Trust/ MWPA help


I was wondering if someone could help regarding trusts and MWPA.

If one of the beneficiaries named on a trust has passed away, does their share get distributed between the surviving beneficiaries or is it passed to the deceased beneficiary's estate?

I think it would pass to the surviving beneficiaries but I could be wrong.

Also, if all the beneficiaries has passed away, does the trust become a resulting trust I.e. the trust property/policy reverts back to the settlor?

Does MWPA work any differently or does it follow the normal trust rules?

Sorry for all the questions, I have tried to search online for answers but couldn't really find much and would appreciate if anyone could advise where I could find more/further info regarding trusts and the practicalities surrounding them?

Thanks in.advance for your help!


  • It is my understanding that if a beneficiary dies their share falls back into the estate and then is distributed between the surviving beneficiaries unless otherwise specified in the trust deed.

    I think in the case of an MWPA, if the beneficiaries are children and they die before the life assured then the trust can form part of the estate of the deceased child or pass to the resulting beneficiaries (other siblings) if specified.

    I am not 100% certain on this though.

  • Also, I have just read something that says that a child's interest can be made contingent on attaining X years old or surviving the policyholder.

  • Hi rwooffatst,

    Thank you for your posts.

    I've tried to find an answer too and read what I could find online and my understanding is the same as yours, which hopefully means we're on the right track.

    Thanks so much for your help!
  • @Elaine2685 this is a snippet from my STEP book specific to MWPA:

    _It is similar to a bare trust in that if a beneficiary dies, there is an asset/right inside the beneficiary’s estate, which gives a poor asset protection result. . _

  • Hi All

    It can be a bare trust, but writing a trust using the MWPA doesn't automatically make it so as there can be some flexibility with statutory trusts, and so it will depend on the specific wording of the deed. This is from J02:

    Most MWPA trusts are bare or absolute trusts and therefore not flexible. It is possible to create a power of appointment trust under the MWPA as long as the class of potential beneficiaries is restricted to the settlor's spouse/civil partner and children. This is useful if the policyholder is not sure how they want to divide the proceeds and wants to retain some flexibility for the future. However, this type of trust would be subject to the IHT relevant property regime unlike the usual MWPA bare/absolute trust.

    So, I guess, check the trust deed and if there is any wiggle room, it may fall under the relevant property regime. If they are named beneficiaries, then probably not.

    Hope that helps!

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