I’ve led an interesting life. Four years ago, I had structured, and was managing assets for several professionals who wanted total privacy. One of them had intent to obtain a used Mercedes Benz, and I had put it into trust for him. He also didn’t want his name on the insurance policy.

One of my past experiences was to have a short-lived licensee status as a Property and Casualty (Automobile/Homeowners) insurance agent. I learned the basic rules and workarounds that made unusual situations smoother. I carried this information forward, even though I hated selling insurance almost as much as eating a sardine and banana sandwich.

North Carolina (where this occurred) has an insurance policy for underwriters to get an agreement signed before issuing a policy that is an agreement of the policy holder to inform the insurance underwriter of “any additional drivers” of the property being insured.

The beneficiary wanted total privacy, and didn’t want to be listed on the insurance either.

So, I set up the personal property trust, and structured it so that (a) the Trust and the Trustee (me, in this case) was authorized to purchase insurance for the property (vehicle) and add the trust as an additional named insured, and (b) I wrote a paragraph that eliminated and nullified any duty to notify the insurance underwriter of any additional drivers or anyone enjoying beneficial use of the property, any law or policy notwithstanding. I matched this with the confidentiality clause in the Trust, to ensure that I was bound to keep this beneficiary private, and yet my intent was to insure the property even though he would be an “unknown” driver on the policy.

In legalese, the term “driver” is fluid, and includes the Trust, because the Trust is an additional named insured on the policy. Further, it would follow that the Trust, and the parties to the trust are one and the same in this setting of insuring the vehicle to cover the Trust’s property, and the use of that property as authorized by the Trust.

The trust was signed, and when I set up insurance on the vehicle, I did so as Trustee of the trust. I added the Trust as an additional named insured on the policy. Then I signed the paperwork this way: “Principally and perpetually subject to the terms of ***** Trust, without waiver, by Trustee” and then I signed my name afterwards. The use of a disclaimer changes the terms of the signature. For more information, research “restricted endorsement”

The insurance company (underwriter) issued the policy, even after being given notice that the agreement was subject to the terms of the Trust, and they NEVER asked to see the trust. Their agreement couldn’t have been more evidenced.

Six months later, late one night, the beneficiary hit a deer and totaled the Mercedes-Benz. I got a copy of the police report emailed to me, and I (as Trustee) initiated an insurance claim on behalf of the Trust.

I had an adjuster call me and say “We are not going to cover this accident, because the person listed on the accident report is not a named driver on this policy.”

I told her “I’m going to send you a copy of the original paperwork I signed, and I’m going to paste in a provision from the Trust.” I sent her my copy of the original signed paperwork (so she would be clear that I had a record of the transaction, as effected) and then I pasted in the paragraph that eliminated any duty of the Trust to inform the underwriter of any beneficiary or additional drivers (users) of the property. I also reminded her that the Trustee (I) was a named insured, and the Trust was an additional named insured, and the claim had been initiated in the name of the Trust.

She called me back shortly and said “We’re going to cover this.” And, it was covered fully.

That, my dear reader, is the power of words, and a clear example of how to use them in a way much mightier than the sword.

I’ve told this story several times recently, so I wanted to put it in writing so that you could enjoy it also. From time to time, I’ve helped people use some unorthodox, but entirely legal methods to keep peaceful existence. This is one of those experiences.

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