Dad's pension - little bit complicated

Sage123

Hello!

So let me explain a little bit about the situation, my dad died a few years ago and my auntie and uncle were made executives of his will. His estate was handled and us children got a third of the money each when we hit 21.

My brother recently found a letter about a pension my dad had been paying into, now we have been in contact with the pension company since xmas last year and they are waiting to hear from the executives of his will - PROBLEM, we had a huge family argument and now they are refusing to help or be contacted.

The company keep saying they are "looking for ways around this" and yet have still to get their finger out their bum to do so. Surely there has to be some way around this that the family we no longer speak to don't have to be involved?

Any advice will really be appreciated.

TIA

jamesd

Are the executors the ones refusing to help or be contacted? If this was a matter related to the estate they would be breaching their sworn legal duty and could be removed as executors following the procedures for doing that.

Fortunately, pension and insurance claims are not part of the estate so do not have to involve the executors at all. Neither the executors nor the will have any governing role in what happens to the pension money. It is a matter for the trustees of the pension scheme. The trustees will be interested in what the will says but it's up to the trustees to decide. If there are children and no spouse all of the money would normally be evenly split between the children. Possible exceptions in cases where one was still financially dependent, perhaps due to disability, who might get more to help with that.

If the three children are on speaking terms I suggest that they ask the pension firm to pay the money to them in equal shares, just as was done in the will, noting the lack of other appropriate beneficiaries. If not on speaking terms, those who are should ask the trustees to act in this way and ensure that the trustees have contact details for the others.

It will matter whether he had taken any money from the pension, either the lump sum or any income. If not, life is most easy and all of the pension pot value can be paid out tax free now. If anything had been taken from it, the trustees should instead be asked to delay payment until 6 April 2015 or later so that the money can be paid out tax free, which applies if he was under 75 in this case. Otherwise there would be a 55% tax charge because money had been taken, so it's better to delay for a few months to avoid that. If he was 75 or older ask and we can explain the rules, delay until after 6 April will be best.

PensionTech

I don't disagree with the above, but the situation could be a little more complicated depending on the type of scheme.

OP, can you find out from the pension company whether the scheme is DB or DC?

If DC, can you also find out whether it is trust-based or contract-based?