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 ?

you need to see a lawyer and get things going on separating and sorting finances and divorcing. He is trying to sort the finances so you get nothing here as others have said IHT is a red herring. He can mark them as beneficiaries which is different, if you divorce they are still on the table in terms of assets of the marriage even if they are beneficiaries

Change your will to leave everything directly to your children.

Depending on when he passes and her finances she may need it to live. The right thing will be to pass it to her in case she needs it and the kids inherit from her not cut her out and pass it to the kids directly to spite your wife.

It’s not his decision alone to make, it’s family finances and she should engage outside counsel.

Does it make a difference if the reason for her smaller pension is because she took time off work to look after their kids? But you think it’s right he unilaterally makes the financial decisions now especially when their marriage is rocky?

The nominations under pension schemes are not challengable in the way you assume. It is only 'discretionary' because if it were legally binding, the pension lump sum would form part of the deceased's estate and subject to IHT

He should leave his pension to you, but in the unlikely event of him dying young and you not needing the money, you can do a deed of variation so that it goes directly to the children. That way, you have the flexibility to assess what is best at the time, depending on circumstances. If he died next year you might need it for raiding the children / paying the mortgage.

DB pensions are different.

You also cannot simply change beneficiaries of a trust and in particular, if the settlor is also a beneficiary the trust may be ineffective for whatever purpose it was set up.

Just echoing previous posters that pensions are exempt from IHT so his story makes absolutely no sense.

He's trying to protect his assets prior to divorce.

I'd get legal advice immediately and look to divorce if you have reason to believe he might do this behind your back. He may be 'lining his ducks up in a row' as everyone says on here.

But you are entitled to benefit from your combine assets as you were supposed to be a team in raising your DCs all these years. Your standard of living deserves to be equal to his, not lesser. And if he's looking out for himself only, then you need to protect yourself. And that may well mean divorce and securing your rightful percentage of the marital assets now.

And then you can plan what you need to do to move forward and add to your secure future.

THe ISA situation strongly suggest he's depleting his assets so he doesn't have to split them with you.

Don't be blindsided.

Most marriages are rocky! Maybe I am being naive but your husband may not have a sinister plan. If OP feels that DH's pension assets should be shared equally with her, then the same should apply to her rental property! Fair is fair?

Most marriages are not "rocky" and any change to savings are discussed and agreed between partners.

It seems like he is planning a future without you - he has had advice on how to minimize his assets in the event of a divorce.
Are there any other signs? New clothes/hairstyle/ staying out late "for work " / a new hobby which keeps him out on his own?

Take the advice offered here and get proper professional help, like he obviously has.

Most marriages really aren't rocky

Havnt read all thread. My advice is get legal advice on the quiet. We jave recently redone our wills and changed how we own the house so my half automatically goes on trust as does my works life insurance for my children. That way if my husband remarried she can't get her hand on my half of everything. Obviously I can't stop him being stupid and signing his lot away but at least I know my boys will get something.

It does sound as if he's maybe hiding finances. I'd definitly seek advice.

Found out that kids are already beneficiaries, which he hadn’t told me about. he’s talking about putting them in ‘an asset preservation trust ‘ to maximise pensions and minimise IHT. He is not thinking about cashing them in early. This info came via text as he is working in London. I have said I want to understand further and attend at any meetings with advisors .
Were we to divorce our main home and the rental would be divided equally along with any other assets so there would not be rental income as he’d need to live somewhere. I’d be left with no pension to speak of and he’d still have high level corporate earning power, LTIPS etc
no @Max28W I would say not. There are some things I can’t get over but my kids were a priority at that time

Speak to a solicitor before you start thinking you can't afford to leave.

If you stay, you have none of his pension that he built up while you were/are a married couple in a legal partnership. If you leave, you will have some of his pension.

You can negotiate regarding your house. A divorce will be all about negotiation.

I'm really sorry to read that @messiejessie Are your kids still a priority above your own wellbeing?
Do you have any friends who have been through divorce lately that can recommend a solicitor even for a chat?
It's clear your husband is not giving you the full story re: finances and you need to know where you stand.

I'm sorry 💐.

If you divorce him you could split his pension now I believe...

Yes, pension funds count as an asset.

Well, 40% end in divorce - and those are just the ones that end up on the rocks (rather than just being rocky) 🤷🏼‍♀️

If he does this then you could delay the divorce and ringfence your rental and your share of the house into a similar trust for the kids. Then he wouldn’t get anything either.

i’m not entirely sure OP can stop this happening simply by not agreeing to it. It is his personal pension and ultimately he gets to decide who he names as the beneficiaries. I would be extremely surprised if he needs his wife’s permission to decide not to name her. I have an occupational pension and when I was naming beneficiaries my DH was not involved in any part of that process and that is how it should be.

in the event of a divorce, the settlement may address the issue of his pension and a judgment may be made in relation to it, possibly to OP’s benefit. But, as it stands, I don’t think OP can block anything he chooses to do now.

I’d also caution that a spouse’s pension is not automatically shared 50/50 with a spouse. There are lots of factors that determine this, so I would definitely recommend legal advice if you are thinking of leaving him.

I assume that he just means that he will put the children as beneficiaries of his defined contribution pension. This means that it will pass to his children outside of his estate to his children free of iht. It’s not otherwise possible to put a pension in a trust. Obviously they will only get something if he hasn’t spent all of his pension fund.

naming children as beneficiaries of a pension is fairly common and not necessarily a red flag in itself. I have named my daughters as beneficiaries for mine.

No there is nothing anyone can do to force their spouse to name them or anyone else as their beneficiary of their pension on death.

When I divorced 20 years ago my ex was a SAHF - my pension became part of the divorce calculations. All assets including pensions are on the table. You can end up with pension sharing agreements which have to be administered at some cost by the pension fund