A fresh approach to trust, probate & estate insurance.

Issue Risk Insurance

If the trustees and beneficiaries of a trust or settlement agree to the assets in the trust being distributed early, or the terms of the trust deed being varied (for reasons of IHT liability or other considerations) the trustees may potentially face a successful challenge in the future from a child or children as yet unborn for whom no provision out of the trust fund has been made.

If a claim arises after the proceeds of the fund have been distributed, the trust may need to be reinstated to the extent necessary to provide the funds which should have been available to the entitled issue once born.

Key Benefits

  • Upon payment of a one-off premium cover is provided in perpetuity or until such date as is required by the trustee
  • Removes the risk to the trustee of personal liability arising out of the distribution of the trust funds without having provided for the unborn issue’s share
  • Allows the trust to be wound up or varied where the current beneficiaries have agreed the trust is no longer required or should be modified
  • Ensures that the potential interests of as yet unborn children are provided for in accordance with the requirements of the Court where applicable

What The Policy Covers

  • Any liability of a trustee to reinstate the trust fund for the benefit of issue born in the future to ensure they receive their entitlement under the trust fund, insofar as it is not provided for by any new arrangements
  • Any other costs and expenses incurred with the prior consent of the insurer

Facts To Consider

If approval of the Court is sought by the trustees, the Courts will normally only agree to the winding-up or variation of a trust involving potential, but as yet unborn, issue where the interests of such issue will not be prejudiced. With an Issue Risk Policy those interests are protected by insurance and we will work with you to ensure that the policy is acceptable to both the Courts and the trustees. The Issue Risk Insurance, in those circumstances, becomes an integral part of the legal process.