Life policies written into Trust have long been a mainstay of financial planning. They can ensure policy proceeds are paid swiftly, outside probate, and often in a tax-efficient manner. For advisers, they are a familiar tool, underpinning inheritance tax strategies and giving clients reassurance that loved ones will be looked after. Yet one problem crops up far more often than many anticipate: what happens when the trust deed itself is lost?
The High Court confronted this very question in Fassam (deceased), decided in August 2025. The case concerned a life assurance policy placed in trust back in 1987, where the original deed had disappeared. The insurer had paid the policy proceeds into the estate, leaving those responsible for administering the estate uncertain how to distribute the money.
Why the deed matters
The trust deed is not a mere formality. It is the legal document that creates the trust, appoints trustees, and defines the class of beneficiaries. Without it, there is no definitive record of who has authority to act and who is entitled to benefit. Insurers are understandably reluctant to pay out without sight of the deed, although gaps in their records often contribute towards the initial problem. Trustees may hesitate to exercise powers and beneficiaries may argue over entitlement.
In the Fassam case, the problem was sharpened by family circumstances. The deceased, Patricia Fassam, had two sons. One had died before her without leaving children. The other, Jason, survived her but had no spouse or children of his own. Later trusts created by Patricia in 1992 and 2009 suggested a consistent pattern of benefiting her sons, but the terms of the original 1987 trust (the one holding the life policy) could not be found. This absence of documentation meant there was no certainty that Jason alone was entitled to the proceeds.
The Court's solution
Patricia's personal representatives (PRs) sought guidance from the High Court. With no trust deed and no direct evidence of the 1987 trust's terms, the court could not declare Jason the absolute beneficiary. Unlike Hansell v Spink [1943], where contemporaneous notes allowed the court to reconstruct lost trust terms, here only circumstantial evidence existed.
Instead, HHJ Paul Matthews turned to the principle of Re Benjamin [1902]. A 'Benjamin order' allows assets to be distributed on an assumed footing, protecting PRs or trustees from personal liability if they later turn out to have been mistaken, while preserving the rights of anyone who might eventually prove a claim. In this case, the assumption was that Jason, as the sole surviving son, was the beneficiary.
The order authorised the PRs to distribute the proceeds to him, but with the recognition that he bore a modest risk: if, in the future, another beneficiary emerged with proof of entitlement under the 1987 trust, Jason could be required to repay the proceeds. For the PRs, however, the order gave the necessary protection to act without fear of personal liability.
Why advisers should care
For financial advisers, this is not simply a technicality. It illustrates a practical risk that advisers are likely to encounter as older policies mature. Many of the trusts created in the 1980s and 1990s were set up informally with insurer-supplied forms, signed in advisers' offices, and filed away without professional storage and many clients did not keep certified copies or digital records.
Decades later, it is hardly surprising that families are left unsure. They know a policy was "in trust," but cannot produce the deed. When a claim arises, the absence of the document causes delay, uncertainty, and, as the Fassam case shows, potentially costly legal applications.
Managing the process
When clients present with a lost deed, advisers are often the first port of call. They cannot resolve the legal question themselves, but they can play a crucial role in managing the process. That means helping clients gather any secondary evidence, explaining the likely need for statutory declarations, confirmatory deeds or indemnities, and preparing them for the possibility of a court application if the sums are significant or disputes likely.
Managing expectations is vital. Advisers should explain that while resolution is possible, it may involve delays and costs, and it may not provide complete certainty. By coordinating communication between insurers, trustees, beneficiaries and solicitors, advisers can minimise conflict and keep the process moving.
Prevention as professionalism
The more important lesson is one of prevention. The Fassam case shows how fragile an estate plan becomes if its paperwork goes missing. Advisers who build checks around document storage and retrieval demonstrate professionalism and protect their clients from the very situation Patricia's family faced.
At review meetings, advisers should not shy away from questions such as: Where is the original trust deed? Do the trustees have a copy? Has a certified or digital backup been created? These conversations may seem administrative, but they are essential to ensuring that financial planning works when it matters most.
Clients should be encouraged to keep deeds securely, to use solicitor or insurer storage facilities where available, and to make certified copies. Advisers who adopt these practices not only protect client outcomes but also reinforce their own credibility in a regulatory environment that increasingly values long-term client results over short-term transactions.
The bigger picture
The decision also sits within a broader legal and regulatory backdrop. Trustees are required to maintain adequate records, reinforced by the Trust Registration Service regime. From an FCA perspective, advisers who arrange trusts without ensuring documentation is secure risk falling short of best practice in delivering suitable outcomes.
Insurers, meanwhile, are inconsistent in their approach. Some accept statutory declarations and indemnities where originals are missing. Others remain inflexible. Advisers who anticipate these differences and prepare clients accordingly can smooth what might otherwise be a fractious process.
Lessons learned
The High Court in Fassam provided a pragmatic solution to a thorny problem. By authorising the PRs to pay the proceeds of the 1987 life policy to Jason, the surviving son, it avoided paralysis. But the solution was imperfect. It left Jason carrying some risk and underlined the danger of relying on assumptions when a trust deed is missing. Mrs Fassam's family circumstances were also relatively simple (one child and no grandchildren) and if they had been more complicated the court proceedings could have been more contentious and costly.
For financial advisers, the case offers two lessons. In a crisis, you can guide clients through the available remedies, liaise with insurers and solicitors, and keep families informed. But the greater professional responsibility lies in prevention – ensuring deeds are created, stored, copied and retrievable decades later.
A missing trust deed should never derail a client's plan. Advisers who take this seriously provide clients with what they value most, not just financial strategies, but the confidence that those strategies will deliver at the crucial moment.
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