mind honouring their wishes, but normally only after proper provision has been made for the children if the funds allow. Now, sometimes when completing an expression of wish, employees haven't always thought things through fully. As trustees, we will intervene and I can give you a specific example of that. A woman died She was the main breadwinner in the house and she left behind a husband and child. She'd filled out an expression of wishes form, leaving half to her husband and half to her mother, who was in her late 70s living in rural Poland. It was quite a chunky lump sum. It was close to 400,000 pounds. Now, half of this would have been an absolutely enormous sum in rural Poland. However, half was not enough to cover the mortgage on the house that her husband was living in. and he and her, their child, were facing having to move house at a time when they were already unexpectedly bereaved, since he was unable to pay the mortgage instalments on his own earnings. Well, what did we do? Well, we interpreted the expression of wishes form practically. We adjusted it so that we paid the husband enough to pay off the mortgage, and then we divided the remainder 50-50 between the husband and the mother. That way, we kept a roof over the husband and the child's head, whilst honouring the spirit of what the deceased had wanted. So, thanks, Alistair. 

I think that, yeah, so I think that really brings to life in that example that the trustee's role is complicated. It's not always straightforward. And also what's on the expression of wish form is not always the final outcome. And some people believe that actually the expression of wish form is how it always ends up being paid. So the trustee's role is an important one in using their discretionary powers to come to the right outcome on that. Do you have some other examples of some interesting case studies that you could share with us that were perhaps a bit more challenging? 

Well, there's... You often feel that there are repeating patterns, and you sometimes feel you've seen it all before, but there's always a curveball, and here are a few which perhaps illustrate that. We have a case on the stock at the moment where a chap died, leaving a girlfriend and a child in the UK, and a wife and a whole separate family overseas. So far as we can see, the family overseas had no knowledge whatsoever of the existence of the UK family. Adding to complexity in that case, there were two recent expression of wishes form, both filled out in the 12 months before the date of death. The second form was filled out apparently, and I use the word carefully, three days before the date of death. And since the deceased had died in a road traffic accident, this wasn't a case of financial planning. Interestingly, the signature was entirely different from that on the earlier form. Still more interestingly, the beneficiary under the new form, but not under the previous form, was the girlfriend. So we have to establish the various relationships. Then we have to establish which expression of wishes form accurately reflects the deceased wishes. And then we have to decide the extent to which the deceased wishes should be followed. And as you can imagine, that's not going to be a particularly simple journey. So please wish us luck with that one. As an example of something completely different, perhaps an example of how someone will always find a new angle, and on this occasion, definitely an angle not to be pursued. Not very long ago, we had a claim form from a small partnership where one of the partners had died. Now, unknown to us, each of the partners had contracted as part of their partnership agreement to nominate the partnership as the recipient of the lump sum. So they effectively using it as key man insurance. However, in this particular case, the deceased partner had failed to do so. And because he'd failed to do so, we had no power under the terms of the trust, none at all, to pay the lump sum to the partnership. This potentially meant a windfall for his family that had never been intended. But the whole thing was going to have to be unravelled through fairly complicated legal aspects between the partnership and the family. So I'm not recommended at all. 

No, I think that's a good point you made there, Alistair, around group life should not be used for key personal or partnership protection. Obviously, we're not giving any legal advice or guidance here, but that's the general rule. And an expression of wish form, as you said, is not binding. And certainly for accepted schemes, as we've seen, there's an absolute prohibition on paying to employers. So, you know, the role of the trustees is to do this within the rules that are available as well. We've got a little more time left available to talk about some examples. Do you have one more that you could perhaps share with us? 

Yeah, sure. I'm, you know, perhaps a good case as to why we don't just follow expression of wishes forms. had a lady in her 60s. She died after a long illness and so she was aware of what was coming and she got her affairs in order beforehand. And she left an expression of wishes form, leaving the death benefit to be split equally between her five nephews and nieces. However, when we spoke to her employer and all of her nieces and nephews and her mother, we found out that everyone knew that what she really wanted was for the money to be used to support her horse. And indeed, everyone told us that this was a wish passionately held. Now, obviously, we can't pay money to an animal. But after checking that no one had a more compelling claim, we did find a way to make sure that Paddy the horse's stabling would be paid for. 

Okay, another great example about how you can come across some really weird and wonderful situations when dealing with claims and settlements. So thanks again, Alistair, for sharing those case studies with us. And I think it demonstrates why we really felt this webinar was needed. It's not straightforward for trustees, certainly, as it may first appear when it comes to making these decisions on who actually receives the final settlement. from our experts now. So let's get to your questions. I'm sure we've seen some coming in. Apologies in advance if we don't get through them all. This is live, so we don't have any idea of what questions are going to come in. But Alistair, I've got a first question for you. If you don't mind, in your experience, what sort of timeline is typical from the payment by Aviva to Zedra to the final settlement to the beneficiaries? 

Well, Our average length of time from end to end is around the 60-day mark. That average is skewed by the more difficult cases. Straightforward cases can be and are processed significantly more quickly. We have up to two years to make payment, and I've seen three actually get to the very last day possible of that two-year payment. period. Now, in all three cases, we had been waiting on information from relatives. Now, obviously, long-running cases will push up the average really quite considerably, automatically. 

Yeah, no, understood. And in your experience, what are the main causes of delays? And is there anything that employers can do to help speed up the process when they're dealing with a death claim from one of their employees? 

In terms of what are the main causes of delays, the main cause of delay is getting information out of family members. This happens at both the investigation stage and at the payment stage. Sometimes it's because individuals just don't want to engage, but more often it's because they're suffering just too much grief to be able to discuss these things. Now, we have our SLAs. And Mark and Aviva certainly discuss our SLAs with us with great interest, but we are not going to force the issue with bereaved family members just to make our SLAs look better. We are very much aware of ours and Aviva's duties to vulnerable clients. And when you're dealing with bereavement, pretty well everyone we talk to in this process is by definition vulnerable. We are very aware that we are dealing with people for whom in many and perhaps most cases, this is one of the worst moments of their entire lives. So we are not going to make it worse still. Now, different people take bereavement very differently and circumstances can differ hugely. I mentioned a case just now where someone had been preparing in advance and in case at the end of a long and difficult illness, it can seem like a release and the family can very much be prepared with affairs fully in order. But sadly, we see all too many suicides and those require a special sensitivity. So circumstances can vary enormously. Now, the speed of such cases will differ hugely. Now, curiously, one time we often see delays is at the payment stage. One of the cases I mentioned that took the full 2 years was one where the son of the deceased just didn't feel able to give us his bank account details for receiving the payment to be awarded to him. Now, there is something, it appears, about the finality of that moment of payment that seems to catch some people very raw. There are other things that can cause delays. Where a case has overseas elements, and those are becoming increasingly common as we become a more interconnected world, that will usually slow things down, particularly if there's a language barrier. Where there are disputed facts, we need to be sure of our grounds, so we need to check things out further. Where different potential beneficiaries are feuding, we often need to give them multiple opportunities to comment. And being candid, sometimes taking a little bit of time at those cases can get everyone thinking a little bit more about not just what they want, but what might actually be assessed to be a fair outcome by someone able to take a more dispassionate view. But having set out all the things which are delayed, we do generally operate a quick process. Now compare and contrast, as Mark was saying earlier on, the process for dealing with the rest of the deceased estate. By the time we've typically made payment, probate might not even have been granted. In the great majority of cases, we're able to get substantial sums of money into the hands of those who need it quickly and at the time they need it. 

Okay, of course, as you said, the aim is to get these funds into the hands of the beneficiaries as quickly as possible. We don't want to see anyone in a financial hardship situation. However, you know, the trustees have a duty to follow the correct process, of course, as part of that. So thanks for that response. We've got some more questions come in. So first one to you, Alistair. Again, of a similar vein, how do you deal with payments to children or where children have are doomed to be the appropriate beneficiary. 

There is no set rule on this. A lot will depend on the amount and a lot will depend, frankly, on the family circumstances, which can vary enormously. If the sum is very large indeed, we will settle that under, we want to see that settled under a trust for everyone's protection, frankly, in those circumstances. With smaller sums of money, where there are reliable, responsible adults, parents, typically, we may well pay children's shares to parents to look after for them if we think the parents are trustworthy. Circumstances will alter cases. You do have some terrible cases where parents and children are estranged and we will consider each case on its own facts. But we try and take a pragmatic approach. We don't want to bog people down with hugely complicated trusts for small sums of money, but equally we want to make sure that the money goes to the place where it's intended to go to. And again, sometimes expression of wishes forms can be very helpful. We had a case very recently where the deceased had nominated his mother and this looked baffling at first, but it was explained to us by numerous family members that the intention was that the mother would look after the money for his children because he did not regard his ex-partner as being financially responsible. Now we've looked at that carefully ourselves, but at least the expression of wishes for him gave us some understanding of what he thought the the circumstances were. So I don't have a hard and fast rule, I'm afraid, but hopefully that will give a sense of how we look at these things. 

Yes, excellent. Thanks very much. And you may not again be able to answer this question in full, but what generally happens when there are disputes? So if there's a disagreement with the trustee's decision on who is going to be the beneficiary of benefits. 

I think it depends at what stage. We try to start off initially to understand the different perspectives of different people. It is sadly the case that sometimes the deceased dies, leaving circumstances where people are not, are estranged in different ways. It is not our job to fix family feuds or anything like that, we go into an unfixed set of circumstances and we do what we think appropriate in those circumstances. We will, where there are very different views and sometimes feelings can be very passionately held, we will listen very carefully, but inevitably sometimes we will take decisions that are controversial and that will leave some people feeling that we've made the wrong decision. We do have an, We do have an internal dispute resolution procedure, which we follow and we follow rigorously. So that is always available to people to follow should they so wish. Beyond that, the remedies ultimately, if people really wanted to challenge it, would be through the courts, I'm afraid, but that has never happened, fortunately. I would say that the circumstances where it gets as far as a dispute resolution procedure are a couple of times a year. But inevitably, as I say, there will be some cases where some people are left unhappy. That is, I'm afraid, the nature of some family circumstances. 

Great, thank you very much. One for Mark. If a client has an accepted scheme and trust, how do you generally ensure that no client is going to have a charge? if the death occurs around when the trust is due to renew? I appreciate that's quite a complicated one, but just in general, how do we manage that situation? 

Are you talking about when it reaches the 10 years for the periodic exit charge? 

Yes, I believe that question's coming in terms of the 10 year rule, yes. 

Okay. Yeah, it's one of those complicated scenarios. Now, This will probably cover one or two of the other questions that you have as well. Now, when it comes to our accepted master trust, the original accepted master trust was set up in February 2016. And for those who can count, you'll know we've just passed our 10-year anniversary on our master trust. Now, what we did do was set up a new accepted master trust back in March 2023. And so new policies from about the summer of 2020 23 start to go into that new trust. And we then invited people who are in the existing accepted master trust. We gave them the option of switching over to the new trust, i.e. cancelling the policy under the old trust, setting up a new policy under the new trust. Now, we believe that mitigates the potential for there being a periodic charge for those policies. But there are going to be, there was, there is definitely the case, there's going to be some policies left in the trust at the 10 year anniversary. Now, looking at it on an individual basis, if you had somebody who had died just prior to the 10 year anniversary and that money was left in the trust at the 10 year anniversary because it hasn't been paid out to the beneficiary yet, then there is the potential for a periodic charge. Now, we believe that the periodic charge would only exist if that benefit exceeds a nil rate band, which currently stands at about 325,000 pounds. So there's only going to be a rare occurrence where a claim is going to be that high. I know Alistair spoke about one for 400,000. There are claims that are that high. But for that to be a periodic charge, that benefit would need to exceed that amount in the first instance. But in order to try and circumvent the potential for a periodic charge, yes, what I would say is that we would personally look to move policies to a different trust prior to the 10-year anniversary. This is a slightly controversial area, is what I would say. 

Yes, as with a lot of these things, I've seen nothing is 100% straightforward. Yeah, I appreciate your response on that one, Mark. So another quick question here. Can a master trust be used for death in service pension? Does it actually, is it applicable or is it only for some benefit, maybe even across the two of you? 

Yeah, well, I can take that one to save Alistair's breath. But when it comes to, obviously normally registered policies can have death in service pensions. But for our registered master trust, we have that set up as lump sum only. That was a decision taken when we set it up back in 2016. It kept that simple. Just by the way that definite service pensions work and how the trustees retain liability for those pensions for as long as those pensions remain in place. I believe most insurers' master trusts are lump sum only. When it comes to accepted master trust, you are only allowed lump sums anyway. You're not allowed a death in service pay. You're an accepted to trust or not. 

Great, thank you. 

Are you happy with that one, Alistair? 

That's great. I'm glad we both agree. That's good. Alistair, one for you. Are there any challenges when paying benefits to beneficiaries who are based overseas? You touched on this earlier in terms of not having a UK bank account. I presume there must be various checks and so on that you need to do. 

Well, there are checks we need to do. It does complicate things a little bit, but we can do it. Obviously, there are exceptions. It is complicated for us to pay to somewhere that's subject to a sanctions regime, for example, Iran is one which we've occasionally been asked to make payments to, which gets complicated. But generally, outside that, we can generally manage it, providing we have the usual sort of international swift codes and account details and so on. We do have checks to make, which we do make, but it is possible and it is something that we do do. 

Perfect, thank you. I think this next one possibly for Mark. Who's responsible for doing the HMRC duties? Is it the employer, the insurance company, or does it depend on what type of fast arrangement you have? 

Okay, well, the formal and official answer is the scheme administrator. So that is the official position. Now, If you were to take out Aviva's or using Aviva's template trust and rules, for example, and the employer set themselves up as trustees, those trust and rules are written on the assumption that the trustees take the scheme administrator position, and so it's incumbent upon them to register with HMRC. So very often, when they're using their own trust and rules, it will be the employer as trustees and scheme administrator who register with HMRC. For Master Trust, Zedra took on that responsibility. They only had to do it once back in 2016, and that was that. But occasionally an advisor could do it if the employer appointed the broker as the scheme administrator. I don't know if any advisors would necessarily want to do that, but they may do. And in theory, that is possible. But one thing I would say is we as insurer will never be the scheme administrator for these policies. 

Great, perfect. And again, this is a difficult one and obviously we're not giving any guidance or telling people what to do, but in terms of registered over accepted, you've touched on, Mark, the main differences between the two. When it comes to advisors speaking with their clients, are there any key questions that they should be asking that would maybe decide whether they should be going down one route or another? 

Yeah, that will very much depend on their circumstances. We have seen over the years many Employers switch over to purely accepted as opposed to a mixture of both. But we still have lots of registered policies on our books. They still exceed the number of accepted policies, for example. If they had death in service pensions to cover, then you would have to have a registered policy for that. Now, I mentioned it in my own spiel. But when it comes to accepted trusts and around the rule around tax avoidance, which I think some people are worried about, oh, for an accepted policy, you're not allowed to set it up if the tax avoidance is one of the main reasons to set it up. I addressed it in, you know, when I was talking earlier. I don't believe that's the case at all. Taking out an accepted policy, the main reason is not tax avoidance. but merely to provide life insurance cover. So I don't think it goes against that rule whatsoever. So in terms of putting everyone into an accepted policy, I could never advise anyone to do that. Like I say, I know of plenty of schemes where that has happened. But obviously, clearly you need to ensure that anyone who has benefits which exceed the lump sum and death benefit allowance, you wouldn't really want them to retain all of their benefits within the registered scheme. But yeah, that's quite a hard one. We can't specifically advise people to do that. You would take each scheme on its own merits. 

Yeah, no, absolutely. So yes, I think for advisors, you need to look at the pros and cons, I think, of the different types of arrangements and discuss that with your client. But ultimately, it's between you and them as to which route they go down, whether they go down one or actually they have a combination of the two, which is possible as well as we've outlined. So a question in terms of, and this is a claims thing, but hopefully you can pick this up, Mark, use of the online registry and actually how does that help to speed up the process? And actually does it make any difference in terms of how benefits are paid at the end of the day? 

Are you talking about our online? 

No, so obviously if an individual after a death we would typically look at the online registry to try and establish that somebody has died. Is that always possible? And if not possible, does it change the process? And does it change anything to do with the outcome at all? 

Yeah, so it becomes a case of, do we use that or do we keep, or do we ask for a copy of the death certificate? Very often with the online death registry, it can take a couple of weeks after death for that to be uploaded onto there. Now, if we, as an insurer, can actually conclude that the person definitely has died and they're on that registry, then great, we don't need to see a copy of the death certificate at all, or coroner's certificate, et cetera. So that certainly speeds up the process and makes it easier on the beneficiaries so they don't have to about sending us those things. So yeah, we always try and use that where we can. I'm speaking on behalf of the claims team here. I don't sit in the claims team, but that is what they do. They look online and see if they are on there as part of their part of every claim that they do really. 

Great. Alistair, I think we'll just wrap these up as a final kind of a couple of questions. But Alistair, one for you. If you have individuals who set up their own personal trusts for their own estate, how does that impact on paying under a good life trust arrangement? Is there any correlation between the two? 

Well, they are separate. But it is depending on exactly how it's set up and who are the beneficiaries of the trust, it may be possible for us to pay to that trust. And that may be something that the deceased might have wanted. And if it is, we will think very carefully about doing exactly that. They are quite separate. It is worth noting, this falls out entirely outside the estate. It is often possible to pay to the estate, but if we do, it should be noted that it still remains outside the estate for tax purposes. So it doesn't, the mere fact we paid to executors does not mean it suddenly gets hit with an inheritance tax. So that sometimes can be a convenient solution, particularly if the deceased has set up for the affairs that he or she wanted under a will. So that is something that we sometimes do, and it doesn't affect the tax position, to be clear. But also, if there are trusts set up under the will, sometimes we do indeed make payment to those trusts too, when that's appropriate. 

Excellent. Another one for you, Alison. So in terms of expression of wish forms, often they are in different formats. So the employer might do it online or have paper versions. How would you, what would you normally ask for evidence of to see in those circumstances? 

Normally we would take expression of wishes forms on trust. I personally myself prefer things which can be shown with some confidence to have been filled out by the deceased. Now, that doesn't have to be in paper format. There are electronic versions of those that circulate. But you do sometimes hear a jiggery pokery. I am aware of a case where an expression of wishes form was filled out electronically after the person had died, which was an interesting, speaking from beyond the grave. But generally, I would depending on when it was filled out, but normally I would be treating them on trust. If the employer has been operating a system where they have some confidence that the individual themselves has completed it out, I wouldn't really differentiate between electronic and paper. The paper does have the advantage of having a signature, and very often one can, surprisingly often the signature doesn't look quite as one might expect. But there are often innocent explanations for that, but nevertheless, we'll have a look. 

Perfect. Thank you for that. Well, we've had lots and lots of questions in. Unfortunately, we're not going to be able to get through them all. If we haven't managed to get to your question, then feel free to raise it with your Aviva account manager and they'll help to sort on any of those. Just as a reminder, everything that we've talked about today absolutely is not legal advice or recommendation at all. Again, if you'd like to discuss any particular circumstances, then do contact your Aviva Group Protection. specialists. So just finally like to say thank you very much for joining us today, for Mark and Alistair for your time and your input. It's greatly appreciated and sharing your knowledge and experience. To our audience, just to remind you to download your CBD certificate. Thank you for your takeaways from today to support your client conversations as well. Keep a look out on the Aviva webinar hub. There are future sessions that we run on various topics to help you expand your knowledge and to help you with your client discussions as well. Now, before we finish today, we would really appreciate it if you could give us some feedback on today's event. And we've got a small poll that we're just going to raise here. So how would you rate the presenters today? And we'll give you kind of a resource though just to answer that. Obviously it runs on a 1 to 10, 10 being very, very good and one being not very good. If you wouldn't mind selecting an option, that would be much appreciated. How would you rate the content today? Was it what you expected to see? Oh, it's running through the questions pretty quickly. How would you rate the content and anything else that you'd like to do? Oh, sorry, somebody else taking control. How satisfied were you with Aviva's training overall today? How likely would you be to recommend this Aviva event or an Aviva event to one of your colleagues? And if you do have any other feedback or comments, any other topics that you'd like us to cover in a future webinar or even to look at some of the related to trusts in a bit more detail, we'd appreciate your feedback and any suggestions and we'll be happy to take those forward. Okay, well, that brings us to the end of the session today. Again, thank you very much for attending. We hope you got some valuable output from this. We'd like to hopefully see you again at some future webinars and enjoy the rest of your day. Thank you very much.