Deceased Father's pension - beneficiarys

indian_jalepeno

Hi all, thank you for any information that may be forthcoming from my situation. I would like to caveat this post stating that this is a money related estate question and I feel that my Father was incorrectly informed on how the benefits would be paid in the event of him passing away before his retirement date. I apologise if this is in the wrong section.



My father sadly passed away last week, a week before he was due to collect his previous employers pension and guaranteed lump sum. He had been suffering from ill-health for the past two years preventing him from working and led to myself supporting him financially. Having been through his paperwork there were numerous requests from the pension company (EPAL) asking my Father to complete the necessary paperwork prior to payment, (wishful consent, commutation options etc). My father never completed this paperwork and no Will was ever made for the following reasons:

The paperwork dated Aug 11 categorically stated in numerous sections that a lump sum would be paid to his estate in the event of his death before reaching retirement. Having informed the company of his passing and stating that I was his only son and hence immediate next of kin, they told me that the forms were incorrect and that his revised lump sum would now go to a beneficiary trust fund (Rule 22) and they would decide fairly on who receives the money. They stated that my father's pension had changed in 1988 and that this fund would prevent unneccessary Inheritance tax and possible estate fees etc. This is all contrary to the information provided.

This is not what my Father wanted. It is far too easy for me to say this but he wanted all of this to go to myself and my children only; hence no Will. He passed away believing it would all come to me, my family and nobody else. As there was no Will, it would all come down to the Intestate rules which has me then my children as sole beneficiaries - there wasn't a Spouse.


He has an estranged Brother who has had little or no contact with him over the past 30 or so years, other than attending their Mother's funeral. In fact, it would be fair to say that he did not like him one bit and the feelings are mutual.

I now have to declare his Brother on the beneficiary forms for them to decide who gets what. I feel that this is totally unfair, his hand was led into not making a Will because of this incorrect information and if any money went to his estranged Brother then it would be totally unjust.

Do I have to put his Brother's name down on the form as I am also concerned about falling foul of beneficiary deprivation. Would the company do a full search of family members or would they accept an additional letter stating all the above to pursuade them otherwise?



All I want to do is grieve for my Dad and do what my Dad wanted without any money issues, distant family feuds. Ultimately, what he believed to be correct before passing away.

Again, thank you for your time in reading this and any information that can help with this situation.

Goldenyears

You are rightly the sole beneficiary, assuming you have no siblings, but the pension provider doesn't know that yet, so yes you have to answer all their questions to the best of your knowledge. There should be no way under intestacy for your uncle to inherit anything.

If your father had made a will with you as executor, so much simpler in hindsight.

indian_jalepeno

Thank you for your reply. Does this mean then that they would not split the lump sum into four equal parts ( Me, 2 x children and 1 estranged brother ) and instead treat it as per Intestacy rules? Didn't think it was that simple and they would still award him an undeserved percentage??

Thanks again

sophieschoice

Because I haven't nominated anyone for my lump sum payment then mine will also go to the beneficiary trust fund. Which means nothing at all because my son will still inherit. It just slows the inheritance process down from what I can make out.

magpiecottage

The pension fund will almost certainly be held under a Trust arrangement. That means the death benefits were never part of the estate, do not count toward any inheritance tax calculation and are paid, legally, at the discretion of the trustees, who need have no regard to intestacy provisions (or any will, for that matter).

Normally they will ask for an "expression of wish" but although even then it need not be complied with. It is necessary for the trustees to still have discretion to overrule it in order to ensure no Inheritance Tax is due.

However, to overrule it the trustees would normally need to have a really good reason because they may have to justify themselves in court. This MIGHT occur if, for example, somebody decided to leave it all to the dogs' home and with the result that their children would be destitute (not that FIDO is likely to sue them!).

However, in this case, the most likely course of action would be to pass it to the immediate family of the deceased. If there is no spouse and only one child then passing it to that child is by far the easiest (and safest) course of action so based on what you have said I would be surprised if they did anything different unless you indicated that you wanted some or all of it to go to your children in your stead.

Goldenyears

indian_jalepeno wrote: »

Thank you for your reply. Does this mean then that they would not split the lump sum into four equal parts ( Me, 2 x children and 1 estranged brother ) and instead treat it as per Intestacy rules? Didn't think it was that simple and they would still award him an undeserved percentage??

No, the intestacy rules say the estate would split between you and your siblings if any. Since you don't have any siblings (do you ?) you are sole beneficary. Your children don't come into it. That's your affair. Only if your father had no children would his brother inherit.

indian_jalepeno

magpiecottage wrote: »

The pension fund will almost certainly be held under a Trust arrangement. That means the death benefits were never part of the estate, do not count toward any inheritance tax calculation and are paid, legally, at the discretion of the trustees, who need have no regard to intestacy provisions (or any will, for that matter).

Normally they will ask for an "expression of wish" but although even then it need not be complied with. It is necessary for the trustees to still have discretion to overrule it in order to ensure no Inheritance Tax is due.

However, to overrule it the trustees would normally need to have a really good reason because they may have to justify themselves in court. This MIGHT occur if, for example, somebody decided to leave it all to the dogs' home and with the result that their children would be destitute (not that FIDO is likely to sue them!).

However, in this case, the most likely course of action would be to pass it to the immediate family of the deceased. If there is no spouse and only one child then passing it to that child is by far the easiest (and safest) course of action so based on what you have said I would be surprised if they did anything different unless you indicated that you wanted some or all of it to go to your children in your stead.

I'm loathed to put his brother down on the beneficiary list which they are asking for, but I don't want all of this to look bad on my part and indicate that I am potentially preventing someone to a deserved payment. Do I have to include his details? I am essentially concerned for my childrens potential future education fees in all of this TBH - again something which my Dad said all would be covered.

Pollycat

indian_jalepeno wrote: »

I'm loathed to put his brother down on the beneficiary list which they are asking for, but I don't want all of this to look bad on my part and indicate that I am potentially preventing someone to a deserved payment. Do I have to include his details? I am essentially concerned for my childrens potential future education fees in all of this TBH - again something which my Dad said all would be covered.

Sorry for your loss, it's a hard time and as you say, not the time for worrying over financial issues.

From what you say they are specifically asking for details of your Dad's siblings (brothers and sisters).

Imho you would be very silly not to complete the form honestly and put your Uncle down on the form.

You have had reassurance from other posters - I can't see your problem with completing the form honestly.

We're talking about pension trustees here - I doubt they're going to award half your Dad's money to someone he was estranged from AND is not even the next-of-kin.

molerat

Firstly, sorry for your loss.

If your late father had truly not wanted his brother to receive anything on his passing he could have written a will and made an expression of wish to his pension provider. He failed to do either and so what is done (or not done) is done and there is nothing you can do to change this. As has been said it is highly unlikely that the brother will receive anything unless he can prove that he was financially dependant on your father but the trustees have the option to make a payment if they deem fit. By not answering their questions truthfully you are opening yourself up to questions as to your motives, accusations of greed and fuelling any bad feeling within the family. Answer their questions truthfully and you can sleep with a clear conscience.

The fact that the money will pass into a trust outside of the estate also means that it is not avaiable to any possible creditor to pay off debts.

magpiecottage

Although, as I have noted, the intestacy rules do not apply, the trustees will be aware of the fact that, in the circumstances you describe, you will inherit the entire estate (but not any debts!) in due course.

If I were you, I would complete the form with you and your children as potential beneficiaries and send a covering letter explaining that you also have an estranged uncle but you have not included him as you believe that you family are the correct beneficiaries all the while your line survives.

indian_jalepeno

molerat wrote: »

Firstly, sorry for your loss.

If your late father had truly not wanted his brother to receive anything on his passing he could have written a will and made an expression of wish to his pension provider. He failed to do either and so what is done (or not done) is done and there is nothing you can do to change this. As has been said it is highly unlikely that the brother will receive anything unless he can prove that he was financially dependant on your father but the trustees have the option to make a payment if they deem fit. By not answering their questions truthfully you are opening yourself up to questions as to your motives, accusations of greed and fuelling any bad feeling within the family. Answer their questions truthfully and you can sleep with a clear conscience.

The fact that the money will pass into a trust outside of the estate also means that it is not avaiable to any possible creditor to pay off debts.

Yes, it would've been much easier if he'd don either a Will or an Expression of Wish form (which was sitting on his coffee table - unsigned unfortunately).

But I believe he didn't do any of this as to what was mentioned by the company about a lump sum going directly to his Estate. This is hard for me to accept. Banks and Financial companies are being fined left, right and centre for not accurately informing people which could lead to them making mis-informed decisions. Would there be any recourse on them?? It all sounds like I am after a fight, far from it. I just want what my Dad wanted.

Thank you all for your replies, I will fill out the form accurately with some additional information about his brother.