Father Passing Away - Advice on his Pensions

Yoplumpy

Hi All

My Father passed 2 months ago (abroad so it's been a bit of a nightmare getting things sorted). He was divorced from my Mother and had not re-married.

He had just turned 65 (by 2 months) and so had just started claiming his RAF services pension.

He had completed a will - and I remember receiving a document a few years ago - which I think was an Expression of Interest relating to myself and my sister.

I don't know the first thing about all of this - but I am guessing that as he had technically started claiming his pension it now gets put back in the "pot" as it were.

Can anyone clarify (in simple terms!) if this is the case of whether I should contact his solicitor...

Any advice would be greatly appreciated.

Thanks

Paul

somethingcorporate

Who is executor? you should direct queries to them.

Yoplumpy

It's the solicitor - I was going to ask him what he thought but wanted to see if anyone else had any advice before I do.

jamesd

You can phone the RAF pension people on their 800 number to get general information from them. They probably won't be able to tell you anything specific to him but should be able to describe the general rules. However, the general rules for this scheme are:

1. A current spouse, children under 23 or other financial dependents (say someone with a lifelong disability) may be entitled to something. So might a former wife under a pension sharing order obtained at the time of a divorce.
2. Otherwise, nothing.

You're right that in general the money that would have been paid out in a government pension or annuity goes back into the pot. It's then used to pay the pension for other people or reduce the tax cost of paying for the pensions for those still around. In this way the reduced payouts to those who die early allow higher payout levels for those who live longest, a form of cross-subsidy insurance against having to provide an income for a long life. Unfortunately it does mean less is paid out to those who die at younger ages.

Don't simply rely on this, no harm in phoning them on their 800 number to be certain of the situation.

If he had other defined contribution/money purchase pension pots that he hadn't purchased an annuity with then some money would normally be inheritable. If he'd taken nothing from the pension, 100% could go to anyone, into a pension or not (since he was under 75, over 75 there's a 55% tax charge). If he'd started taking anything and hadn't purchased an annuity then 100% could go to the pension pot of a spouse (inapplicable) or certain types of financial dependent. For payments to others or to those dependents outside a pension there's be a 55% tax charge. Any expression of wishes form contents would apply and tell the pension company how to proceed. These payments would be outside his estate and his will would not govern them.

If he made a will before the divorce parts of it might no longer be valid, notably parts relating to the former wife.

Yoplumpy

Thanks for this James - it's really helpful.

YesWillMan

jamesd wrote: »

If he made a will before the divorce and if it's governed by UK law, that will is normally no longer valid and he may have died intestate so far as the UK part is concerned.

Sorry but divorce does not invalidate a will. Marriage (unless such a will is done in contemplation of such marriage) does invalidate a will but NOT divorce. All the divorce has an impact on the will is that if the wife was left any benefit, such as the residue, under the will then such benefit is excluded and the will is read as though the wife had died. So if as usual there was a giftover to the children or someone else then those individuals will inherit not the ex wife as she is by the time of death.
Of course there can be an exception and so if the will was done whilst divorce proceedings were ongoing and there was a legacy say of £300 to my wife ..... who I am currently getting divorced from and this shall be paid even if the divorce has been completed at the time of my death, then this legacy will still be paid.

jamesd

Thanks! I've edited my post to give a better description that is not inaccurate.

roddydogs

The 2 Private pensions I have would have paid out 5 years minimum to my estate(Less of course the amount I might have taken) if I had died within 5 years.
Dosent apply of course to the state pension.

RichandJ

roddydogs wrote: »

The 2 Private pensions I have would have paid out 5 years minimum to my estate(Less of course the amount I might have taken) if I had died within 5 years.
Dosent apply of course to the state pension.

Are you sure it's to your Estate ? Most occupational schemes pay the 5 year guarantee at Trustees' discretion so it can avoid the Estate and possible Inheritance Tax. I don't know whether AFPS has a 5-y-g tho.

jackyann

Although I have no technical advice to offer, I can suggest that you contact the RAF Association. They are one of the most helpful organisations, and will guide you through.