A. A life insurance policy 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 requirements of the insurer issuing the policy.
B. A trustee may qualify immediately after probate of the will. Upon appointment and qualification of a trustee, the proceeds of the insurance shall be paid to the trustee to be held and disposed of under the terms of the will. If there is no valid will appointing a trustee or if the trust provided by the will is invalid for any other cause, the designation of a trustee as beneficiary of the policy shall be void. If no qualified trustee makes claim to the proceeds from the insurer within one year after the death of the insured, or if satisfactory evidence is furnished to the insurer within the one-year period showing that no trustee can qualify to receive the proceeds, payment shall be made by the insurer to the executors, administrators or assigns of the insured, unless otherwise provided for by the owner of the policy, if the owner is other than the insured, or by the insured by agreement with the insurer.
C. The proceeds of the insurance as collected by a trustee shall not be subject to debts of the insured nor to estate taxes to any greater extent than if the proceeds were payable to any other named beneficiary other than the estate of the insured.
D. For purposes of trust administration, the proceeds shall be subject to the court's jurisdiction over the trust as in any other testamentary trust, but the proceeds shall not be considered as payable to the estate of the insured.
E. This section does not authorize payment of policy proceeds to any testamentary trustee who is not otherwise qualified to act as a testamentary trustee. A qualified substitute trustee may be appointed to perform the trust provided by the will.
F. Enactment of this section shall not be construed as casting any doubt upon the validity of any previous life insurance policy beneficiary designations naming trustees of a trust established or to be established by will.
G. As used in this section, "life insurance policy" shall 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 or transferred to a trustee named or to be named in a will in the same manner and to the same extent they could be made payable to or transferable to any other person.
1968, c. 524, § 38.1-408.1; 1968, c. 553, § 38.1-442.1; 1986, c. 562.