Discretionary Trust

Before you complete this form, we would recommend that you read our ‘Guide to Trusts’ and speak to a legal
adviser. They will be able to help you decide whether a trust is right for you and, if so, which type of trust would
suit your needs best.

Terminal Illness Cover

You can choose to put the terminal illness benefit into the trust or keep it as a retained benefit. If you do put it into
the trust, we will pay any benefit for terminal illness to the trust and not to you. The trustees would then distribute
the benefit according to the terms of the trust.

Once you, and the trustees that you choose, have signed this form:

 all benefits payable under the Covers included in this form and not retained by you will be gifted to the
beneficiaries;
 you will no longer be a beneficiary for the Covers included in this form;
 the trustees can only be changed in accordance with the terms of the trust;
 the trustees can retain assets until they think it is the right time for them to be distributed.

What is a discretionary trust?

A discretionary trust is a trust where the beneficiaries and their entitlements to the trust fund are not fixed but are
determined by the criteria set out by the settlor in the trust instrument.

Putting an insurance plan, or parts of it, in trust is not right for everyone. Before completing this form, it is
important to discuss your needs with your legal adviser.

Trusts and taxation

Normally, life protection policies that have been put in trust aren’t included in your estate - there should therefore
be no inheritance tax to pay. It may not be necessary, therefore, to register this trust with Her Majesty’s Revenue
& Customs (HMRC). If this trust is part of a wider gifting programme, there may be some benefits to registering
this trust with HMRC. Your adviser will be able to tell you if you should register your trust with HMRC.

The laws for gifts and trusts may change in the future. AIG Life Limited cannot be held responsible for any
information given or any changes in tax provisions or legislation that may affect the policies within the trusts or the
tax treatment of either the policies or the provisions of the trust or the rules applying to gifts for inheritance tax
planning purposes.

What if I have a joint life cover?

You can use this form to put a joint life cover in trust, the details of both people whose lives are insured by the
cover need to be included in the Declaration of Trust section of this form. Note: please be aware that the life policy
proceeds will be paid to the trustees in the event of a valid claim. If this is not your wish, then putting your plan
into trust may not be right for you and you will need to speak to your legal adviser to discuss the appropriate
action that meets your needs.

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Section A: Definitions
The words in this form which begin with a capital letter have particular meanings which are set out in the table
below.

Word Definition
Additional Trustee The person appointed by the Settlor to be a Trustee of the Trust as listed in Section C
– The Declaration of Trust or such other person or persons who may be appointed as a
Trustee of the Trust

Beneficiary A Potential Beneficiary and, where clause 2(b) of Section B - The Trust Provisions
apply, a Named Beneficiary

Child/Children A child that is a:

 Natural born child of the Settlor
 Legally adopted child of the Settlor
 Stepchild of the Settlor
 Illegitimate child of the Settlor

Civil Partner A person who has gone through a Civil Partnership Ceremony with the Settlor and is
classified as their partner under section 1(1) of the Civil Partnership Act 2004

Excluded Person A person specifically identified in Section C - The Declaration of Trust as excluded from
being a Potential Beneficiary

Incapacitated A person who in the opinion of two medical doctors lacks mental capacity

Minor A person considered to be under the age of consent - currently age 18 in England,
Wales and Northern Ireland, and age 16 in Scotland

Named Beneficiaries The beneficiaries named in Section C - The Declaration of Trust as the beneficiaries
who may receive a benefit from the Trust under clause 2(b) of Section B - The Trust
Provisions

Policy The life assurance contract (or 'cover') that the Settlor is putting into this Trust and
which is identified in Section C - The Declaration of Trust

Potential Beneficiary The beneficiaries named in Section C - The Declaration of Trust as a beneficiary who
may receive a benefit from this Trust

Settlor The person who sets up the Trust and is identified as the 'Settlor' in Section C - The
Declaration of Trust

Trust The Trust that is set up pursuant to this Discretionary Trust Declaration incorporating
this Section A - Definitions, Section B - The Trust Provisions, Section C - The
Declaration of Trust and any amendments to these provisions

Trustees The Settlor and the Additional Trustee or Additional Trustees or the Trustees for the
time being

Trust Fund The Policy, all the title, benefits, rights and interest of the Policy, all monies received or
payable under the Policy and all property and monies added thereto by way of further
settlement, accumulation of income or otherwise

Trust Period The lifetime of the Trust which shall be up to 125 years

Trust Provisions The provisions set out in Section B

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Section B: The Trust Provisions
We have used headings to help you understand and find particular clauses. These headings do not form part of
the Trust Provisions and do not affect their meaning.

References to people involved in setting up and running the Trust in the singular can mean one or more persons.
So, for example, 'Settlor' can mean one Settlor or the Settlors. If the reference is in the plural, it can also mean
one person. Also ‘He’ can mean ‘She’.

Wherever the Trust refers to an English legal term for any action or remedy, judicial proceeding or legal
document, legal status, court official or any legal concept and the Trust is subject to the jurisdiction of a country
that is not England, then if the context requires, that English legal term shall be construed to be the relevant legal
term that most closely approximates it in the relevant legal system.

1 Declaration of Trust
The Settlor hereby assigns to the Trustees the Policy and hereby declares that the Trust Fund shall be held
upon the trust and subject to the powers and provisions declared and contained in this Trust, except if the
terminal illness benefit is retained as set out in Section C - The Declaration of Trust, any terminal illness benefit
payable under the Policy shall be for the benefit of the Settlor absolutely and shall not form part of the Trust
Fund.
The Trust will operate in accordance with the Policy in place at any given time.

2 Power of appointment
(a) Subject to the instruction for terminal illness benefit referred to in clause 1 of these Trust Provisions, the
Trustees shall hold the income and capital of the Trust Fund upon trust for the benefit of one or more of the
Potential Beneficiaries at any time during the Trust Period in the shares and upon the terms as the Trustees
shall in their absolute discretion appoint. All appointments shall be by deed and may be stated to be
revocable or irrevocable.
(b) If the Trustees do not exercise the discretion to appoint as stated in clause 2(a) of these Trust Provisions, the
Trustees shall notify the Potential Beneficiaries of their decision to not exercise such discretion and then shall
hold the income and capital of the Trust Fund upon trust for the Named Beneficiaries in the shares specified
in Section C - The Declaration of Trust.

3 Payment of income and capital

(a) The income (if any) of the share of any Potential Beneficiary who is a Minor and is entitled to benefit from this
Trust shall have his or her share of the proceeds and income (if any) held in trust on their behalf until such a
time that they are no longer a Minor.
(b) Where any Potential Beneficiary is a Minor, the Trustees may pay the full or part of the income of the monies
held under trust for the benefit of the Minor in line with the Settlor’s wishes and for the benefit of the Potential
Beneficiary, as the case may be, and in accordance with clause 10 of these Trust Provisions. Such monies
may only be used towards the maintenance, education or health of the Potential Beneficiary who is a Minor.
Section 32 of the Trustee Act 1925 shall apply to this trust as if the words "one half of" were omitted from
section 32(a)(1).

4 Settlor and Excluded Person unable to benefit

No power or discretion conferred on the Trustees by this Trust or by law, either expressed or implied, may be
exercised so as to cause or permit any part of the capital or income of the Trust to become payable in any way
for the benefit of the Settlor or, where applicable, any Excluded Person.

5 Irrevocability
This declaration of Trust shall be irrevocable.

6 Number of Trustees and power to appoint new Trustees

(a) There must be at least two Trustees appointed at any given time one of which must be a person who is not
the Settlor.
(b) The Settlor shall be vested with the power to appoint new Trustees (such appointment must be made by
deed) during his life or so long as the Settlor is able to execute this power (in that the Settlor is not
Incapacitated).
(c) The Settlor hereby appoints the Additional Trustee or Additional Trustees to act with the Settlor and in line
with the powers conferred upon them in this Trust. The Additional Trustees shall acknowledge their position
and responsibilities bestowed on them by this Trust or any subsequent revisions of the Trust.

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(d) After the death of the Settlor the Additional Trustees shall have all of the powers of the Settlor whilst living
and with capacity.

7 Power to remove Trustees and retirement of Trustees

(a) Provided he is not Incapacitated, the Settlor shall for so long as he is able to execute this power, have the
power to remove any Trustee without giving reasons for doing so and without the need for other Trustees to
agree or otherwise, provided there are at least two Trustees remaining after the removal has been
completed.
(b) A Trustee can be removed by the other Trustees where the Trustee who is being discharged of their duty is
Incapacitated or cannot be found provided that in the case of the latter:
• none of the other Trustees have been in contact with the Trustee being discharged within the preceding
twelve month period;
• the other Trustees (one or more) have made reasonable efforts to make contact with the Trustee to be
discharged; and
• the discharge is made by deed executed by all of the continuing Trustees being at least two in number
including at least one who is not the Settlor and a declaration is made in such deed that all reasonable efforts
were made to contact the Trustee who cannot be found and that the continuing Trustees have written to the
missing Trustee's last known address without success and that they have attempted to contact the missing
Trustee through all other addresses given to them during their investigation.
(c) A Trustee may retire provided that following the Trustee's retirement, there are at least two continuing
Trustees. A Trustee's retirement shall take effect from the date of the notice of retirement sent in writing to
the continuing Trustees.

8 Power to invest
Where monies are held by the Trustees for a period of time until distribution of the proceeds is possible, the
Trustees shall have the power to invest such monies in an investment that will not be classified as a wasting
asset and shall be easily accessible to enable prompt distribution when appropriate. The Trustees shall be
entitled to move such monies as appropriate in order to make the investment.

9 Trust Income
Any income accrued in relation to the Trust shall be paid or added to the Trust proceeds for the benefit of the
Potential Beneficiaries.

10 Distribution of assets
(a) All Trustees must approve any distribution made under the terms of this Trust to the Potential Beneficiaries.
(b) The benefits from the Trust Fund may be paid to a Potential Beneficiary.
(c) Where the Potential Beneficiary is a Minor, the benefits may be paid to the parent, legal guardian or person
with the legal capacity acting on behalf of the Minor who shall take receipt of the monies to be held for the
benefit of the Potential Beneficiary who is a Minor and may provide a receipt in full discharge of the Trustees'
duty.
(d) The benefits from the Trust Fund may be paid to a treasurer or other person acting in an official capacity
approved by the charity which has been identified as the recipient of such benefits.
(e) The Trustees shall make a full discharge of monies payable to such person(s) under any policy forming part
of the Trust. The Trustees shall pay the benefits after deducting any reasonable charges outlined in clause
11 of these Trust Provisions.

11 Power to charge
(a) A Trustee but not the Settlor engaged in a profession or business shall be entitled to charge and be paid all
professional and other charges connected with their duty to act as Trustee and distribute the benefits. This
charge shall be no greater than the Trustee's normal professional charges and may include expenses
incurred through administration, professional opinion or peripheral expenses. Where a Trustee is not in a
profession or business they shall be entitled to charge reasonable costs incurred in carrying out their Trustee
duties.
(b) A Trustee but not the Settlor shall be entitled to receive commission payments for professional and other
services connected with their duty to act as Trustee and distribute the benefits. This charge shall be no
greater than the Trustee's normal professional charges and may include expenses incurred through
administration, professional opinion or peripheral expenses. Where a Trustee is not in a profession or
business they shall be entitled to receive reasonable commission payments in carrying out their Trustee
duties.
(c) A corporate body acting as Trustee shall be entitled to charge fees in accordance with their normal professional
charges for Trustee work. Such terms may be reviewed and agreed with the Settlor from time to time.

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12 Power of appropriation
The Trustees may appropriate any part of the Trust Fund in or towards satisfaction of the interest of any
Potential Beneficiary and may for such purposes place such value on any property as they think fit.

13 Power to add or exclude Potential Beneficiaries

The Trustees may add a class of persons to the list of Potential Beneficiaries and may add a person or class of
persons to the Excluded Person list provided that such addition was requested in writing by the Settlor.

14 Power to vary administrative provisions

The Trustees may amend or add to the administrative provisions of this Trust provided such amendment or
addition is by deed.

15 Power to delegate
The Trustees may, by acting jointly, delegate any power conferred on them by this Trust to any person who
provides professional services in relation to the delegated power and such person shall exercise the delegated
power on such terms as they think fit. The restrictions on delegation in sections 12 to 15 of the Trustee Act 2000
shall not apply.

16 Liability for breach of trust

The liability of a Trustee for breaches of the Trust shall be limited to breaches arising from the Trustee's own
fraud, wilful misconduct or gross negligence except in the case of a Trustee acting in a professional capacity.
The Trustees shall not be liable for the default of a person acting under a delegated power pursuant to clause 15
of these Trust Provisions provided they took reasonable care in the selection and supervision of such person.

17 No duty to consult
The Trustees are under no duty to consult the Potential Beneficiaries or accept instructions from any Potential
Beneficiaries. The Trustees may exercise their powers with absolute discretion.

18 Trust Period
The lifetime of the Trust shall be up to 125 years.

19 Law
This Trust shall be governed by and construed in accordance with the laws of England and Wales.

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Section C: The Declaration of Trust
This declaration of trust is made on the

day month year

for

Cover reference P

Cover type

Between

1st Policyholder Full name of Policyholder

Full address of Policyholder

Postcode

2nd Policyholder (for joint life Full name of Policyholder

policies)

Full address of Policyholder

Postcode

And

1st Additional Trustee Full name of Trustee

Full address of Trustee

Postcode

2nd Additional Trustee Full name of Trustee

Full address of Trustee

Postcode

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3rd Additional Trustee Full name of Trustee

Full address of Trustee

Postcode

4th Additional Trustee Full name of Trustee

Full address of Trustee

Postcode

Potential Beneficiaries
The Trustees may select anyone in the list below to receive benefits from the Trust

1. Any widow, widower of the Settlor;

2. Any surviving Civil Partner of the Settlor;

3. Any Children and any other direct descendants of the Settlor or Settlor(s);

4. The parents, brothers, sisters of the Settlor(s) and the Children of any other direct descendants of these
persons;

5. Any person(s) entitled under the will or intestacy of the Settlor(s);

6. Any person(s) or charity other than the Settlor(s) nominated as a potential beneficiary by the Settlor(s) by notice
in writing to the Trustees; or

7. Any other person named below:

Full name of Potential Beneficiary

Full address of Potential Beneficiary Postcode

Full name of Potential Beneficiary

Full address of Potential Beneficiary Postcode

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Full name of Potential Beneficiary

Full address of Potential Beneficiary Postcode

Full name of Potential Beneficiary

Full address of Potential Beneficiary Postcode

Terminal Illness Benefit to be:

Retained by the Settlor Gifted to the Trust Mark as

appropriate

Named Beneficiaries
The Trustees may distribute benefits to the persons listed below pursuant to clause 2(b) of the Trust Provisions:

1st Named Beneficiary Full name of Named Beneficiary

Full address of Named

Beneficiary

Postcode

Share (%)

2nd Named Beneficiary Full name of Named Beneficiary

Full address of Named

Beneficiary

Postcode

Share (%)

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Excluded Persons:

The following persons shall be excluded from being a Potential Beneficiary notwithstanding any other provision of
this Trust:

Full name of Excluded Beneficiary

Full address of Excluded Beneficiary Postcode

Full name of Excluded Beneficiary

Full address of Excluded Beneficiary Postcode

Full name of Excluded Beneficiary

Full address of Excluded Beneficiary Postcode

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Execution of Trust
THE SETTLOR SHOULD ENSURE HE/SHE HAS CAREFULLY READ THIS DISCRETIONARY TRUST
DECLARATION FORM AND HAS TAKEN LEGAL ADVICE ON THE SUITABILITY AND TERMS OF THIS
TRUST

Please note

Independent Witness - please ensure that all signatures are witnessed by someone who is not the Settlor, Trustee
or a Beneficiary of the Trust. The witness must be present when each person signs the document. The same
person can act as witness for all signatures, or a different person can witness the signatures.

Signed as a deed by the Settlor(s):-

1st Settlor Signature of the Settlor

Independent Witness Signature of Witness Full name of

Witness

Address

Postcode Date

2nd Settlor Signature of the Settlor

Independent Witness Signature of Witness Full name of

Witness

Address

Postcode Date

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Signed as a deed by the Trustees:-

1st Additional Trustee Signature of the 1st Additional Trustee

I, the above named Trustee, acknowledge and accept the appointment as Trustee

Independent Witness Signature of Witness Full name of

Witness

Address

Postcode Date

2nd Additional Trustee Signature of the 2nd Additional Trustee

I, the above named Trustee, acknowledge and accept the appointment as Trustee

Independent Witness Signature of Witness Full name of

Witness

Address

Postcode Date

3rd Additional Trustee Signature of the 3rd Additional Trustee

I, the above named Trustee, acknowledge and accept the appointment as Trustee

Independent Witness Signature of Witness Full name of

Witness

Address

Postcode Date

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4th Additional Trustee Signature of the 4th Additional Trustee

I, the above named Trustee, acknowledge and accept the appointment as Trustee

Independent Witness Signature of Witness Full name of

Witness

Address

Postcode Date

Appointment of a company as a Trustee

To be used where a Trustee is a company

Signed as a deed for and on behalf of:-

Name of Trustee company

Signature of Director

Signature of Director / Secretary

Date

The above named Trustee acknowledges and accepts the appointment as Trustee.

AIG Life Limited. Telephone 0345 600 6820. Registered in England and Wales. Number 6367921. Registered address: The AIG Building, 58
Fenchurch Street, London EC3M 4AB.

AIG Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority. The registration number is 473752.

EDCO0856-0716

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