Pension Lump Sums

SoapDistant

Hi,

I am a member of 2 pension schemes and I'm trying to find out if the lump sum paid out in the event of my death forms part of my Estate or will it go straight to my Nominee (in my case it is my Mother) with no strings attached?

Will my Mother be responsible in any way for my debts, will the pension money be hers and hers alone?

Also, how would my Estate be divided, I'm hoping it's something along the lines of:

Funeral costs,
Debts,
Anything left over to my next of kin.

Thanks in advance.

yelf

pensions are held under trust - so the death payouts would not form part of your estate and so would be wholly tax free. They would most likely go to the nominated beneficary, although it isnt 100% guaranteed as it is only a nomination.

If you dont have a will then your estate will be divided according to the rules of intestacy. As with inheriting money, estates also inherit debt!

SoapDistant

Thanks,

I know it seemed obvious, but I just wanted to make sure.

I'm a bit unclear about nominees though, under what circumstances would the nominee *not* receive the money? Who would the money be paid to otherwise? Or are you saying that it would be with held?

dunstonh

under what circumstances would the nominee *not* receive the money?

example. Nominated beneficiary is the mistress but there is a wife with children. Trustees could overrule on that basis.

The money will still be paid out but the trustee has the final say on who gets it. The vast majority go where intended. Its only vindictive or inappropriate nominations which will get overruled.

SoapDistant

I see, thank you very much.