Pension death grant and debts

sleepless_saver

olivia84 wrote: »

Thanks again for the replys.

When I spoke to the man at the collection company, I told him that we were applying for probate and what he told me was that there must be something in my mum's estate if her employer was insisting we obtain probate; there wasn't anything when she died and on the probate forms we had to put in the value of estate part a minus balance. I explained to the man that (no offence) we were hoping that the confirmation letter we received from her employer used the specific wording that these monies "do not form part of the estate"

He actually seemed fine about it and said if we got a letter stating that then just to send him a copy and that would be confirmation for them that there was no money in her actual estate and they could close the accounts down.

I'm guessing it's myself who is the executor of her 'estate' being the eldest child and it's myself who has contacted them all and it's my details they have.

She didn't have a will.

Thanks again everyone.

Debt collectors are used to this, it happens often. If probate shows the estate is insolvent that is all they need to know and have a right to know. Some of them may chance it and ask you to pay anyway, but they do know family are not liable.

sleepless_saver

olivia84 wrote: »

Thanks sleepless saver. Maybe I can move it over?

I think board guides can do this but not sure how to get hold of one.

Marcon

There's a lot of wrong 'information' here. You certainly didn't need to get probate to have the death grant in respect of your mum paid to you; the employer was incorrect to say that you did, but you've got it and that's fine. The payment has been made to you/your sister and is NOT part of her estate.

Your step father's death benefit was paid at the discretion of the trustees of what ever life cover arrangement his employer had in place and again, it does NOT form part of your mother's estate or his. Even if the trustees decided to follow the laws of intestacy, it was still paid at their discretion as they have helpfully confirmed: 'please note; this payment does not form any part of Mr *******'s Estate'. It is far more likely that they knew of you and your sister's existence and decided that two stepdaughters were a perfectly valid way to distribute the benefit, given they had failed to get on and pay it to his wife while she was still alive.

If in doubt about what I've said above, check (free) with TPAS: https://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/bereavement-what-to-do/lump-sum-on-death

I'm sorry you and your sister have had such a grim time of late. I'm not sure that people lecturing you on moral obligations is helpful - quite the reverse. Debts die with the debtor if the estate is insolvent.

Brynsam

Keep_pedalling wrote: »

Your step fathers death benefit almost certainly forms part of your mothers estate. The fact that they say that it has been paid to you under the laws of intestacy would seem to confirm this, so her creditors have second call on this after funeral costs.

They haven't said that at all - and the death benefit in respect of OP's step father certainly doesn't form part of OP's mother's estate because it had not been paid out before, sadly, her mum died.

The creditors have no call on it.

olivia84

Thank you very much marcon and brynsam. Yes, I think there was a lot of heel dragging with my step dad's employer's death in service and 10 weeks after he died it still wasn't sorted out. We were very shocked when they paid out as we really didn't expect it and it did say on our letters that the grant was paid entirely at their discretion.

The situation with my mum's employer is a bit strange. They are a very large council but for some reason made us get probate (I don't think we had to either) even though there was no estate to speak of. I think they were just really paranoid about making sure we absolutely were entitled to the grant and didn't pay out to us and have someone take legal action against them further down the line.

Because there was no estate or will we didn't have a solicitor to sort anything out. We dealt with it all ourselves. I also think it strange such a large organisation doesn't know if legally they are able to distribute the money to us and state that it does not form part of the estate.

It is just sad for both of them. They were both pretty rubbish with money and never had 2 beans to rub together their whole lives, and now all this money is floating around; not an absolute fortune, but enough to help us out with paying a decent amount off my mortgage and a decent deposit for my sister. Just shows how you're worth more dead than you are alive.

Thanks again.

Marcon

olivia84 wrote: »

Thank you very much marcon and brynsam. Yes, I think there was a lot of heel dragging with my step dad's employer's death in service and 10 weeks after he died it still wasn't sorted out. We were very shocked when they paid out as we really didn't expect it and it did say on our letters that the grant was paid entirely at their discretion.

In fairness to your step dad's employer, it is not unusual for a death in service benefit to take quite a time to sort out. Even where an employee leaves something called an 'expression of wish' form and this is up to date, the trustees who are responsible for deciding who receives any lump sum death in service benefit have to go through quite a lengthy process before making their decision. They shouldn't just rely on the form (although in practice many do!).

The 'discretion' was not whether to pay the lump sum, but who should receive it. The reason it is done this way is because the payment is then normally tax free in the hands of the recipient.

Marcon

olivia84 wrote: »

The situation with my mum's employer is a bit strange. They are a very large council but for some reason made us get probate (I don't think we had to either) even though there was no estate to speak of. I think they were just really paranoid about making sure we absolutely were entitled to the grant and didn't pay out to us and have someone take legal action against them further down the line.

Because there was no estate or will we didn't have a solicitor to sort anything out. We dealt with it all ourselves. I also think it strange such a large organisation doesn't know if legally they are able to distribute the money to us and state that it does not form part of the estate.

I'd go back to them and make a formal complaint. Point out they were wrong and send then a bill for the costs you incurred in getting probate. If you need a bit of help, TPAS is there for free assistance: https://www.pensionsadvisoryservice.org.uk/contacting-us

Quite apart from ensuring you aren't out of pocket, it might spare someone else being put through the mill at a time when they are sad and grieving.

olivia84

Thanks marcon.

Yes, my step dad's work were actually really nice being honest. The woman from HR kept in touch with me regularly via email after he died, and also after my mum died.

We didn't actually pay anything for the probate. As there was nothing in her estate, there was no fee. I think the fee for probate goes on a percentage of what value the estate has and as hers was at a minus balance because of the debts, there wasn't any fee. But, yes, the council seem to be a bit dithery. Between insisting on probate to not really knowing the laws regarding whether or not the payment officially forms part of the estate.

One lady I spoke to from her work (just someone who happened to answer my call that day) said that she believed a person's estate to be all cash, assets and property a person has up until the date of death and that she would have thought a death grant wouldn't be part of itasit arose after the date of death.

Ultimately though, it seems they don't really want involved and if they can avoid committing themselves to anything, they will.

Thanks again

Keep_pedalling

Brynsam wrote: »

They haven't said that at all - and the death benefit in respect of OP's step father certainly doesn't form part of OP's mother's estate because it had not been paid out before, sadly, her mum died.

The creditors have no call on it.

Just because something has not been paid does not mean it falls out of the estate, if that were the case depts owed to an estate would never be included in the estate.

The thing here is not to take the opinions of strangers on the internet as fact, but establish if the trustees made the step children the benificiaries of their step fathers pension or his widows estate.

Silvertabby

My sympathies.

I'm a retired LGPS admininstrator. When your mum died, either she hadn't nominated anyone to receive her lump sum death grant or - more likely - she had nominated your dad. In the absence of a valid nomination form or will to work from, your mum's LGPS had to cover themselves against any further claims before paying the lump sum to you (I've actually known cases whereby 'only child' has claimed the pension lump sum only for other siblings to put in claims as well) hence the request for probate.

In a nutshell, your mum's LGPS death grant was paid to you, and it is your property to do with as you will.

Your stepdad's death in service award is a little more complex. I note that his HR told you that the money does not form part of your stepdad's estate, which is correct. However, was it paid to your mum's estate ?
If it was, then it is part of her assets and should be used to pay her (but not your stepdad's) debts. That's why I say 'complex' - you need to clarify if the trustees decided to pay this money straight to you as the alternate beneficiary, or if they paid it to you as the executor of your mum's estate. If it's the latter, then you have the legal responsibility (as executor) to use this money to offset your mum's debts.