Guaranteed pension income

Sazzie23

Hi folks

I'm not in this position yet, but I expect to be soon, :(unless we won the lottery!

Have previously posted that partner will die in debt, we only have one joint loan which I already pay. No joint mortgage, he does not own any property. It's a very complex relationship which I won't bore you with but we are not and never have been married. Will leaves everything to me.

His outstanding individual debt will be on a loan which will be about £7,000 owed. Assume he has no assets, there is no insurance etc. but there is a private pension which has guaranteed payment til 2017.

Funeral costs are covered by prepayment.

My question here is - Will guaranteed pension payments (£230 per month until 2017) have to be paid towards outstanding loan?

g6jns_2

Sazzie23 wrote: »

Hi folks

I'm not in this position yet, but I expect to be soon, :(unless we won the lottery!

Have previously posted that partner will die in debt, we only have one joint loan which I already pay. No joint mortgage, he does not own any property. It's a very complex relationship which I won't bore you with but we are not and never have been married. Will leaves everything to me.

His outstanding individual debt will be on a loan which will be about £7,000 owed. Assume he has no assets, there is no insurance etc. but there is a private pension which has guaranteed payment til 2017.

Funeral costs are covered by prepayment.

My question here is - Will guaranteed pension payments (£230 per month until 2017) have to be paid towards outstanding loan?

The outstanding pension payments will form part of the estate. If the estate liabilities exceed the assets then estate is insolvent. Funeral costs have to be paid first. Administering an insolvent estate is not a good idea. Better to let the creditors deal with it. This means it would be up to the loan company as to what they wanted to do.

Finst

g6jns wrote: »

The outstanding pension payments will form part of the estate. If the estate liabilities exceed the assets then estate is insolvent. Funeral costs have to be paid first. Administering an insolvent estate is not a good idea. Better to let the creditors deal with it. This means it would be up to the loan company as to what they wanted to do.

Not sure I agree with this. Pension death benefits are often paid to whoever the Trustees of the pension scheme decide to pay them to (the Trustees have discretion over who receives the payments). In that case, if the Trustees decided to give the death benefits to the OP, they would not form part of the estate.

OP, I think you need to check the Rules of the pension scheme. The pensions administrators should be able to tell you whether the payments would go directly to the estate or not

G6JNS

Finst wrote: »

Not sure I agree with this. Pension death benefits are often paid to whoever the Trustees of the pension scheme decide to pay them to (the Trustees have discretion over who receives the payments). In that case, if the Trustees decided to give the death benefits to the OP, they would not form part of the estate.

OP, I think you need to check the Rules of the pension scheme. The pensions administrators should be able to tell you whether the payments would go directly to the estate or not

I think you are confusing a death benefit with a guarantee to pay the pension for so many years. However, the OP needs to establish what the scheme rules are.

Sazzie23

G6JNS wrote: »

I think you are confusing a death benefit with a guarantee to pay the pension for so many years. However, the OP needs to establish what the scheme rules are.

Hi and thanks for posting, it's definitely a guaranteed pension payment from an annuity, we did ask if we could have a lump sum when OH was diagnosed but they refused. There is no death benefit with the plan.

It wouldn't be paid to me anyway it would go to his (grown up) kids but I can't get my head round whether it should be used to pay off the debts and if so how this happens.

I liked the idea of let the creditor sort it out with the pension co.