Report No. 66

IV. English Law

8.7. Section 11, Married Women's Property Act.-

In England, under section 11 of the Married Women's Property Act, 1882 (Eng.),1 a policy of assurance effected by any, man on his own life and expressed to be "for the benefit of" his wife and children or any of them (and similarly by a woman for her husband and children), creates a trust in favour of the "objects". Certain propositions emerge from the case law relating to this section:

(a) So long as any "object of the trust" remains unperformed, the policy moneys do not form part of the estate of the insured.2 They are not subject to his (or her) debts, except where the policy was effected and premiums paid with intent to defraud creditors, in which case the creditors will be entitled to a sum out of the policy moneys equal to the premiums so paid.

(b) The section has been liberally construed, so as to include (i) endowment3 policies, and (ii) accident insurance policies.4

The vagueness of the phrase "for the benefit of" in section 11 of the English Act of 1882 has created certain questions which have, in course of time, received judicial construction.

(i) Thus, a policy effected under the section by a man for the benefit of his wife (unnamed)5 and children, ensures for the benefit of a second wife and the children of a second marriage;6 and, unless the policy provides otherwise, the beneficiaries will take jointly.7

(ii) But, subject to any contrary intention, a named wife forthwith takes an absolute vested interest in the policy, so that if she pre-deceased her husband, it forms part of her estate;8 her husband, however, has a lien for any premiums which he pays after her death, as being payments made by a trustee to preserve the trust property.9

(c) Even if the person for whose sole benefit the insurance was effected is guilty of the murder or manslaughter of the insured, the policy moneys will nevertheless be payable by the insurance company. However, as it would be against public policy to allow the beneficiary to take the moneys, they will form part of the insured's estate.10

1. See Appendix 3 for the text.

2. Clay's Policy of Assurance (in re:), (1937) 2 All ER 548.

3. (a) Loakimidis's Policy Trusts (in re:), 1925 Ch 403; (b) Fleetwood's Policy (in re:), 1926 Ch 48.

4. Gladitz (in re:), 1937 Ch 558.

5. See, generally, (1952) 96 SJ 720.

6. Browne's Policy (in re:), (1903) 1 Ch 188, See also Parker (in re:), (1906) 1 Ch 526 and contrast Griffith's Policy (in re:), (1903) 1 Ch 739.

7. Daview's Policy (in re:), 1892 Ch 90.

8. Cousing v. Sun Life Assurance Society, 1933 Ch 126; and see Kilpatrick's Policies Trusts (in re:), (1966) 2 WLR 1346.

9. Smith's Estate (in re:), 1937 Ch 636.

10. Cleaver v. Mutual Reserve Fund Life Association, (1892) 1 QB 147; see para. 8.19, infra.