Death in Service BT trustees

autistic-james_2

Could anyone clarify the legal aspects of death in service payments paid out when there is NO will? The trustees linked to BT are planning on sharing my aunties deceased husbands payout with his 3 adult children who he had previously when he was alive DID NOT want them to have any funds! The law stipulates that the first £250,000 is given to the spouse and then 50% after that amount with the remaining 50% shared with any children / grand children? So if the death in service payment is part of the persons estate how does my aunt ensure the trustees adhere to the law and pay the entire amount to her £60,000 approximately? If it's not part of the estate how can she prevent his children getting any funds which would carry out his last wish? One child he never saw for over 30 years and doubts that he's his but his name is on the persons birth certificate!

I just hope the payment is part of his estate?

Yorkshireman99

Usually the trustees have discretion and will often hold a "wishes letter" but it is not binding. The payment will not usually form part of the estate.

Keep_pedalling

It sounds as if way back he filled in an expresses of wishes form requesting his children benefit, but failed to do another one when he married your auntie.

The expresses of wishes form is not binding on the trustees, she she needs to appeal to them to reconsider.

securityguy

Moral: if you are a member of a pension fund with a death in service benefit, make sure your will and you wishes letter are up to date. YM is right that trustees don't have to follow it but they usually will unless there are clear and compelling reasons to do otherwise. In the absence of a wishes letter, they can either put it into the estate or follow the proportions of the will/intestacy but keep it out of the estate or do whatever they like, but will tend towards at least considering the will. If there is an expression of wishes, they will tend to follow it, outdated or not: unlike with wills, they are not invalidated by marriage.

But in this case, splitting it between relatives is a perfectly reasonable thing to do. If your aunt's husband (presumably from context a re-marriage) was so keen on how his death in service benefit should be allocated, why did he have (by the sounds of it) neither a current will nor a current letter of wishes?

Keep_pedalling

The best chance she has of getting this changed is on the grounds of hardship. If this decision leaves her struggling financially then she may well successfully get it overturned in her favour.

Unfortunately trustees are not mind readers, and undocumented wishes are worthless.

Finst

As already covered by the other responses, the payment is not part of the estate. The trustees have discretion to pay to whoever they choose. Although normally they would follow the person's written wishes, there is no requirement for them to do so.


The trustees will be well used to making decisions in such difficult/contested cases. Your Aunt needs to write to the scheme/trustees explaining the situation (estranged from children, etc etc) and why they should pay the lump sum to her instead.

leespot

autistic-james wrote: »

Could anyone clarify the legal aspects of death in service payments paid out when there is NO will? The trustees linked to BT are planning on sharing my aunties deceased husbands payout with his 3 adult children who he had previously when he was alive DID NOT want them to have any funds! The law stipulates that the first £250,000 is given to the spouse and then 50% after that amount with the remaining 50% shared with any children / grand children? So if the death in service payment is part of the persons estate how does my aunt ensure the trustees adhere to the law and pay the entire amount to her £60,000 approximately? If it's not part of the estate how can she prevent his children getting any funds which would carry out his last wish? One child he never saw for over 30 years and doubts that he's his but his name is on the persons birth certificate!

I just hope the payment is part of his estate?

This is incorrect - the grandchildren would only inherit anything if their parents were deceased.

autistic-james_2

He was working full time at the time of having a major stroke which killed him with 2 months

securityguy

autistic-james wrote: »

He was working full time at the time of having a major stroke which killed him with 2 months

Which is exactly why everyone should have a will and make sure that expressions of wishes letters are up to date. The stuff people talk about keeping detailed records is a matter of saving work and possibly tax, and the world won't end if you don't do it, but if your will (or lack of will) and expression of wishes don't reflect your actual wishes, that's the end of it: resolving that may be close to impossible.

silvercar

When you join the BT pension scheme you are given a form to write the intended beneficiary of the payout. They will abide by this unless it is challenged.