pension problem (early death)

sharewatcher

Hi
Pensions are a minefield for me,I do not understand them at all. so I hope you will bear with me and forgive me not giving any relevent information.


Heres the problem my Brother in law died a week ago aged only 49 he was divorced with 3 kids, the pension was not an issue in divorce proceedings,(he kept it all)
He worked in the building industry and his employer paid all premiums he was entitled to a lump sum on death, but what happens to the his pension?
I would assume that his kids will get a lump sum in lieu,
Thanks for any replies and advice, it is appreciated

Pal

Depends on the rules of the Scheme. Some schemes will pay out children's pensions if they are below a certain age and/or still in full time education. If your brother had a partner she might be entitled to a pension.

Others will pay out the value of the fund plus the lump sum amount that has been insured.
Best thing to do is phone the company or the pension provider and ask them.

dunstonh

If it is the B&CE pension scheme, then its best to contact them directly and ask. Their pension versions over the years were non-standard. Indeed, for many years it wasnt clear if their pension was an FSAVC or a personal pension and it took the inland revenue a long time to decide as well. They operated holiday pay schemes, FSAVCs and stakeholder pensions amongst other things. So we cannot really answer you specifically if it is with them.

sharewatcher

Yes it is with the B&CE, and as far as I can make out it's a scheme called "Template" and from what I remember him telling me he had so many "units" I have checked their website and have found the value of these units, so all I should do do is multiply the units by their current value to get an approximation of the pension value--correct????

Sorry Dunstonh, "FSAVCs"??--- Just checked --Free standing additional voluntary contributions

Thanks once again for your help

george_2

sharewatcher wrote:

Hi
Pensions are a minefield for me,I do not understand them at all. so I hope you will bear with me and forgive me not giving any relevent information.


Heres the problem my Brother in law died a week ago aged only 49 he was divorced with 3 kids, the pension was not an issue in divorce proceedings,(he kept it all)
He worked in the building industry and his employer paid all premiums he was entitled to a lump sum on death, but what happens to the his pension?
I would assume that his kids will get a lump sum in lieu,
Thanks for any replies and advice, it is appreciated

It will fall into his estate then if his ex wife has no claim on it. So the beneficiary of the will should receive the pension proceeds, whether that be a lump sum or a pension paid.

Childs pensions in some cases will only be paid if the member of the scheme dies and the spouse subsequently dies also, normally set so long as the children are either below 18 or in FT education. Again you will have to check the terms of the pension

sharewatcher

Thanks George
No will I am afraid, The kids are 19, 18, 12, I have given them the advice I received on this forum and told them to call the company,
Hopefully with the payout they will be able to buy their home, and at least be secure for the next few years, with support from the extended family

Debt_Free_Chick

The payment should NOT go to his estate. It should be paid out by the Trustees directly to "beneficiaries". This would certainly include his children but might also include his ex-wife, if he was paying her maintenance (as she would be a dependant and they are usually classed as a beneficiary - depends on the rules of the scheme).

Payment for the 12 y.o. might go to the ex-wife, as the child's mother, to be used "for the benefit of the child". In other words, although the money is paid to the mother it is for her to use for the 12 y.o.'s benefit. Or the trustees might set up a trust (groan) for the 12 y.o.

The trustees decide which beneficiaries get a share of the lump sum on tax, looking at the circumstances of all of them. It's called a "discretion" and it's this which enables the payment to go direct to the beneficiaries, avoiding the estate and therefore not assessable to IHT.

HTH

montycat_2

Hi,
My husband died at 41 and his pensions had to be reviewed by the Thrustees.I had to provide birth certificates for all the children and myself .
The trustees decided that as my kids were all under 16 ,I would need to purchase an anniuty with the funds .I m currently doing this but as I am only 41,it has to run for many years so,the income is reduced .However ,it is an income for my kids .
As there was no will,you will probably have to go to Probate .
Ring the company to find out the options .
Sorry for your loss.

margaretclare

sharewatcher wrote:

No will I am afraid, The kids are 19, 18, 12, I have given them the advice I received on this forum and told them to call the company.

Doesn't this show up with blinding clarity, the folly of not making a will, especially when you have children growing up. This poor bloke was in the prime of life, not expecting to die obviously, but wouldn't the existence of a valid will have saved all this hassle and heartache which is not needed on top of the shock and heartache his family is inevitably going through.

Please, everybody, don't delay any longer - make a will!

Margaret Clare

Debt_Free_Chick

In addition to making a will, complete an Expression of Wish form for all your pensions. Any lump sum paid out on death does not form part of your estate so is not covered by your will. You need a separate form (Expression of Wish Form) for pension lump sums - contact the pension scheme administrators and they will know exactly what you're talking about.

Remember to change the Form (complete a new one) when your circumstances change.

Completing the Form simply helps the Trustees to decide who to pay the money to. If you don't complete a form, they have to do a lot more investigation into your personal circumstances - difficult for your family to deal with, immediately after your death.

HTH

sharewatcher

Thank you for the condolences, did not even think of Trustees, (does this cost)???
He was the person looking after the children,and holding down a full time job, I agree totally with the "make a will now" post as he worked the Friday,got up on the Monday to go to work, lay back down for 10 mins and passed away, It was found at the autopsy he had an undiagnosed heart problem.

Lesson learned