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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

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

162 replies

messiejessie · 03/06/2024 23:43

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 ?

OP posts:
Rubbishconfession · 04/06/2024 06:11

I agree with pp, do not agree to this. You will need his pension.

How long have you been married ?

Rubbishconfession · 04/06/2024 06:12

momentumneeded · 04/06/2024 06:09

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.

Glad you got 50% of the joint pension.

How did he react?

Westfacing · 04/06/2024 06:33

I've written about this before. Many years ago a school mum friend had a rocky marriage, they were 40s and children primary age. Wealthy corporate husband was coming up with such ideas about pension in trust for children etc.

She found out by chance when a letter was inadvertently sent to her that he was planning on divorce, but for a few years down the line. He'd also bought a property with a family member and generally squirrelling away assets.

She saw a solicitor and the advice was if he wants a divorce he can have it now, not in a few years time. They divorced soon after.

Jenepeuxpasdiscuteravecdesstupides · 04/06/2024 06:37

Fizzadora · 04/06/2024 00:01

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?

No, they would not. They don't give a toss who you nominated person is

Smidge001 · 04/06/2024 06:37

I'm sure pensions don't attract IHT. (Another poster has also said this). Therefore putting them into a trust for the kids in order to avoid IHT is nonsense. So I'm pretty sure he's suggesting it instead to somehow avoid you getting a share on divorce instead.

Definitely get legal advice. From perspective of divorce much more so than re death.

Noras · 04/06/2024 06:46

Are they any assets other than the pension eg significant isa’s, VCT, other rentals or onshore or offshore bonds? If there are other significant assets eg any of those then leaving pension to kids makes sound sense as you have no IHT to pay in theory.

WinchSparkle80 · 04/06/2024 06:53

He doesn’t need permission though or the OP to sign off on it does he? (not 100%) but in my pensions I can change the beneficiary whenever I want. No one is notified except my employer and pension company.

maddening · 04/06/2024 06:57

If the marriage is rocky I wonder if it is a move to protect it from a divorce?

Velvian · 04/06/2024 06:57

@messiejessie I would divorce and sort ut out now, you would be entitled to a share of his pension.

maddening · 04/06/2024 06:59

You could test it by suggesting you do the same with your pension and rental property

FairyMaclary · 04/06/2024 07:51

I wouldn’t say a word but I would seek advice from a divorce lawyer who specialises in this area. I’m pretty sure he has sought legal advice and is way ahead of you. He has realised how vulnerable he is and is scrabbling around to protect his assets.

If he cheated the old marriage is over anyway. Most cheaters don’t have the character traits required for reconciliation.

Why are you still in the marriage? What was your reason for trying to reconcile?

PashaMinaMio · 04/06/2024 07:57

BoudiccaOfSuburbia · 04/06/2024 00:03

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

This is what I would do!

Leave your estate to your kids. Skip over him.
No need to even tell him. Go make a will quietly and without input from him.

Wills can be changed at a later date if you change your mind. They’re not irrevocable.

Leave whatever you’ve got in a discretionary trust if you’re concerned about kids inheriting too soon/young age.

Id be really hacked off with his thinking.

Original poster
messiejessie · 04/06/2024 07:58

We have been married 22 years

OP posts:
ssd · 04/06/2024 07:59

I think you need professional advice op

Original poster
messiejessie · 04/06/2024 08:01

Rubbishconfession · 04/06/2024 06:11

I agree with pp, do not agree to this. You will need his pension.

How long have you been married ?

22 years

OP posts:
BusyMummy001 · 04/06/2024 08:09

I’d seek advice as to exactly how much you personally have in assets and income - and if you feel he is deliberately trying to bypass you, then do the same back - out your rental property and other assets into trust for the kids to inherit upon your death but with the life time benefit for you. Then he can’t access them either. Sauce for the goose etc

However, it probably DOES make good IHT planning and if he’s already paid income tax on the monies going in (my DH pays a fricking fortune on his salary and then on his pension contributions every year) I can also understand why he’d not want the taxman to get another chunk. But my DH is also looking forward to an active retirement with travel etc, so wouldn’t want to deny himself access. There’s a balance to be achieved. Perhaps the compromise is to put one or two if them into trust, but ensure you both have the benefit of at least one so that you can ‘enjoy’ his retirement?

catmothertes1 · 04/06/2024 08:09

cannonballz · 03/06/2024 23:45

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

Do most people not need their pensions to live on when retired?

Flopsythebunny · 04/06/2024 08:10

You need urgent legal advice, start the divorce and get a court order to stop him diverting marital assets

DuckEggy · 04/06/2024 08:15

I'm afraid I have no idea about the IHT issue, but what a bastard.

LaurieFairyCake · 04/06/2024 08:15

Get divorced, take half the money Flowers

PropertyManager · 04/06/2024 08:24

Smidge001 · 04/06/2024 06:37

I'm sure pensions don't attract IHT. (Another poster has also said this). Therefore putting them into a trust for the kids in order to avoid IHT is nonsense. So I'm pretty sure he's suggesting it instead to somehow avoid you getting a share on divorce instead.

Definitely get legal advice. From perspective of divorce much more so than re death.

Depends on the pension arrangements, normally there is no IHT on pensions, but some plans that pay off a guaranteed death benefit are added to the estate value, unless that benefit goes into a trust, in which case it doesn't.

As we are presumable talking big ticket, complex corporate pensions then could well attract IHT.

AllThePotatoesAreSinging · 04/06/2024 08:25

messiejessie · 03/06/2024 23:43

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 ?

Sounds like he’s trying to prevent you accessing joint assets if you split …

GabriellaMontez · 04/06/2024 08:31

Can you ask him who advised this?

Have you pointed out that your pension is much lower, you might struggle. How did he respond?

It does sound like he could have checked out.

MILTOBE · 04/06/2024 08:41

I'm wondering whether he's aiming for parental alienation, OP. He can promise the kids all his money and then when you say that's not fair, some children would turn against you.

Honestly, I'd get out of this marriage asap to protect yourself financially. This man could cause tremendous problems in your family.

MyrtlethePurpleTurtle · 04/06/2024 08:43

Fizzadora · 04/06/2024 00:01

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?

Why would a pension provider want that explanation? For a standard work pension - money purchase, not final salary - you can leave it whoever you want. Mine goes to nephews and godchildren and if they predecease me, to a nominated charity

Edited to say that you can take out from your pension in cash from aged 55 (taxable after the first 25%)

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