CHAPTER 524

An Act to amend the Code of Virginia by adding a section numbered
88.1-408.1, relating to the designation of a testamentary trustee as
the beneficiary of life insurance.

Approved April 4, 1968

[S 310]

Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia be amended by adding a section numbered
38.1-408.1, as follows:

§ 38.1-408.1. A policy of life insurance may designate as beneficiary
a trustee or trustees named or to be named by will, if the designation
is made in accordance with the provisions of the policy and the require-
ments of the insurance company issuing the policy. The trustee or
trustees may qualify immediately after probate of the will, and
upon appointment and qualification the proceeds of such insurance shal]
be paid to the trustee or trustees to be held and disposed of under the
terms of the will as they exist at the death of the testator. If no qualified
trustee makes claim to the proceeds from the insurance company within
one year after the death of the insured, or if satisfactory evidence is
furnished the insurance company within such one year period showing
that no trustee can qualify to receive the proceeds, payment shall be made
by the insurance company to the executors, administrators or assigns of
the insured, unless otherwise provided by the insured by agreement with
the insurance company made during the lifetime of the insured. The
proceeds of the insurance as collected by the trustee or trustees shall not
be subject to debts of the insured and inheritance tax to any greater extent
than if such proceeds were payable to any other named beneficiary other
than the estate of the insured. For purposes of trust administration such
proceeds shall be subject to the court jurisdiction over the trust just as in
any other testamentary trust, but such proceeds shall not otherwise be
considered as payable to the estate of the insured. Such proceeds shall be
listed for inheritance tax purposes as proceeds of policies payable to a
named beneficiary other than the estate of the insured. Such insurance
proceeds so held in trust may be commingled with any other assets which
may properly come into such trust as provided in the will of the testator.
Enactment of this section shall not be construed as casting any doubt upon
the validity as heretofore existing of any previous life insurance policy
beneficiary designations naming trustees of a trust established or to be
established by will. The words “policy of life insurance” as used above,
shall be construed to include other types of contracts under which proceeds
become payable on the death of the testator, to the end that interests
other than those described as “life insurance” may be made payable
to or transferred to a trustee or trustees named or to be named in a will
in the same manner and to the same extent they could be made payable
to or transferred to any other person.