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Pension and will - inheritance question

19 replies

WilderPink · 13/12/2021 16:11

This is maybe a bit of an odd question and I wasn't sure where to put it, hopefully this is the right place.

I'm trying to work out if my relative named me in his pension when taking it out and that is why it was passed to me when he died, or is it because I was named in his will as beneficiary? Or is there no way of knowing?

The information about the pension came directly from his employer rather than the solicitor dealing with his estate and was completely unexpected by me. I didn't think to ask the solicitor at the time.

There was some upset over his will and it would help settle things in my mind to know if decided to do this prior to his illness but I can't find a definitive answer anywhere.

OP posts:
DraigFach · 13/12/2021 16:46

I'm sorry for your loss.

Pensions do not make up someone's general estate on death, the executor doesn't get to see that detail unless it affects them directly.

Payment of monies from a pension fund is at the discretion of the pension trustees rather than the executor of the will. This is normally done via an expression of wish form so has to be decided in advance.

If you want to know when the expression of wish was lodged with the pension fund they may be able to divulge this information as a recipient of the funds...I don't think the deceased are covered by GDPR so in theory possible. That could at least give you reassurance as to the timing of the decision to award you the pension money.

Alwayscheerful · 13/12/2021 19:52

Yes I agree with PP .
Pension is outside of the deceased estate for inheritance tax purposes.
Each time I set up a new pension I am asked to nominate beneficiary/s. You could Ask the employer or the pension company but you might well have have been named when the pension began or a new job started.

WilderPink · 14/12/2021 11:25

Thank you both for your replies.

It was a few years ago now so I doubt that I'll have much luck with his employer but I may try that.

Another thing I wondered if it might be the case he didn't name anyone when taking out his pension as he was young with no long term partner, so it may just have defaulted to being split between me and the other person named in his will (all siblings)?

OP posts:
DraigFach · 14/12/2021 14:53

Another thing I wondered if it might be the case he didn't name anyone when taking out his pension as he was young with no long term partner, so it may just have defaulted to being split between me and the other person named in his will (all siblings)?

Honestly, the trustees don't make any special effort to pay out from the pension fund it's better for the pension fund if there's no one to pay out to!. If an expression of wish form isn't completed and there's no spouse/children there's zero obligation for them to search for next of kin to pay out to...the idea of pension redistribution is that is supports people financially dependent on the person who paid in. You must have been named on the expression of wish form for the company to get in touch.

WilderPink · 14/12/2021 16:35

Thanks again @DraigFach that's good to know. This has been rattling around my head for over 3 years, I'm glad I asked.

OP posts:
sickandtiredzzz · 14/12/2021 21:25

What @DraigFach said is wrong. Trustees are responsible for the proper running of the scheme, including paying benefits when they become due. They are required to act in the best interests of the scheme beneficiaries (this includes members and their next of kin/beneficiaries). They cannot just sit back and keep the funds because they can't be bothered to find a members beneficiary.

Depending on the type of scheme will depend how the benefits are paid out.

If it's a final salary scheme the rules will determine who is paid out. The rules will state financial dependents or legal spouses can receive a regular pension payment. There may also be a pension paid to children under the age of 23.

If there are no financial dependents or legal spouses there may be a one off lump sum paid. (Usually when the pension hasn't been in payment to the member or if it was paid for less than a specified number of years).

For regular pension payments there doesn't have to be a nomination, but there may have been a nomination for the lump sum payment.

If it is a pot of money type pension then the funds need to be paid out to someone, regardless of financial dependency (what I mean is you don't need to be financially dependent on the member to receive some or all of the pot). But if there is someone who is/was financially dependent on the member then they may be first in line for the pot to be paid to them.

Generally the scheme will start by looking at any nominations the member has made. Although they don't need to pay out to the nominees, they will generally try to follow the wishes. For example, if someone nominated their partner from years ago and has subsequently married someone else but forgot to change nomination then they may disregard the named beneficiary.

If there has been no nominations then they will look at who is next of kin, or who informed the scheme of the members death. There is usually someone they are in contact with to pay any funds due. For example,the scheme may ask the person who informed them of the members death if the member was married, had any children, living parents and or siblings. They will use this information to decide who to pay the funds to (they may ask this even if they had a nomination form).

There are of course rare occasions where there is absolutely no one (very rare) but in most cases there is someone to pay the funds to. The scheme is required to make an effort to find a beneficiary to pay funds to. They cannot just keep the funds for themselves.

Although the scheme does not have to follow what the Will states, they may use this to help decide who to pay out to (although most of the time they don't even look at the will)

The most common time for someone to make a nomination is when they first join the scheme, but they can amend their nomination at any stage.

So, this information probably hasn't given you any definite answers but could narrow it down if you think about the type of scheme they were a member of, what sort of payment you are getting/got (regular payments or a lump sum), if your relative would be likely to update nominations (some people just forget about pensions) and how you were related to them.

You can ask the scheme for copies of the members record which should include a nomination form if there was one (I'm not sure if they can tell you this but you can ask). You can also ask the scheme how they decided who the funds should be paid to.

I hope this helps.

Polkadotties · 14/12/2021 23:29

@DraigFach

Another thing I wondered if it might be the case he didn't name anyone when taking out his pension as he was young with no long term partner, so it may just have defaulted to being split between me and the other person named in his will (all siblings)?

Honestly, the trustees don't make any special effort to pay out from the pension fund it's better for the pension fund if there's no one to pay out to!. If an expression of wish form isn't completed and there's no spouse/children there's zero obligation for them to search for next of kin to pay out to...the idea of pension redistribution is that is supports people financially dependent on the person who paid in. You must have been named on the expression of wish form for the company to get in touch.

This is so incorrect
WilderPink · 16/12/2021 15:35

So maybe I'm back to square one.

I think from what you've said @sickandtiredzzz there's no real definitive way of knowing this unless I speak to the pension scheme, and since it was over 3 years ago now that might be difficult.

I don't know what kind of pension it was, but he was only in his late 20s and in fairly low paid job, so I doubt it was final salary. He had no children and was single (never married). Me and my brother were the only beneficiaries of the will, and it was our brother that died, so I guess it would go to either us or my parents if no one was named.

As far as I'm aware there's no lingering bad feeling over this, it's just something I wonder about.

Thanks again for your help.

OP posts:
sickandtiredzzz · 16/12/2021 16:06

Final salary schemes can still be open to low paid workers but from what you said I don't think it matters the type of scheme.

Are your parents still alive? If so, they would have most likely received the payment had there been no nomination.

You can contact the scheme to ask but in all honesty I don't think they will release the information to you.

I'm sorry for your loss and it must be frustrating getting no definitive answers but I hope you find some peace Thanks

CorrBlimeyGG · 16/12/2021 16:11

Did you receive a lump sum, or is it a continuous payment? Were you in any way dependent on your brother?

JamMakingWannaBe · 16/12/2021 21:23

Sorry for your loss.

Before I met and married my DH, I named my two sisters as beneficiaries to my work pension.

I did not have a will as I had no notable assets at the time (renting, no car etc).

I really do think your brother would have nominated you.

I hope you can find the closure you seek.

Polkadotties · 16/12/2021 21:27

Definitely contact the scheme, they will be able to help you. 3 years is nothing in pension admin time :)

sickandtiredzzz · 16/12/2021 22:57

@Polkadotties they may still have the records but due to GDPR it is very unlikely they will tell her what she wants to know.

Polkadotties · 17/12/2021 14:00

[quote sickandtiredzzz]@Polkadotties they may still have the records but due to GDPR it is very unlikely they will tell her what she wants to know. [/quote]
GDPR doesn’t cover dead people.
OP I work for a pension fund.

Haus1234 · 17/12/2021 14:05

I would think the trustees default would be to pay out to parents rather than siblings if he was unmarried and had no children, so the most likely option is he named you as the beneficiary when he filled in forms when he started the job.

ajandjjmum · 17/12/2021 14:16

@WilderPink

So maybe I'm back to square one.

I think from what you've said @sickandtiredzzz there's no real definitive way of knowing this unless I speak to the pension scheme, and since it was over 3 years ago now that might be difficult.

I don't know what kind of pension it was, but he was only in his late 20s and in fairly low paid job, so I doubt it was final salary. He had no children and was single (never married). Me and my brother were the only beneficiaries of the will, and it was our brother that died, so I guess it would go to either us or my parents if no one was named.

As far as I'm aware there's no lingering bad feeling over this, it's just something I wonder about.

Thanks again for your help.

My DC are both single, and have named each other as beneficiaries in their life assurance and pension policies.
Rainbowshit · 17/12/2021 14:31

Surely this will be a death in service benefit rather than pension?

Also think it seems likely he named you as otherwise trustees would have been more likely to pay to parents over siblings.

sickandtiredzzz · 17/12/2021 15:59

@Polkadotties true, but it covers other beneficiaries who may be named on the nomination form.

Polkadotties · 17/12/2021 16:07

The scheme will be able to confirm if OP was named.

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