Help please re Pension Benefactors??

fleetwood1

Hi, my mother in law has recently informed my wife that her late father in law's pension company has contacted her and that he has a payout due, as he would have been 65 in Oct. They were divorced and she re married but she "claims" that she is the benefactor however needs my wife and her brother to sign and produce a variety of documents, marriage cert etc to the company.

My wife was the next of kin after death etc, and also paid bills off as father did not have an estate or money or made a will.
My wife wants to look into this further and that has caused arguments, and she simply wanted a 3 way split so whilst I have not read the letter in detail, I am trying to determine whether my wife has a legal right to this policy as next of kin in any way, and also why she is being asked to sign and produce these documents??

dunstonh

but she "claims" that she is the benefactor however needs my wife and her brother to sign and produce a variety of documents, marriage cert etc to the company.

That isn't necessarily how pensions work. Was it a money purchase scheme or a defined benefit scheme?

I am trying to determine whether my wife has a legal right to this policy

Depends on the type of scheme. Either it is defined in the scheme rules or it is up to the discretion of the trustees.

fleetwood1

Hi thanks for reply. We know very little about the policy, apart from he did not receive nayhting from it monthly or otherwise, and he paid into it up until he stopped working albeit that was several years ago. I dont htink it was a defined scheme, simply as we have been told a variety of figures for the potential payout.

dunstonh

Is an insurance company involved or is it going through pension scheme administrators? (that will help as narrow it down on whether it is money purchase or defined benefit).

If it is money purchase and the pension has not commenced, then the full fund value of non-protected rights is paid out based on his expression of wish but the final decision is made by the trustees. This is because the expression of wish may become out of date.

In this case, as your mother in law was divorced and had re-married, the trustees may take the view that the link has moved away and that the children may be the more appropriate destination for the money.

The forms are probably to ascertain the information to allow the trustees to decide. It does no harm at all to mention that there was no estate and your wife paid off debts (although she didnt have to as debts die with you if there is no value in the estate). Without us seeing the forms or knowing what they say, we cannot really comment.

fleetwood1

Blimey what a minefield!! I will do some more digging, and may call upon your advice again, once again thanks.

jamesd

Yes, it can be a mindfield. And your specific case may be because it's unclear who should get the money after divorce unless there was some specific provision in the divorce settlement, as there may have been.

It's something for fact gathering rather than arguing at the moment because not enough of the facts are known.

Your wife should:

1. Ensure that the pension provider knows of the divorce and ask them to consider who should receive the money if they have discretion. She should be explicit in telling them that she does want some payment to be made to her.
2. Get a copy of any expression of wish forms that her father gave the pension company.
3. Get a copy of what any divorce agreement said about how the pension should be handled. It's possible that the arrangement was that he'd get the whole pension (and hence your wife and her brother would get it) in exchange for your mother in law getting the house, a very common arrangement.
4. Get a copy of her father's will if she doesn't already have one.

Be very careful about signing any documents, lest one be a form that says she is agreeing that she is not entitled to and doesn't want a payment.

Divorce and remarriage greatly weakens the position of your mother in law because if she has no income it's her new husband who would generally be expected to provide for her.

It's entirely possible that the proper answer is a 50-50 split between the biological children of your wife's father with no payment at all to his ex wife.