Hi everyone, we have Charlotte Rogers joining us in our latest episode to talk about the value of Trusts. Charlotte has an incredibly moving story to share about how her life was turned upside down by a life insurance policy that wasn’t written into Trust.
A Trust is designed to get the insurance payout to intended beneficiary of the policy. A key question for any adviser who doesn’t put a life insurance policy into Trust is, if you don’t know the beneficiary then is there any need for life insurance?
The key takeaways:
- Only 20% of life insurance policies are written into Trust in the UK
- Trusts aren’t just for people that are single or co-habiting, married people can need them too.
- The ability to write life insurance into Trust easily differs significantly between insurers
Next time we will have an episode focused upon value added benefits and how important and life changing these can be. These are non-contractual extras that UK insurers offer to their protection insurance customers and it can range from mental health support, to GP appointments right through to second medical opinions from experts in your condition.
Remember, if you are listening to this as part of your work, you can claim a CPD certificate on our website, thanks to our sponsors Octo Members.
If you want to know more about how to arrange protection insurance, take a look at my 13 hour CPD Protection Insurance in Practice course here and 1 hour CPD Protection Competency Exam here.
Kathryn Knowles (00:05):
Hi everybody. We have Charlotte Rogers joining us today to talk about the importance of writing life insurance policies into trust. Hi Charlotte. Hi, Roy.
Charlotte Rogers (00:13):
Morning Catherine.
Roy McLoughlin (00:14):
Morning.
Kathryn Knowles (00:15):
Morning. Charlotte’s gonna be showing her own experience with us about the problems that a person can face if a trust is not completed. This is the Practical Protection Podcast. So Charla, how are you today?
Charlotte Rogers (00:37):
I’m very well, thank you Katherine. And thanks for having me, um, on your, on your podcast this morning. Um, yeah, it’s a beautiful day. So looking that’s good for this one.
Kathryn Knowles (00:47):
Oh good. I, I was gonna say, I’m actually, I know we say it’s a beautiful day. Um, I’m currently in about four layers and I’ve had to put the heating on <laugh> and um, I may grab, I probably should do shouldn’t. I was going sit, I’m going to, um, poly grab fudge soon and have some cuddles with him and Joe <laugh> and how are you doing? Why, how is the wrist doing? Cause you did have a bit of an accident, didn’t you?
Roy McLoughlin (01:08):
Yeah, the, yeah, I fe I fell over playing football, so broke my wrist, uh, in case anyone hasn’t heard yet. And, uh, we are definitely moving in the right direction, but obviously I’m having to do daily exercises, which involves discipline and then she won’t be surprised to hear I’m
Kathryn Knowles (01:22):
Not gonna, that’s, that’s bringing back memories of me, of just this morning with my eight-year-old. Cause he broke his collarbone four weeks ago doing a handstand and um, trying to get him to do the exercises. Well suppose the thing is with him, it’s not trying to get him to do the exercises. He trying to get him not to exercise cause he’s not allowed to exercise for six weeks. And he came home, um, to me on last week and he looked to me and he went, mom, I did pe And I looked at him and I was just like, right, well, what do you mean you did PE? And he just went, it wasn’t proper exercise, it was just tennis. And I was like, okay, so just tennis, where we’re really gonna be using our arms, <laugh>, you know, and definitely our body and running around and trying to be coordinated.
(02:00):
So I’m just constantly in a, a state of terrified at the moment, to be honest as to what he’s doing. And I’m, I’m sure that he’ll come home one day and say to me, I did a handstand again. And I’ll be like, no, <laugh>, just let me wrap him up and keep him away from it all. But let’s get straight into things so shall it is really lovely to have you with us and I know you’ve got such an important personal story to share, but then obviously I know you’ve got such a passion for trust and you’ve got some really, really good practices as a protection insurance advisor. So if you could start us off, please give us a bit of your background, a bit about yourself, who you are and what is it that you do?
Charlotte Rogers (02:36):
Lovely. Thanks Katherine. Well, yeah, so I started in the industry, uh, straight out of university, really just looking for a, a job. And I think with a lot of people, um, of my age, we kind of fell into insurance. So it wasn’t, uh, especially something that I thought my career w would end up in. Um, so that was about 14, 15 years ago. And I was at LV for a period of time as an account manager. Moved to rural London as a business development manager in 2017. And then at the end of, uh, 2019 Defi decided to take the plunge and, uh, be a, a protection specialist myself. And yeah, I was, to be honest, I was just getting frustrated with having the same conversations with the same advisors about actually this topic about the importance of writing policies into trust and not seeing much change. And I thought, well, the only way to kind of drive some more changes is by doing it myself. So yeah, at the end of 2019, uh, decided to become a, a protection specialist and start practicing what I was preaching to everybody else.
Roy McLoughlin (03:41):
That’s what the insurance industry calls joining
Charlotte Rogers (03:43):
The Doctor.
Roy McLoughlin (03:45):
I know that
Charlotte Rogers (03:46):
<laugh>, but it’s all good fun.
Kathryn Knowles (03:47):
So what a timing as well though. So just before the pandemic and everything went completely different as well, insurance-wise, that was really, really right on the cusp though of that change, wasn’t it?
Charlotte Rogers (03:56):
Yeah, it was, obviously it wasn’t something I was planning and you couldn’t foresee it. Um, but I was very fortunate that the beginning of 2020 I had the opportunity to join Radcliffe, which is where I am now, Radcliffe and Co, um, as their protection specialist. So they’re a firm of iass, um, and they didn’t have an in-house specialist and they identified that as, you know, a potential gap in their advice process. So I was very fortunate and joined them in April, 2020. Um, did everything online and here I am today still predominantly working online, which is great.
Kathryn Knowles (04:27):
Yeah, it’s nice, isn’t it? It’s really, really nice being able to do that.
Roy McLoughlin (04:33):
We should also say Redcliffe, uh, then join the P g Michelle
Charlotte Rogers (04:36):
<laugh>. Yeah, they did last year. We just renewed for a second year. So there’s some really exciting, uh, stuff that the pdg are working on with trusts as well, which I’ll, uh, be involved in moving forwards. And it’s really, really exciting, like such an honor to have been asked to join the P D G as as it is. Um, but really exciting to get involved and to try and change some of those behaviors, if you like that we do see.
Roy McLoughlin (05:02):
Well, you’re very welcome. And also for, for any listeners that are interested in joining the ptg, quick, quick, quick plug if I may. Katherine, we’re always looking for new members, so, uh, you know, please do get in touch if that’s something that might interest you. Charlotte, you’ve got such an, you know, an obvious passion for, for trust. I do believe there’s, uh, as as always with lots of people, there’s a, there’s a real life story as to, uh, you know, how you how you personally had, had, were able to relate to this. Do you mind sort of, uh, sharing your experience?
Charlotte Rogers (05:27):
Not at all. Not at all. It ki it kind of goes way back to when I was at LB as an account manager and I had my panel of accounts that I was looking after. In fact, I think Qru you were probably one of them at the time. Yeah, you
Kathryn Knowles (05:39):
Were.
Charlotte Rogers (05:39):
Um, and, uh, so it was, you know, 20 15, 20 16, um, sorry, 20 fif 20 14, 20 15. I was, um, buying my first property with my partner, uh, a lovely, um, Georgian property, which, uh, we, we’d saved up for three years for the deposit and we were on the cusp of buying in, uh, summer of, uh, 2015. And there were various delays in, um, in the completion of it. It was a complete renovation from the builder’s perspective and it just dragged on and on and we were itching to get to get going. And I was relocating to Kent, um, which is where the, the property was. My partner was a submariner in the, um, submarine service, so not at home that often. Um, when he was at home, um, we kind of split our time between our home in Bourmouth and Kent. So a, a move to Kent was on the cards and it was in, uh, December, 2015.
(06:35):
He put his policy into force. Uh, we knew we were very due to complete very soon on the property. And, um, yeah, very exciting. We had a brilliant Christmas and he went back to work in the January, um, up to Fastlane in Scotland. And on the 8th of January, 2016, I got a call to say that we’d finally exchanged on the, the mortgage and everything was good to go. It was a Friday afternoon, I was doing my, my planning for the week, uh, for the year ahead at lv. And uh, it was at that point he said, oh, I don’t think I ever wrote my policy, my life insurance into trust. And I said to Jamal, don’t worry, I’ll, I’ll download the trust forms, um, and we’ll get those signed and you know, next time you are home, sign the trust documents wisdom up to the post office.
(07:21):
Um, that’s it really. And he said, oh, can you do it for me? I said, no, sorry, it’s a legal document. You need to just put your signature on there yourself. When are you home? I asked and he said, oh, not till next weekend. Cause the flight process were really high for this weekend, so I’ll be home next weekend. Okay then bye-bye, speak to you soon, et cetera, et cetera. And that was it. It was at, uh, 20 past three. Um, the reason I know the time so specifically is because 40 minutes later my life did change forever and at 10 passed for little did I know, but Joe had, um, just passed away and he had just entered the first few steps of his training run. He was going on a quick 10 k he told me around the base and he’d call me when he got back from that as I would’ve finished work.
(08:05):
And he used to always call me on my walk back to the car cause it was dark and, and everything else. And when that call didn’t come, no surprise to me. I just thought he’d gone to the bar. It was Friday afternoon on base, have a few drinks with his mates. And it wasn’t until much later in the evening, about half past nine, 10 o’clock, I was starting to get a little bit concerned cuz he’d normally by that point of message to say I’m in the bar. Um, and then just gone 10 o’clock at night, the buzzer to the flat went and I was told the news that Joe had passed away earlier on that afternoon. And my first thought obviously wasn’t financial at all. It was about getting to Kent, getting to his parents and just, just, I dunno, navigating the next few, few days and weeks really.
(08:50):
And it wasn’t until a couple of weeks later, it occurred to me that I did have the life insurance policy, um, because the builder was pushing me to complete on the purchase. And I was like, oh gosh, yes, I’ll get it sorted. I’ll, um, put a, a call into the, the advice firm that set up the policy for him and they sent the trust, uh, sorry, the, they sent the claims form and his parents signed the claims form. But it was at that point that I had to disclose to them that the insurance was in place for the mortgage. Um, and they were unaware that this policy existed. Um, and they told me at that point that they were going to be keeping the life insurance proceeds because they wanted to retire. They couldn’t face going back to work after losing their son. Um, and that was it.
(09:34):
It it, what followed was a bit of a battle, if you like, between me and them about, well this is, I needed this to pay the mortgage. Um, and them not wanting to return to work. And nine months later, once the claim had all been agreed, gone through probate, et cetera, et cetera, it was very apparent that though there was no way that I could afford to keep the property. Um, so had to walk away from the property entirely. And I was just very, very grateful and thankful that the person that we, we were, we were, um, buying off, um, didn’t make me pay the forfeit that you would normally have to pay, um, after exchanging on a property and before completion. So yeah, so that kind of, when I came back to work at LV as an account manager, that’s when I really started active conversations with my accounts around trusts and how important the trust process is. And then my, my experience within the industry is just kind of evolved from there, cu speaking firsthand, having not moved into my house, not moved to Kent, and not fulfilled a dream that I had for many, many years with, with Joe. And unfortunately it did come down to the signature on a piece of paper.
Roy McLoughlin (10:50):
Mm-hmm. <affirmative>. Wow, what a, what a what a story. And I think the first thing we should say is thank you so much for, you know, coming on and being prepared to, to to, to tell that and get people to listen to it because that’s very, very brave. And you know, obviously those winds are still there and, and some of the, you know, as you’re saying that you just, it, it just reminds us yet again how important the stuff that we do is in a general context of, of, of life. Um, do, do you think that, um, I mean, you know, we’d like to think that, that the mortgage and the protection industry’s, you know, work closer together, I, I, I think would be a bit naive if we thought that was, was was perfect. Do you think that was a, another example of where, you know, and I I’m sure Catherine’s got the stats where the mortgage industry probably never quite got the importance of trust in a way that the protection
Charlotte Rogers (11:38):
Industry does. Yeah, I mean, I speak to, the majority of my clients are first time buyers. Um, and the majority of them are unmarried first time buyers. I, it was a decision we made at that time. Do we get married or do we put that 20, 30,000 pounds towards the, the house deposit and we, we chose the house deposit the deposit, yeah. As, as many, many people do. Um, and I’m very fortunate that the, um, the referrals I get, uh, from a mortgage advisor especially, are very good quality and well briefed, um, referrals about, you know, you’re buying this house together, you need the insurance policy. And then I can explain to them why they need the insurance policy and why it should be set up, um, with a nomination of beneficiary or it written into trust because, you know, I’ve been in their shoes, I’ve been that first time buyer, I’ve put all of my savings into a dream. Um, but I do think there’s, it’s not just, I wouldn’t say it’s just mortgage, the mortgage industry, I think it’s a, a lot of referral partners will, writers, mortgage advisors, they’ve got a vague understanding that it’s what they should do, but they don’t really understand why it should be done. Um, and I think that’s the message that needs to be stronger.
Kathryn Knowles (12:54):
I think a, a really big thing that’s like, stands out for me. Like, and as, as I said, you know, thank you so much for sharing, uh, your story. It’s stuff like this that, you know, I think it’s with anything with insurance or anything we’re doing, it’s always, we need to sort help people understand what happens if things go wrong. You know, in a sense, and this is one of those situations that something has gone really, really wrong. And what we’ve been trying to do, especially at Cure, it is really changing the processes, how we approach trusts. I mean, we’re doing this for the last few years and it is, I think a big change as well in the advisor’s mindset is in the sense of thinking is I try and get my team to think of a trust as more of a, the client has to opt out of it rather than the opting in, you know, this is something that’s happening.
(13:33):
You know, I try and make my team think of themselves along the lines of like an accountant and, and a lawyer or something. You know, we’re here providing a professional service. This is a legal document. And, and another thing that I think can really help and Charlotte maybe you sort of like, have some like similar things or Roy as well is that, you know, when we talk about just a lot of people go, oh, well, you know, first thing that usually comes up in the bullet point is, you know, protect, you know, the money from I h t. That’s one of the key things that, sorry said about trust, but I personally with our clients, you know, a lot of our clients aren’t bothered about I h t, they’re nowhere near I h t levels or they don’t feel that they’re anywhere near I h t levels or they don’t foresee how much the property value can increase over time and things like that.
(14:11):
So we like from listening to yourself, you know, obviously the financial aspect of that was, was huge for yourself, but you know, you couldn’t just sense and you just know the amount of emotion that must have been, you must have been living in this bubble of emotion for, you know, at the very least, like you say, it was over nine months. And if you can take that emotional intensity away for especially that longer period of time, so when we are sort of like talk about trust with people we don’t need with the I H T ob, obviously if it is IHT planning, then obviously we will be going into that <laugh>. But if it’s just regular life insurance for mortgage, things like that, we’re just, you know, we focus and say it’s gonna get your loved ones the money quicker, you know, and, and that’s it.
(14:50):
It’s bringing it back, bringing that emotional reason back to the person because the only reason that people are taking out these insurances for life insurance is because there’s somebody there that they don’t want to struggle financially. So there’s some kind of connection, there’s some kind of emotion and it’s trying to make sure that we, we’ve put that all together. So I know Charlotte, you have an incredible, incredible turnaround in terms of trust, don’t you? I mean you’ve got, I think the industry average is around, I could be wrong, but I think last time I heard it was around 20% or something of policies and trust maybe. And Charlotte you are, you are leaving everybody in the dust, aren’t you? You are really, really up there with it.
Charlotte Rogers (15:25):
Yeah, I think it’s going back to what you were saying though, Catherine, it’s about why are we setting up these policies in the first place Now I’m not putting a mortgage protection policy in place to avoid inheritance tax. I’m putting a mortgage protection policy in place so that whoever’s left behind doesn’t have to worry about losing the roof over their head whilst they’re going through so much other emotional trauma that safe space is still theirs. And then when I’m explaining that to the clients, you know, this is why you might want to consider life insurance to protect the mortgage. It’s so that the grieving person has that safe space. They don’t have to worry. But having lived through how long it can take to grant probate being nine months, and I’ve heard it’s even longer since the pandemic as well, that’s still nine months of mortgage payments that that person’s going to have to, to, to meet by themselves.
(16:10):
Now, that was impossible for me. We, we needed two incomes to purchase the, the property as most people do. And we needed two full incomes to afford the mortgage and the bills and the mortgage payment alone was more than I earned. So it was without any form of insurance. You know, if you, if you’re looking at it from that simplistic perspective with one person or one income gone, how is that person going to afford the mortgage for one month, let alone nine months? If, if that’s how long probate’s going to take. So by having the, the trust for me is about getting the right money to the right person, not necessarily at the right time. Cause that will come quite quickly and not necessarily, um, without inheritance tax because that’s not the driver. That’s just an added bonus if you like, if or unless you’ve got a higher, higher net worth case.
(17:00):
So when I was walk talking to my clients, it’s the first conversation. It’s like, why are we looking at life insurance? What would you like to happen? And yes, some of my questions could be quite leading. Like, would you like the, the survi if one of yours to pass away? Would you like the survivor to remain in the property? They’re not going to say no when they’re on a joint call with each other. So it is a leading question. But actually if you were to drill down, that’s a, that they’re not gonna be self, very few people are selfish enough to say, no, I don’t want ’em to stay on the property if it’s a joint purchase. Mm-hmm. So therefore that gives me immediate a green card to talk about setting the policy up and writing it into trust so that in that happens, um, a lot of mortgage advisors I’ve spoken to in the past when I was at the providers would say, well if it’s joint life, I don’t need to do it.
(17:45):
But what happens if it’s joint life and where a joint life policy and they pass away within the 30 days or at the same time there’s still then it will go into the youngest estate and we’re in exactly the same situation. So I still think there’s a very clear argument for having a joint life policy into trust. And I don’t write very many joint life policies as it is. Um, but those that are joint life first event do go into trust for those same reasons. And all I think it is, is it’s about having the conversation at outset. Why are we setting up the policy? What’s the main driver of the policy? And then you can introduce the concept of putting the policy into trust, or the very least setting up with the beneficiary nomination for those providers that offer it so that the end game. So the, the net result is, is the, uh, the original intention.
Roy McLoughlin (18:36):
I, I think the most important point of your story as well as the speed is the ambiguity. And, and we come across this a lot and I think, uh, it always reminds me of deaf and service. So obviously I do quite a lot of group work and, uh, one of the big things about deaf and services, obviously you need a a deaf nomination form and people have to remember that that nomination form is for your employer, not the insurance company. So if you remember what happens with deaf and services, the money’s paid to employer, they whip out the form and say, right, this person is nominated. But if they are the trustee, which they normally would be, it’s at their discretion of course. So it’s an indication and, and quite a lot of times people might say to me, and it’s just interesting, listen to you, um, actually, I I, there there are two obvious people here.
(19:16):
I might own a property with my partner for which there’s life assurance in an English example, absolutely I should pay a mortgage off, but I might wanna lift some money to my parents as well. Okay. So I often tend to come to conversations with people about, well maybe your deaf in service nomination might be slightly different to your life assurance. Sometimes it’s the same, but actually interestingly, sometimes it can be different. And I think there’s the, the, there, there’s an easy win here with, with some of our conversations. They, it’s estimated that between a third and half of all companies in the UK now have deck and service policies. Okay? And pretty much every HR person I’ve ever met makes their people write that their denomination form because the alternative is horrendous. Cuz you’ve gotta start guessing who that per person’s boyfriend, girlfriend, husband and wife, you know, et cetera, et cetera.
(19:57):
So I think maybe, uh, a little tip here would be to bring the conversation into, you know, you’ve probably got some insurance firework now I imagine your your ex-partner did as well. And, and, and that’s an easy conversation to have because they’ve already got it. And then as our office point, that if you leave that job, that’s why the likes of us free still recommend individual life assurance because there’s a good chance you might go to a job that doesn’t have deaf and services. It’s just conceptually bringing those subjects up and just getting, and, and I also think lightning the load, and I often talk about the glass of red wine conversation, which is, you know, the couple sitting down and going, do you know what if so happens to one of us, who does the money go to? Now it might be in that, in, in a situation someone says, but I’d want to look after my parents in some sort of way or or a brother or sister in some sort of way. But we as a professional gotta to your point, have gotta have people talking about this right at the start of the process, not after the Lord Mere show, because this is the classic after the Lord mere show of.
Charlotte Rogers (20:49):
Absolutely. And I think you raised a really interesting point. You know, if a if a death and service policy hasn’t been nominated, then technically the, the employer does have carte blanche on who they recognize as the beneficiary. And interestingly, the Navy did recognize me as Joe’s beneficiary because he didn’t sign a beneficiary nomination form or discretion or whatever. Um, but at that point when they asked me about the form, I said no, that I hadn’t nominated him on my workplace death and service. I said, no, that’s for his parents. I’ve got a private life insurance policy for the mortgage, which will be enough for me. I obviously couldn’t foresee how the events were gonna pay pan out for the private policy, um, to have not received the proceeds for that. Because at that time, you know, another argument I get a lot of is, well, we’ve got a really good relationship.
(21:35):
They’ll make, they’ll look after her, my parents will look after her. I thought that would be the case as well, you know, moving to his home county, giving up my life in Bourmouth, et cetera, et cetera. But without it being written down. And this was the, the clincher for me was it when it, when the policy was paying out to his parents, it came back to me where it, the document wasn’t signed, it wasn’t in writing. Um, and that was that that was the clincher really. It wasn’t in writing, um, recorded calls, anything else weren’t sufficient. It wasn’t in writing. Um, so yeah, going back you can have different, we decided, I decided at that point to have different beneficiaries to say that everybody was looked after. But you have to, if without it being written down, you have to rely on the actions of somebody else, of which you don’t have any control over their actions. Um, and that’s why I,
Roy McLoughlin (22:28):
And of course there is a, there’s a third instrument that all of us will have as well for employed, which is auto Roman, because you have to nominate who your pension goes to on deaf as well. And, uh, I think, you know, the, the more times, although is a morbid subject, the more times you can bring out, eventually it will resonate, uh, you know, with with that individual. And uh, you know, just to, just to reemphasize to our listeners, you can definitely have different people on your pension, individual life assurance and deaf and service. It doesn’t matter. But your, yours is the crucial point, Charlotte. Yeah. You got, right?
Charlotte Rogers (22:55):
Absolutely. And that’s all I say to my, uh, my advisor, my clients now, is that it will only happen if we set this policy up correctly. You ha what does your will say? What does this say? What does this getting all the ducks to line up? Um, and I’m in a good position. I’m very fortunate that I’ve got great relationships with will writers who we talk to each other. So what’s, what does the will say? And is what they’re saying to you they’re saying is what they’re saying to me.
Kathryn Knowles (23:21):
I think that’s a really, really good point. And I think, you know, if we go back, um, to sort of the trust as well, cuz you know, I think, you know, what you were saying there about like joint life into trust and things like that, obviously that can be quite tricky to, to sort of like set up in terms of the insurer’s forms. Um, and you know, I think especially for people listening, advisors, you know, if someone is cohabiting and it is a joint policy, then the trust is really, really, um, but now we’re having a little bit of chat beforehand Charlotte as well, about the difficulties that you can actually have with trust. And I do think that someone’s shows could maybe change their processes a little bit to make things a bit easier at times because, um, so I have a process now within Cure Aware basically for myself and for my team, if there is an online trust available, if there’s a payment, not, you know, the payout planner available and it’s a life insurance policy and they’re not done then without very, very, very specific explanation, that’s seen as an advice fail.
(24:19):
Because ultimately if we’re doing a life insurance policy, there should be a beneficiary. That’s a whole point of knife insurance. So like when we said about bringing these conversations at the start, one of the things I say to my advisors is straight away, right, when you’re doing all the box standard stuff of right, just confirm like your date of birth, right? Okay, you’re a smoker, non-smoker, right? You addressed, do you have a willing place, right? Okay, if I’m doing life insurance, who would you want to pay, you know, benefit from this, can I just have that name and date of birth? And you’ve already started to get that information to fill in that trust from the staff. And I think the other thing as well is that bear in mind, at a point of claims, someone’s gonna need to ring up and get through your data protection process.
(24:52):
So if they’re person who’s gonna ring up and go through, they’ve got, you’ve got to have information on them to be able to speak to them as well. But if you do that, it’s not as if it’s, you can sort of, you can do that, you can bring it in and become a natural part of your conversation. But ultimately, you know, we do just need to have ins, you know, I do really feel that insurers at times need to have a simpler process. I had, and I said before on one of these, um, podcasts, I think I was doing, um, a gift, um, plan for somebody, some gift planning and I was using three insurers and I had to use three different trust types with each insurer because on one of them it automatically was that the, um, the spouse was the beneficiary, which is what I, I couldn’t have because it needed to go to a child.
(25:34):
Another one automatically retained the terminal illness benefit, which I couldn’t have because it needed to be gifted <laugh>. And then the third one, I can’t remember what was that, but there was something, and it was just every single one of them, and obviously for the client as well, they’re really confused. They’re like all of these trusts, they completely, they named completely differently and they’ve got all these different terms. And I was just like, I know I said, and I’m so sorry, but I, I like, and I explained obviously why each one had to be picked. But you sometimes think as you look at things and you say if you’re gonna offer an online version, just there’s lots of insurers who do and do it very, very well. And I know you’re not allowed to copy each other in a sense, but the systems are clearly there <laugh> and, and they clearly work and they’re fine. So why not just integrate it and like the payout plan side of things, you know, it’s so simple just to put a name in. I mean, what, what the difficulties that you find Charlotte about actually getting the trust in place.
Charlotte Rogers (26:20):
So I think you’ve, you’ve raised some really good points there, Catherine, across the whole process. And it can be quite challenging and I think that puts a lot of advisors off from seeing it through. They might know that they have to do it, but I think a lot of, a lot of advisors naturally that we’re all, they’re all busy. We’re all busy. Um, and it’s, you know, they put the owners back onto the client, complete this form and send it back to me. And that’s what kind of where the conversation ends. Um, I think as an industry there’s so much more that can be done. It’s interesting you said we, you know, we know that the systems are there. Yes. And Officer I I’ve had pushback from providers in the past to say, well it’s, we can’t do it that way because it doesn’t fit a trust or it’s not going to achieve what we want to do from America legal perspective.
(27:02):
Well it clearly is if there are providers out there who can do it. So there must be something, there must be some a, a a golden egg for the whole industry. I just dunno what it’s yet, um, OneTrust document, which everyone agrees to a bit like underwrite me <laugh> like the question. That’d be lovely. That was something that would be lovely. Um, but I, that might be wishful thinking. Um, but I think there’s a lot more, I think there’s, there’s two things. I think the advice perspective, from an advice perspective, we can change that slightly by, um, I think from an advice perspective, we can change the process that we work by, but I also think from a provider perspective, they need to make this easier. Is it being, I’m gonna bring it back to consumer duty, but are we being fair to, uh, to their consumers, to the end user by not making the process easy to understand. And by having a lot of technical and legal jargon, which can be quite overwhelming, you know, the, the trust document might be a page long or two pages long, but the, the guide that goes with it is 10 pages long. It can be quite overwhelming for what actually the, the nuts and bolts is quite a simple process and, and simple outcome. Um, so yeah, I think there’s, there’s more to be done on both sides for definite, but it’s only gonna change if we have more conversations around trusts.
Roy McLoughlin (28:24):
It’s also sometimes written in oldie weldy language as I call it, uh, which just puts people off straight away, doesn’t it? And I think one of the problems we have with, with trust is a lot of the trust law that we use yeah, literally goes back centuries. Um, you know, and that’s, that surely can’t be fit for purpose. And I’m sure, uh, you know, uh, there, there are some legals but I j I just think, come on, this must be something that we can resolve far easier, um, by, you know, just getting I guess the law society in with, in with the big actuaries in with the reinsurers of the insurers and sit around the table and make this easier. Cuz it’s, it just feels so antiquated. Um, and isn’t it strange that when relevant life came along and they made it compulsory to put a trust in place in order to go and risk suddenly that worked really easily and and I thought Eureka, here we go. But nothing’s changed.
Charlotte Rogers (29:11):
No, I think that’s an interesting point as well. Cause you know, some providers have got leniency there as well saying you can put a policy on risk, but we’ll give you a certain amount of time to get the trust document back because we understand the client needs to cover and it can take time to post a document out, get it all signed on witness. But what’s really interesting is the disparity between providers and the amount of signatures needed on a trust or wet signatures versus online signatures, DocuSign, et cetera, et cetera. I think the beneficiary nominations that a couple of the providers have implemented a fantastic at just doing that first step. A lot of my policies will then go into further trust. Um, because it doesn’t, you know, I I I use the joint life po um, car crash scenario quite a lot. Um, you know, let’s just dot all the i’s and cross all the T’s just in case.
(30:04):
So yes, beneficiary nomination is an amazing first step and it’s, I’m a massive fan of it, but then writing the policy into a subsequent trust as a fallback is, is only gonna benefit the client. But you’ve got breathing space to be able to do that because you know that the chances of that hap that scenario actually happening is relatively, is much smaller. So the beneficiary nomination will at least do the job. And if beneficiary nomination had been around when Joe had taken out his policy, I have absolutely no doubt cause the calls were very explicit in who Joe wanted to benefit from the policy. It would’ve been, it would’ve just been part of the online, the application process to put my name and date of birth as part of the application and then that would’ve solved a lot of the, the fallout, the subsequent fallout.
Kathryn Knowles (30:51):
So a really key, oh, sorry, sorry. I think a really key thing from that as well is when we talk about ch insurer changing systems is, you know, we, we obviously know that there’s a couple of providers who offer the payout planner and the beneficiary nomination. It’s, it’s one page in the application form and you kind of think it, it can’t do it can’t take that much to change it. Now I know I’m not an IT person, I work very closely with our IT person and I appreciate our systems aren’t the same as an insurer’s systems, but it surely doesn’t take that much. To add one more page in <laugh>, one more thing just to have that in there. And, and yes, I imagine then there’s like the knock on effect in terms of claims and them understanding where it is and having all that kind of background process done.
(31:31):
But you do sort of think, you know, in terms of like, well if you’ve got a couple of insurers that are doing that, they should be able to. And I, and I think another thing that we need to really, um, probably bring up and highlight in terms of consumer duty as well is um, the fact that the inflexibility to change trust. So in a, if later on in this season I’m actually gonna be speaking with um, C which is a charity for surviving economic abuse and it is something that we’re hearing a lot more about and uh, Johnny Timson um, being, doing quite a lot of, um, discussion and debate at the moment about the need to not write policies into joint life, that they should be individual because of the fact that we are seeing quite a bit in terms of financial abuse and when insurers aren’t making it easy for us to change trusts.
(32:12):
You do think that, you know, the consumer duty, I know a lot of consumer duty we’re getting lots of it fed into us as advisors. You know, there’s lots and lots of webinars going on about how we need to change our processes and everything. But I do sometimes think, well what about going upwards in the chain as well? What about the insurers? What are they doing in terms of that consumer duty aspect? What are they doing in terms of the vulnerability, the lead generation, this end thing in terms of the trusts, um, and making it better for people. So I I think there’s quite a lot of areas that, you know, there’s, there’s a lot of implications at the moment of change that I think everybody needs to do. Like you were saying, Charlotte, it’s, it’s everybody that needs to change and start to develop their processes. Cause it’s that whole thing, isn’t it, just cuz something’s been the way that it’s been for such a long time doesn’t mean that that’s the right way to do it.
Charlotte Rogers (32:56):
Exactly. Roy, I think the p d g have got a big task on their hands coming up.
Roy McLoughlin (33:00):
<laugh>,
Charlotte Rogers (33:01):
<laugh>.
Roy McLoughlin (33:02):
We certainly have, we certainly have <laugh>. Um, let’s focus on a positive. I mean listen, the, the, the negative of this whole conversation is the, I think, uh, yeah I think you’re right. It’s, it’s about one in five policies is written under trust. So let let’s assume it’s 20%, which is rubbish. Okay, it was 11 by the way, so we’re getting slightly better. Okay. What would, what would be your tips, uh, Charlotte to an advisor who might be feeling a bit of, you know, pushback from for, for, from customers when they bring the subject out? What, what are some of the, you know, as well as telling your story, which I’m sure, I’m sure sure does get told, but, um, uh, what, what would be your tips to to to make the whole process easier? Um, at that point were the customers coming
Charlotte Rogers (33:39):
Advice perspective? I think any advisor should just be confident in the advice they’re providing and why they’re providing it. And it’s just having that confidence to say, well you told me that you wanted this policy for X, Y, Z with all due respect. This isn’t guaranteed to happen unless this trust document is completed or unless this process is followed, um, because of X, Y, Z. So obviously each individual is gonna be very different. And I’m not saying that we can get a hundred percent of policies into trust. There are going to be some that, you know, my, I’m close to a hundred percent, but there are some that do still fall out for the process. And the priority is getting the policy on risk and covered and hopefully they don’t have the family fallouts further down the line. But it’s just about from, I believe having that confidence using my story.
(34:26):
I tell my story, I’m, I’m doing this podcast cause I want more people to understand that life isn’t all rosy and they might be buying a property together or they might be doing X, Y, Z but things can change. Um, and then from that leading on to that, from that the advisor having the confidence to ask for help as well. You know, if they’re, if they’re not sure on which trust documents you use, speak to the BDMs of the providers. There’s, there’s lots of online or the trust decision trees on provider’s websites to help you get the right trust to help you complete the trust. Um, you know, there’s technical, most providers will offer some technical support or the BDM will be able to guide you through that process. That’s how I learn. Um, and
Roy McLoughlin (35:10):
Yeah, it’s worth going on. The odd worth going on your
Charlotte Rogers (35:12):
Yeah, they’re available for sure. Um, you know, I’m, I’m, I need to improve my knowledge and reading company accounts, so I’m, I’m going on accountancy courses and all things like that. It’s just broadening your, the, the overall not being siphoned into, I’m an insurance advisor, broker specialist, whatever you call yourself, but actually making sure that the policy is going to do what it’s going to do, do. Because I was very crossed with Joe’s advisor very cross and I, I don’t want anyone to be cross at me for doing for not the policy, not doing what that person was expecting it to do. At the end of the day, they’ve passed away, they can’t see, they can’t speak, they have no say in the matter whatsoever. Um, and that’s a, that’s a really difficult thing to get your head around when you know what the intention was and the intention was so clear, but it doesn’t mean anything once that person’s passed away or lost capacity. So that’s where I also bring in will writers and, um, putting in powers of attorney. Yeah. Uh, just as important as as and making sure that your will and your powers of attorney do what your policy is expecting it to do as well.
Roy McLoughlin (36:23):
Yeah, I mean that’s a fabulous point and I think, um, uh, the three of us are all signed up to the why the will writing is so important as part of our journey. Do you, presumably, I think you alluded to, you work, uh, closely with, uh, some, some will writing people so as, as do I, as as, as the Katherine, some, some tips. So maybe some of our listeners to, to potentially go out and find some
Charlotte Rogers (36:42):
Alongside. They’ll love it. Um, it’s a great introduction to them, but it’s a great referral, cross-referral. I speak to a lot of will writers who are setting up guardian provisions for their children or for the client’s children. Well, without that, without an iur policy, can the guardian afford to take on said children. Um, and so it’s a lovely, I get lovely referrals back from will writers to say, oh, clients come to me to write their will. We’ve been talking about x, y, z um, talking about putting in guardianship provisions. I’d like them to talk to you about affording those guardianship provisions. So there’s the will writers, there’s loads, there’s loads out there. If you’re in networking or you’ve got contacts with local solicitor firms or anything like that, they would welcome a conversation around life insurance and the wills.
Roy McLoughlin (37:33):
Yeah. And that goes for some, some business, uh, will as well. Absolutely. As well as
Charlotte Rogers (37:37):
Individual. Correct. Yeah. And there’s, I think a lot of people will, writers dunno where to turn, they do the will and they don’t really know where else to go. But yeah, it actually, they
Roy McLoughlin (37:47):
Sort of stopped. They stopped,
Charlotte Rogers (37:48):
Yeah. Is it’s just they saying, well you are doing this well, I can do this bit of the process for you. And likewise, I’m doing this bit, I’m setting up the life insurance policy and I’m sorting out the will, but at the moment, the house, I don’t know where the house is going cause I can’t write the house into trust. You need to speak to a will writer to, to get all of that. So it’s just about joining up and a lot of my clients want to get it all done, done first time yet fine. Then it’s, it’s kind of all the ticks in the boxes and they can move on. They can complete the house and they can move on from there.
Roy McLoughlin (38:21):
Well, I dunno about you two and you are fact find, but certainly in, in the Cavendish Square fact find there’s a big uh, uh, in, in heavy black type. Have you made a will? Uh, yes. No. And then we have a follow up question, which is, would you like us to arrange, uh, a will? So, um, again, sometimes that might be some kind of fact find that people have glossed over, but would you say that’s something we need to, to really focus on when
Charlotte Rogers (38:40):
We fact find, that’s one of the first questions I ask, like Catherine, I think you mentioned name, date, birth, um, address, et cetera. Have you got a will now? Have you got powers of attorney? No. Right. Yeah. And then as b before we finish the first initial fact find call, it’s identifying, right, I’m going to be looking at life insurance to protect the mortgage. I’m gonna be looking at critical illness income protection, but I’m also gonna be looking at policy for the provisions for the, for your, for your children to, for them to go to a guardian. And you mentioned that you haven’t got a will, so it’s just about creating a little checklist and the wellbeing and extension of the, your advice that you will refer them to a will writer or you encourage ’em if you don’t have any, um, solid relationships with will writers. You are documenting it that they should be seeking further advice in that area as well.
Roy McLoughlin (39:30):
You’ve already alluded to earlier. But can you just, without getting into too much detail, you just briefly tell our listeners, uh, what intestacy means.
Charlotte Rogers (39:38):
Well, what doesn’t it mean? Um, <laugh> for, well, law of intestacy is what the government thinks should happen to your money essentially. Um, and without, you know, if you are unmarried your assets and your estate passes to not the person you would think it due to a lifelong partner to the person that you cohabit with, but it will go to parents, siblings, et cetera, et cetera. Um, and it’s a very complicated set of rules as I’m sure you’re aware, but it’s, um, you don’t want it basically mm-hmm.
Kathryn Knowles (40:10):
<affirmative>. Right. Can you take us through
Roy McLoughlin (40:12):
And eventually one one of those, I was gonna say one of those people on that list, which always makes me smile, although he’s now the king was the dutchy of, uh, Lancaster, which of course was Prince Charles. So ultimately if you’re in, if you’re in Sain, uh, uh, uh, you know, the crown used to get your money, um, because there’s a, a very redefined list and you know, the thought of, uh, of uh, that, you know, some of your well earned money going off to the crown, I think would, would, would shock off.
Kathryn Knowles (40:37):
What I was gonna say was, so I think what would be interesting, because I, I think a lot of people, a lot of advisors or, and just generally people would think, well, I’m married so why would I need this? My partner inherits, you know, there’s no, there’s no I h t between couples. You know, we do hear that you inherit each other’s estates, but it’d be really good, I think if you can just go over potentially just very briefly for us all not too intense or anything like that, but, um, what is the law of intestacy when it comes to married couples are people in civil partnerships?
Roy McLoughlin (41:06):
Right? So, but okay, so basically firstly, let’s start with everyone should have will. Okay? And I think, let’s break this down very, very simply. Will is very, very simple. We over overcomplicate. It is a piece of paper which basically has your wishes on okay. And people spend far too much time telling people who they want their, their lovely earrings to go to or their set of arsenal programs, all of that sort of stuff. Forget about all that. It’s just simply a piece of paper that says, in the event of my death, I want these people to have my estate. What comes in the estate comes afterwards with coda cells and stuff like that. If you don’t have a will, what happens is that you’re in test state and as we just alluded to the delay, okay, but also the challenge from external sources can be a nightmare.
(41:48):
And I’ve seen this firsthand. Um, uh, I think our record, uh, recently was a 20 month intestacy. Okay? So you’ve got, you’ve got to get these things done, okay? Um, you’re absolutely right. There’s no inheritance tax between husband and wife. But the other reason for this is of course, something happens to both partners, okay? And it’s a great way of doing some very, very basic but very, very simple, um, inheritance tax planning. Okay? Um, but I think Charlotte just hit the nail on the head guardians. Okay? When I sit down with people and I talk to ’em about who’s gonna look after people’s kids, okay, I always ask an interesting question. I say, who are your guardians? And they naturally roll out the name straightaway. Yeah. Okay. And then I always, I dunno about you, Utah, I always go, what does people like me money?
(42:30):
Okay? And quite often they look at you and they go, what do you mean? I said, are they quite good with money? No. Yeah, no, not brilliant with money, actually, <inaudible> and I just always talk to people about why don’t you have a guardian and a separate trustee? Okay, right? Because the guardian’s a person that’s gonna be due to the, the day-today looking after. And often someone, you might want someone external, even if your guardian is good with money by the way, to come and give some perspective on how to bring that child up. Do they know your views on private education? Do they know your views on, do they go on every school school trip? They can go on? Do they know your views on do they get a car when they’re 18? You know, et cetera, et cetera, et cetera. Which is why I call it the glass of red wine conversation.
(43:08):
And I think sometimes you get all those people round a table with a glass of red wine because you’re talking about the dreaded D word and you almost, uh, you almost have a bit of, a bit have, have a bit of a, a bit of a laugh about the conversation just to break it down and just talk about those things. Because I’ve sat in many a room, particularly on things like private education where brothers and sisters have turned around to people and said, oh, you’ve changed your views. Um, now if you don’t have those conversations and uh, uh, you don’t, you don’t have those sits down, you’re gonna have problems. But also what it always ends up in is, oh my God, we’d better take a will out. Okay. And I also think, as Charlotte also mentioned earlier, um, you should have LPAs, EPAs, all of those sort of things as well. It’s just, it’s just a nightmare if you haven’t got that stuff in, in, in, uh, in place. So I think in Intes toy is delay and ambiguity and just yuck when you don’t want it. Um, so I, you know, I think it’s, uh, let’s not overcomplicate a will. It literally, I
Kathryn Knowles (44:06):
Think people are hitting those like the intestacy levels far quicker than people would really realize. And obviously even property alone can really push you over it. Cause I know we’re, we are quite familiar with a, a case where everything went completely wrong for somebody and there were over the levels. And basically what had happened is because if you do have a married couple and there was a civil, oh, there’s a civil partner there, then in that instance, anything up to 270,000 pounds, there’s no, there’s no issues. But anything over that they can without, if they’re in that situation without a will, if it’s over 270,000 pounds, the person will get the 270 and half of anything above that, but the other half would go to someone else, maybe children. And there was a horrible, horrible case where there was somebody, I’m Prince Charles. No, it’s just not that one.
(44:50):
I’m thinking that one. It’s not, I’m don’t forget Prince Schulz. Well, you know, there was a married couple, but there was no will in place. And they had a property that was worth a quite significant sum. And the courts forced them, the, the surviving partner to sell the property because the children were able to, the children were obviously were able to have half of the value above 270. So, and the, the children were young, they wanted to still be in the home. The parents don’t want ’em to be in the home. But because of the way that it was all going, it ended up in a really, really nasty situation. So, as you said, you know, I will, it, it doesn’t have to cost silly amounts of money. It is just something where it can be nice and simple. Um, so definitely
Charlotte Rogers (45:30):
With blended families as well, it’s even more important. Yes. Um, and, you know, maintenance payments to, uh, an ex-partner for the maintenance of your children, but you’ve bought a new property with your new partner, um, but you passed away, but then they can make a claim or against your estate for the remaining maintenance payments. It can get very messy and very complicated and a will and a life insurance and trust just takes away all of that nastiness further down the line. So it’s a conversation I’m having more and more with blended families now as well.
Kathryn Knowles (46:04):
That’s a really, really good point, Charlotte. Thank you. Is there anything else that you would like to share with us as insights or any kinda like final call to action to advisors or the insurers or anything at all?
Charlotte Rogers (46:15):
I know we’ve drifted a little bit, but I would just like to ask all advisors just to refer back to why your, why policy’s being set up in the first place and what the end intention is. And if the end end intention needs a trust, have the confidence to speak about the importance of a trust or beneficiary nomination and just remember that the outcome doesn’t always go your own way.
Kathryn Knowles (46:38):
Absolutely. Brilliant. Brilliant. Final thing. Okay. Thank you very much everybody for listening. And thank you for joining us today, Charlotte. Uh, next time I’m gonna be back with Matran and we’re gonna be talking about protection insurance and ovarian cancer. If you’d like a reminder of the next episode, please drop me a message on social media. I’ll visit the website, practical heightened protection dot code uk. And don’t forget that if you’ve listened to this as part of your work, you can claim a CPD certificate on the website too. Thanks to our sponsors, the Octomembers. Thank you, Charlotte. Thank you, Roy.
Charlotte Rogers (47:07):
Thanks, Catherine. See you soon. See
Kathryn Knowles (47:09):
You soon.
Transcript Disclaimer:
Episodes of the Practical Protection Podcast include a transcript of the episode’s audio. The text is the output of AI based transcribing from an audio recording. Although the transcription is largely accurate, in some cases it is incomplete or inaccurate due to inaudible passages or transcription errors and should not be treated as an authoritative record.
We often discuss health and medical conditions in relation to protection insurance and underwriting, always consult with a healthcare professional if you are concerned about any medical conditions and symptoms we have covered in any episode.