Who is my beneficiary

debtfreein2007

Finally nearly have my finances sorted, thanks to lots of friendly help on these forums.

I recently got life assurance from Legal & General. It's all done and dusted but I've just been reading over the documents again and I've realised that nowhere on the form did it ask for the name of the beneficary.

Am I being dumb? Isn't that the point of this? Who is the beneficiary if I die? Thank you for your help.

johnk

My understanding is the payout goes into your estate, unless you put it in a trust, and will be distributed to taxman/your spouse/children based on IHT rules.

kingstreet

As johnk says, the benefit passes into your estate and is distributed according to your will, or to intestacy rules, whichever applies.

A policy should be written in trust to ensure;-

- the benefit is paid quickly without need for probate/administration
- it is paid outside your estate and avoids inheritance tax
- it is paid directly to those you want to receive it.

I take it you didn't write it in trust? Who advised you on the product?

dunstonh

Is the policy in joint names or single names? (either lives assured or owners)

i.e. you can have single owner, single life which would pay out to your estate if you died or joint owner, joint life 1st death, which would pay out to the surviving owner on 1st death.

you can also set it up as joint owner, single life or single owner, joint life or various other combinations to suit your requirements.

Trusts would divert the proceeds to a different beneficiary potentially and change any potential tax position.

debtfreein2007

kingstreet wrote: »

As johnk says, the benefit passes into your estate and is distributed according to your will, or to intestacy rules, whichever applies.

A policy should be written in trust to ensure;-

- the benefit is paid quickly without need for probate/administration
- it is paid outside your estate and avoids inheritance tax
- it is paid directly to those you want to receive it.

I take it you didn't write it in trust? Who advised you on the product?

No, I didn't write it in trust. I got the product from Cavendish. I guess I need to contact L & G now and see if it can be changed. I guess I also need to make a will - I've never done so before as I had nothing to leave behind at the time! Thanks for your help.

debtfreein2007

dunstonh wrote: »

Is the policy in joint names or single names? (either lives assured or owners)

i.e. you can have single owner, single life which would pay out to your estate if you died or joint owner, joint life 1st death, which would pay out to the surviving owner on 1st death.

It's a single name - I got the policy as I wanted to ensure a little financial stability for my partner and our child should something happen to me. (My partner already had life assurance through her workplace)

Annisele

debtfreein2007 wrote: »

It's a single name - I got the policy as I wanted to ensure a little financial stability for my partner and our child should something happen to me.

Are you married to your partner? If not, you really need to sort out a will; if you were to die tomorrow there's a good chance your assets would go to your child and not your partner.

kingstreet

debtfreein2007 wrote: »

No, I didn't write it in trust. I got the product from Cavendish. I guess I need to contact L & G now and see if it can be changed. I guess I also need to make a will - I've never done so before as I had nothing to leave behind at the time! Thanks for your help.

L&G should be able to provide you with a trust form to write the plan in trust now. You'll need two or three friends or relatives to act as trustees for you just in case the worst happens. They will be responsible for distributing the money from the trust to those you want to receive it.

As a general comment for future readers, buying cover without advice means a situation like this can lead to inheritance tax liabilities which are unnecessary. Saving a fiver a month to end up paying thousands in unnecessary tax strikes me as a false economy...

kingstreet

debtfreein2007 wrote: »

My partner already had life assurance through her workplace

Please make sure your partner has made an up to date "expression of wish" to ensure if she died, her benefit would be paid to the correct people. A death in service scheme is written under irrevocable trust. An expression of wish can't be made binding on the trustees due to the trust arrangement, but in practical terms the trustees will not ignore the request. The benefit is paid outside the estate and avoids inheritance tax.