Expression of Wish

Hamstar

I understand there is merit in writing to one's pension company saying that on death, I wish the pension benefit to be paid to my daughter. In this way, the pension benefit lump sum can be paid outside of the settlor's estate and therefore not liable to Inheritance tax. This approach has been accepted with my pension companies except one. That one would not accept a trust deed or an expression of wish because "The Society does not have any discretion over the disbursement of the death benefits as they form part of your estate and we must therefore make payment to your personal representatives".

This seems crazy. Are they just being difficult? The policy is an old style retirement annuity policy. Should I transfer the policy to another, more enlightened company?

dunstonh

That one would not accept a trust deed or an expression of wish because "The Society does not have any discretion over the disbursement of the death benefits as they form part of your estate and we must therefore make payment to your personal representatives".

There are some certain non-standard types of pensions that this may apply to. Unusual but they do exist.

Should I transfer the policy to another, more enlightened company?

It is nothing to do with the company. It is to do with the contract. Chances are that non-standard plans have other benefits which make up for that. Guaranteed minimum pensions, guaranteed annuity rates, guaranteed minimum maturity values, higher than 25% tax free cash etc. So, transferring it just because of death benefits without knowing what else you are giving up is not a good idea. However, if none of those other things apply and it makes good financial sense, then its fine.

Hamstar

Thanks Dunstonh.
The company is Equitable Life and unfortunately any 'added value' has been stripped out of their products!