Husband wants to put all his pensions in trust for kids.

[messiejessie]

My husband wants to put all his sizeable corporate pensions in trust for our 3 kids, should he die which is free of IHT.
I have a very small pension but do benefit from rental property I brought into the marriage. His point is that I wouldn't need his pension,
we are both 50 and in good health and i hope we would have a lot more living to do do and enjoy our life. Our kids are still at school or uni. The marriage is rocky,

It seems to me that he is trying to prevent me from benefiting from our joint assets if he were to die. If I died unexpectedly and left everything to him, including a substantial property and a rental there would be nothing to protect my share (for our kids) from a second marriage for example.
Would it not be fairer to put aside 5o percent of the pensions for the kids and 50 to me? In any case I wouldn't want our kids to inherit too early as they have not established their own careers yet or met life partners . I think giving kids money too early is a bad idea. (This is theoretical of course as no one is planning on dying just yet) I am very thankful we are in a good position all round financially, but nevertheless I would like some advice as I feel uneasy about being bulldozed into this.
AIBU ? Is this good financial planning for IHT? Can it be reversed?
AINBU? Should I be wary and seek financial advice from a lawyer or accountant given I have not much pension of my own ?

I’d seek advice so you know where you stand. How do finances work currently? I’d basically pull back from any costs that support the family to build my own pension. Kids sports? He can pay. Food bills? I’ll pay 20%.

What would you do with his pension anyway? Surely pass it on to your kids?

It makes sense for him to leave it all to them

We’ve just agreed that DH should nominate our children as beneficiaries of his pension fund.
I don’t need it, I have my own pension fund though

It's possible he might not have the choice. When my husband died his Au "pension", i.e. Australian Superannuation asked me who were named and possible beneficiaries, such as me and children.

They then decided who should get what, in this case 100% went to me.

Well she might need it to live on given her pension is much lower.

Pensions are normally included as assets in the case of divorce, so maybe he's trying to reduce the assets he has to put into the pot to be divided.

His pension provider would want some valid explanation why you should not be a beneficiary. You can also be a potential beneficiary of a Discretionary Trust free of IHT provided he survives for 7 years.
I assume from what you have said that your rental property is still in your sole name. So tell him you are leaving it to the children and not to him, after all, he won't need it will he with his big corporate pension?

Pensions are not considered part of an estate for IHT purposes.

OP: in your shoes I would leave your property etc direct to your children in your will

That's exactly what I'm worried about as the marriage is not good. The tax situation could change for rental property and the rental property is a bit of a liability with some issues and a current large mortgage. It would make more sense to hand that over to the kids and they could live in it before selling it.
Women tend to live longer than men anyway . My father is in a care home costing the earth due to having Alzheimer's. That could happen to me and it costs a huge amount. I'd want to be well provided for in my old age having contributed to our finances throughout our marriage.

It does sound as though he's expecting your marriage to end soon. I'd be getting some legal advice, and quickly. If he's going to protect his pension from you, yet expect a share of your pension and your rental house, you're going to be stuffed.

The rules regarding division of assets on a divorce are different from passing of assets upon death. You will get more on a divorce. Sounds like you are also worried about a divorce?

If he is putting his pension in a trust, it could be out of your reach even in a divorce. Best to take legal advice on this.

I don't know the details but it is very unlikely that the trust is free of inheritance tax, as I understand it. In fact it is probably a chargeable lifetime transfer and anything he is saying about doing this for tax reasons sounds fishy to me. The main reasons for using trusts are about establishing control over the assets and who gets them as it is no longer a tax efficient way of making a transfer.

I don't know how things stand legally on this (your rights to the assets) in the event of a divorce. see a solicitor

Definitely worried about a divorce as partly down that route fairly recently. So both scarred from it . Due to his infidelity

In the words of MN, it looks like he's getting his ducks in a row, so you should too. Expert legal advice needed here.

Agree. OP you need to get a move on to protect yourself now!

This. You might end up asking for a divorce because once you've done that legally I don't think he can put his pension in a trust. He'd have to share pension with you whether he wants to or not.

Yeah, head down the divorce route and secure your future finances now. Then he can do what he wants with what is left of his pension but can't touch your share.

I’ll update this. If the legal advice sounds like he’s very likely protecting assets for a divorce you need to file asap rather than send him big neon warning signs that you’re about to. So perhaps the withdrawing funds from joint costs is a bad idea right now.

Use the money to live if she needs it.

No, it doesn't.

He's planning to divorce you. Sign nothing. Get legal advice fast.

Be prepared for divorce - do not agree that his pensions belong to the children - these have been built during your marriage and should be split with you,
In your situation I would get legal advice; the IHT story doesn’t add up and certainly doesn’t take your interests into account.

Agree, big flag that he wants to mess about with his pension pot, maybe making noises about putting it in trust but syphoning some off too. It is asset of the marriage and he may want 50% of your rental house. Ask a solicitor, if you think marriage is over, Sort the whole pot out and then you can leave all your remaining assets to your kids .

I'd divorce him now and go for half the pension pot and house. Seek urgent legal advice but do not tell him about this. Forget about him dying - get your hands on joint assets now.

She needs it to live on! Presumably its money he earned throughout the marriage.

I would divorce him to be honest. He doesn't care about you. He doesn't have your back. You would be much better off getting a divorce than him dying. You have shared assets and he's trying to give them away.

Op - as above he's getting his affairs in order ready to divorce. He is literally telling you he feels no financial obligation to provide for you. Tread v carefully. FWIW in my case my (high earning) ex of 25 yrs suddenly withdrew all funds from our joint acts and diverted his salary to an act in his name. I filed immediately as had sensed it was on the cards and had been preparing for it in the background, had legal advice, putting money aside etc. I got 50% of our joint pension pot amongst other things. That gives me huge security in retirement and means I have made our kids beneficiaries. Ex has an OW and it is a relief to know we are protected from any remarriage. I live on less these days and it's been tough but I'm more financially ok than I thought I would be. UC, council tax discount etc. kicked in when I needed them and CMS was more than I was expecting. Plus I have peace and you can't put money on that! Good luck.