Estranged husband life instance (family pocketing it)

[LooUpdate]

I separated from my husband about 3 years ago. We have 2 young children. Sadly he passed away in the spring.

He had life insurance through his employers. His family are "managing it". I've asked if I will have access to this money and they say no, it's not for daily living. They said they will spend it on things like the children's schooling and holidays. (That's great but daily living is surely even more important?) I even said I was willing to provide receipts to prove I was spending the money on the kids.

I am now the sole parent with 90% of the overnights (grandparents do the 10%). I never divorced my husband.

My question is: even if my husband has specified that he wanted his family to handle the life insurance money, do I have any rights to it as his wife (and mother to his children).

presumably down the track you could challenge the trust management.

Can this be done?

Are there any questions you can recommend I ask his employer/life insurance co? I currently have them in email conversation.

You need legal advice and you need it fast.
I am not sure whether next of kin intestate overrides an a expression of interest for life insurance

Seconding that you need legal advice. The SIL is obviously planning to play hard ball, what a horrible dig about your time as a SAHM.

If you were legally married to him at the time of his death and there is no will then his estate is yours to deal with. SIL should not be dealing with the flat and I would be suspicious that it is worth more than you think and that she is are pulling a fast one on you.

I am on housing benefit and child tax credits. I am a student. How do I access legal advice on a low income?

It’s up to the trustees who that money gets paid too surely.’

Well if you're on hb you're all housed with no danger of kids not having a roof over their heads.

Actually having the money in trust for the kids is doing you all a huge favour. If you have access to it you'd not be able to claim benefits and the lot would be gone in a few years. At least this way the kids will get something when they're 18.

There are two separate things

1. Life insurance - yes he can nominate who he wants. SIL is married no children yet DH remains her nominated life insurance person and any other benefits that come through work

2. If he died intestate then as his wife you should be in charge - and the flat should become yours

I had to nominates beneficiary to my pension and life insurance at work. Not sure if that over rides instructions in my will or laws of intestacy though.

Could it be that he instructed it to be left in trust for the children and you aren't aware of that?

titchy I never thought of it that way. However I will be coming off benefits in about 1 year when I complete my studies.

SIL is married no children yet DH remains her nominated life insurance person and any other benefits that come through work

Why is that? What does her husband think about it?

Could it be that he instructed it to be left in trust for the children and you aren't aware of that?

OP has clarified that's exactly what he did, with his sister as trustee.

However I will be coming off benefits in about 1 year when I complete my studies.

Well that's great - you'll be able to afford housing and childcare then (and if you find you don't earn enough you'll still be able to have your income topped up with benefits.) You'll also have the option of paying for some of the children's activities from their trust.

You need to separate out the trust money from the estate money. They are completely separate. The trust money has gone to your kids - this is a great thing for them. The estate money is yours, if there is any. However I think you should be the administrator of the estate not the sister. Phone the probate office and ask.

I think you need to contact the family again and say that you are next of kin, therefore need to be the person dealing with the flat sale.

You need to separate out the trust money from the estate money.

But how can I guarantee the trust money is spent on the children if I'm not the one dealing with it?

You need to know how much is in the trust and what the terms and conditions are.

The trust money won't be in a bank account in her name! You can ask for regular statements. You can ask the company how they ensure the trustee is acting responsibly. And at the end of the day if the trustee isn't acting in the best interests of the trust holder they can be removed.

Looupdate her husband is fine - they are a second marriage for both and he has a daughter (an adult) and she has no children. The house they live in goes to his daughter (as do the rest of his individual assets) her life insurance policy and any further assets go to DH and from there our two children. They discussed it before they got married and both are happy. It was more to say it can be done

Op you need good advice because you are allowed to ask the trustees to disregard the deceased’s instructions - it’s not like a will that has to be followed to the letter; they have discretion as to what is done with the money.

And while they might have thought yes, it will end up with the children, that’s ok, if you had been notified and had told them that ex would normally pay £xxx a month in child maintenance and that the trustee is refusing to hand over any money for their daily running costs - then that’s very different and they can step in. Particularly as you are a student so not in a position to have lots of extra cash to make up for the shortfall.

While I’m not a lawyer, I’ve read this in many places - it’s one of the typical example scenarios given in the sales/info literature for life insurance that’s a company perk.

Obviously now they have handed it out it is much harder for them to reclaim it so I suspect they will try to fob you off with that letter and claiming that they have ensured that it will be going to the dc. It would certainly be worth a try though - you have nothing to lose at this point and everything to gain.

Hopefully there will be someone on here who could give you pointers on the important things to piloint out to them in a letter if you don’t have any legal cover or can’t afford a solicitor.

Money that someone leaves in trust to their children passes outside their estate. If the sister has been appointed as trustee in accordance with the deceased’s wishes there is not much you are going to be able to do about that. Particularly as you want to be able to spend the funds on yourself rather than your kids.

Particularly as you want to be able to spend the funds on yourself rather than your kids.

How did you reach this assumption??

The only things she can do re the trust is , If she has evidence the trust is not being used for the children’s benefit, the sister can be taken to court as failing to manage the trust according to its mandate. It would be worth finding out if as the only parent and legal guardian of the beneficiaries , can you request statements? Can your dc request statements when they turn 16 or 18? Will the remainder of the trust pay out to them when they reach their majority/ a defined age? I think you would need a lawyer on this but if at any point you or your children will have the right to demand the statements I would tell sil now, so she knows she will be accountable.

You say you want the money for “daily living” that’s how I came to that conclusion. Have you any evidence that his family are “pocketing it” as you say in your op? If so, you could attempt to remove them as trustees. But if they are just ensuring it’s spent on the children that’s not really sufficient.

You need to essentially forget about the life assurance. Ask the sister what her plans are for it and when the kids will have access to it, just so you know.

However, if he is intestate then you are the legal recipient of the rest of his estate and his sister is acting illegally in selling the flat. You need to contact the solicitor who is handling this as it sounds like they haven’t informed the solicitor that he had a wife.

Bereavement support payment is more than that if you have dependent children. £3500 lump sum and £350pm for 18 months

Update: His work are refusing to give me details of the life insurance (terms, etc). They say I should talk to his sister for details. Great. So does that mean there is literally no accountability? Who ensures the funds are spent on the children? Essentially he's favoured his sister over his own kids. I just cannot believe it. This has really impacted my grieving.