Can anyone help? I have a client whose husband is terminally ill and they are looking to sort out there affairs now. They have an endowment policy for £32,000 which is in both of there names, and will be paid out on death of either partner. Her husband would like to leave £10,000 to each of his 3 children in his will, to be paid out from the endowment. My client is then looking at claiming benefits in her own right, but would like to know if the money left in the will would effect her (be treated as notional capital). They are stating that the money left to the children is to help with the future (weddings, houses etc). Can anyone advise me on this? Thanks.

I think they may need expert advice. If the endowment pays out on the death of either partner, does the payment even form part of the deceased person's estate? Won't it be paid to the survivor?

quite. refer to solicitor (a private client,. wills probate, specialist) immediately.

I quite agree. It is very common for these things to be written in trust so that the payout does not form part of the estate of the deceased. If this has been done, whether it is possible to alter the terms of the trust so that the payment does not all go to the survivor is an issue for legal advice.

It is almsot certain that the policy will be treated as owned as joint tenants, which means that it will pass to the survivor outside the terms of the will. There is a possibility that it could be converted into a tenancy in common (eg in equal shares). If the trust were one of land, either joint owner could serve notice of severance on the other without their consent, which would have the advantage that your client would not be seen as having deprived herself of anything. I'd agree with the previous advice, but whoever advises does need to see a copy of all original documentation.
I presume that it is not needed to pay off a mortgage?