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 ?

It's her money too, he earned it while they were narried. And she might need it to live on.

I agree with others. Seek urgent legal advice. Sounds like he is 'getting his ducks in a row' so that he he has less 'assets' to be thrown into the joint finances if/when you divorce.

If he were to die you would get the house. So you would have a roof over your head, your own income and your own rental house payments. What more do you need?
Do the kids own their own properties? Doubt it looking at your ages. This money would help them get security.

Well it's definitely not the best thing for the OP.

Agreed with all of the posters that this has the smell of planning for a divorce rather than estate planning. You mention that your kids are at school and uni - when is the youngest due to turn 18/leave home? In my experience that's a classic window for a split and he may well be prepping in advance of that.

Either way, I would seek legal advice from a divorce lawyer so you know where you stand and what you can be doing now to protect your interests.

So would you be happy if your husband gave his pension to your children, completely bypassing you? Don't forget that pension money came out of joint marital assets - it doesn't just belong to him.

I have done this for my kids as it avoids inheritance tax. DH will have a good pension regardless and we have no plans for divorce!! My financial advisor suggested it as the most tax efficient way to plan for the future. I had my kids late (37 and 41) so it might well be a real boost for them in the future. I’m going to inherit precisely FA so I want to provide better for my own kids.

DH is fully on board with it. He and I both agree 💯 that kids are the number one priority although obviously not at the expensive of each other being ok!

Well yes. I don't need the money but the kids would. Why would I want to top up my (comfortable) bank balance while living in a mortgage free house while they are still renting?

Most pension plans are set up as trusts already. Any dependant would have a claim against it and the trustees have a legal duty to act in the best interests of potential financial dependants.

This may not always have been obvious even to them but I work in that area and they are now much more on the ball. They will usually ask to see the will even if a pension is outside the estate/will.

This is due to the fact that some nominations on pension schemes can be 20/30 years out of date and very clearly no longer reflect a holder’s wishes.

Pensions are a very good tool for generational wealth transfer and I wouldn’t immediacy jump to divorce conclusions. It really depends on your circumstances.

Seek advice. Your children may not support you because of their circumstances even if there is zero bad blood between you.

You need a good divorce lawyer.

I would also update your will asap so that all your assets go to your kids, just in case you were to go under a bus tomorrow.

He only needs to write an Expression of Wishes, but this is not legally binding and can be overturned by the Trustees. I can assure you, he can leave it to whom he wants, but it may not happen. It sounds like you would be successful in challenging this in the event of his death.

Whether you would be better taking half his pension via a divorce is another matter...

I’d be concerned he’s starting to remove assets so that he can screw you hard in a divorce. If your kids are leaving home, he might have been waiting for the opportunity.

@messiejessie

My father is in a care home costing the earth due to having Alzheimer's

Perhaps he doesn't want his pension fund money to be lost to pay for your father's care home when your father's money runs out if you find yourself having to pay for it yourself (Out of your inheritance if your husband dies before you).

I think there's a lot of benefit in passing assets down to the next generation (and grandchildren) rather than to the spouse as it safeguards money being spent on care homes and also prevents the money going to the spouse's new husband/wife if they remarry.

Divorce him ASAP before he can remove support from you in this way.

Legally is he allowed to nominate children to inherit his pension if the OP started divorce proceedings? Would it be seen as trying to hide funds?

You haven't actually left it to them and the pension trustees can override you. You have made an expression of wish. It will be taken into account and generally followed, but that does become less likely the longer ago the expression was registered. Especially if you later get into a ling term relationship, marriage, kids, step kids etc. Anyone who says they are dependent on you can stake a claim for the pension trustees to review, although that doesn't mean it will be accepted. Regularly updating to keep your expression of wish current is a good idea. I have worked in pensions and it can get messy when people remarry, have an additional child, promise it verbally to someone etc and forget to update.

A lot of financial experts think that labour may change the rules around pension funds and inheritance tax when they get in. The 25% tax free amount may be under threat too. They need more money and they have ruled out other taxes.

Just quiet as a mouse see a solicitor in the next town over and protect your own assets as well as protecting your right to joint assets (and I'm sure you will have facilitated his ability to amass that pension fund).
Seems to me he's working himself to a position where everything he has is his whilst everything you have is half his too. Do not let this happen.

And if looking after that man and bringing up his children and hosting his dinner parties and allowing him the wherewithal to amass that pension has adversely affected your own career and finances? Bugger that.

I know someone who needed to do this. The advice was to get hold of it asap if divorce is going to happen....the explanation was that there might be more in the pot if she took it at retirement age but it can't be ringfenced and any subsequent wives who divorced the pension holder would also be entitled to a share.

Current divorce law disagrees with you.

This.

My guess would be that he is trying to stop you getting any of his pension when he divorces you. Though its odd if he is warning you of this in advance.

Er, current law maybe!