Case Study 1 - Ms. A
Our client, then in her mid twenties, had lived with her boyfriend for five years when they decided that they should each obtain a life insurance policy to provide some financial security for their newly arrived child in the unlikely event of a fatal accident befalling one of them.
Impressed by a newspaper advertisement, they contacted a Life Assurance company directly and arranged for a Term Assurance policy to the value of £28,000 for a period of 18 years. This held the promise of a return of half their premiums back should no claim be made by the end of the term.
Had they at that point been clients of BP Sanders & Co we would have advised both that such a sum was inadequate, and that better cover could have been provided for around a third of the monthly premium they had arranged.
In addition, we would have advised them of the importance of writing such a life insurance policy in Trust - being unaware of this information, they neglected to do so. Accordingly, any future payout from this policy would become part of her partner’s estate on death and would not necessarily be paid to her or their children.
Tragically, soon after the birth of their second child our client’s partner was killed in a car accident. It was only at this point that she found out that her partner had left no Will. Because they were unmarried and since the insurance was not written in Trust, any money from the policy would be expected to go to her partner's family, rather than directly to her and her children.
Around six months later and struggling financially having not received any money from the insurance company she contacted us for help. Through extensive negotiation with parties including the Court of Protection, the Inland Revenue and the Probate Office we were eventually able to persuade the insurers that the money should rightly go to our client to provide for her and her two young children.
Further, having secured this sum we were able to advise her as to how to use the money to support her family. Accordingly, we arranged for two building society accounts and longer-term lump sum investments written in Trust for the children's benefit (thus avoiding potential difficulties with child benefits) which should provide a strong financial foundation for her and her children in their later lives.
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