GOVERNMENT LIFE ASSURANCE.

New Zealand Times, Volume XXX, Issue 4525, 21 September 1875, Page 2

GOVERNMENT LIFE ASSURANCE.

e TO THE EDITOR OP THE XEW ZEALAND TIMES. Sin.—The interest which, by yonr article of this morning, you appear to take in the Government Life Assurance scheme leads me to suppose that you will give me space to point out how in certain respects I think the Government Assurance and Annuities Act of 1574 requires amendment. I refer to that portion of it relating to policies taken out by a man for the benefit of his wife and children under section 10. This section declares that such a policy " shall enure and be deemed a trust for the benefit of his wife, for her separate use, and of his children or any of them ;" and then " so long as auy object of the trust remains" gives absolute protection to such policy from the bankruptcy laws, subject, however—and properly so —to the policy not not being for more than £2,000, and to the premiums being payable during the whole of the husband's life, and during any period thereof, not being less than seven years. Then, unless the husband when taking out the policy declares in what shares he wishes the wife and children to take the money, he is enabled by another clause, either by a deed or by his will, to apportion it among them "as he may deem proper." Then, by the 18th section, if the children are infants when the moneys became payable, the Act declares that such moneys may be paid to the Public Trustee, whose receipt for them shall be a sufficient discharge to the Commissioner, and who is empowered to apply such moneys for the benefit of the infants. Then, by the 10th section, when the sum secured by any policv under the 10th section becomes payable, the Supreme Court or a Judge thereof may appoint the Public Trustee, or any other person, trustee of such money, and the trustee may, as to so much of any such money as is held by him in trust for any infant, unless the Court or Judge sh»ll otherwise order, from time to time apply the same or any part thereof, or the annual proceeds thereof, for the maintenance, education, or advancement, or otherwise for the benefit of such infant during infancy, and the balance thereof shall from time to time be invested by the trustee in bonds or debentures issued by the General Government of New Zealand." This 19th section would therefore seem to give the Court power to put in trust even the wife's share and also that of the children who are not infants. Now sir, the defects I would point out are these: The husband ought to have power during his lifetime to appoint trustees of the fund derivable from the policv, to direct investments for it till the corpus is divisible, and also, if ho thinks tit, to give to his widow for her life, or until second marriage, the whole of the income derivable from the fund, without power of touching any of the corpus, or of anticipating the income; and then to divide the corpus among the children on their becoming of age as ho thinks proper. It seems to me that the disposal of the money is too much fettered by the Act. The wife gets her share at once to do what she likes with. There is no protection against extravagance or folly on her part, or the influence of a second husband, should she take one. For want of this the interests of the infant children may suffer much. The object of exempting these policies from the bankruptcy laws is to ensure a man's wife and family not being left absolutely destitute after his death. I do not think this object will be always attained unless some such provisions as I have spoken of are made. I think that the fairest way for a man to leave his property at his death—especially if it be a small one —is to give to his widow the income of the whole of it during her life, or until her second marriage, and then to let it all go to the children, unless it is large enough to allow of the widow retaining some of it, even though she marries again. Such a disposition is practically not permitted by this Act so far as relates to moneys payable under a policy issued under this IGUi section. The mother's maternal instincts can be trusted to care for her children, to the best of her ability, so long as thcro is no second husband to prejudice her feelings ; and if she marries again her second husband should be left to support her. It is also a mistake to compel the moneys payable to infants to bo administered by tho Public Trustee unless tho expense and worry of an application to the Court to appoint another person as a trustee is undertaken. .No doubt, the institution of the Public Trust office was a boon to tho colony, and the gentleman who is at present Public Trustee is well qualified for his post. But, sir, especially where the amount is as large as £2OOO, it would often bo better for tho interests of the cestui </hc trust that the trust property should be managed by private trustees, especially by the same trustees who may possibly manage tho other properties of tho deceased husband, if he has any. A certain amount of circumlocution and rod tapeism is unavoidable in tho conduct of affairs by a public officer like the Public Trustee. At any rate the husband should havo the right to appoint trustees to his own liking. Let the Public Trustee bo left to manage the affairs of those who prefer that ho should do so, or who have no suitable friends to appoint as trustees. Another defect is, that tho share of an infant in the sum payable under one of these policies can only be invested in General Government debentures, that is to say, it can only bear about £5 per cent, per annum, whoreas if tho range of investment were wider, interest at rates varying from £7 to £l2 per cent could easily bo obtained, and the corpus of the fund ) bequite os secure as if invested in General Government debentUOno other defect I will point out, and that is, that the word children, as interpreted by the Act, would I think, include illegitimate children. The chief objection to this is, that as it might often be impossible at tho time of the insured's death to hnd out whether he had illegitimate children, and if so, how many ; the trustee might years afterwards be liable to a person proving his parentage for tho share belong-

ing to him and improperly distributed to the other children of his father. w hSil'JV 5 /?/ tak '" B - llp so much of your space, but hoping that if my criticisms are well founded they may meet with attention in the proper quarter,-I Wellington, September 18.