Trust policies and administration: Under s11 of the Married Women's Property Act 1882, what does a life insurance payable to a spouse or child create?

• A. A revocable trust in their favour
• B. A bare trust for all dependants
• C. An immediate trust in their favour
• D. No trust created

Answer: (C)

Under section 11 of the Married Women’s Property Act 1882, if a life insurance policy on the life of a married person is made payable to the spouse or to a child, the proceeds are treated as being held on trust for that spouse or child. This trust is created automatically and takes effect immediately on the payout, giving the recipient an immediate equitable interest in the money. It is not a revocable trust, nor a bare trust, and it’s not that no trust is created—the statute ensures an immediate trust in the beneficiary’s favour. This reflects the aim to protect the designated recipient’s entitlement to the policy proceeds.