Confused by pensions section of estate valuation

AnAnonUser

Apologies, going anon as i am a regular user here.

Completing probate for my partner who died last month 

So first I have to do estates valuation. Most of the sections are obvious, but one part isn't, to me anyway.

The online form asks about "Value of remaining pension payments being paid to the estate"

I thought pensions were outside the estate? So that leads to ....
1. My partner had a pension, after her death that becomes half to me, as monthly payments. Is that "being paid to the estate" ? And how would you value that if its indefinite?

2. She had a SIPP with £x in it, is that £x being paid to the estate? (presumably not if pensions are out of the estate but ...)

I had a look but couldn't find any government guidance in this area, no doubt its there somewhere so it would also help if anyone can point me at that.

I dont think its difficult just a lack of understanding whats behind the questions.

Thanks

Linton

I think "being paid to the estate" would be where DB or other pensions are due to be paid out in arrears, or perhaps where there is a death benefit to the estate, or perhaps where the trustees cannot find a suitable recipient or perhaps where there is a minimum guaranteed payment period.  Money within the pension is, as you say, normally outside the estate.

Dox

Payments forming part of death estate [source: IHT Manual 17051 to 17056]

• where the member's estate has a legal entitlement to have the value of the death benefit paid to it then the death benefit would form part of the member's estate. This would arise, for example, where a retirement annuity contract was held where the death benefits had not been assigned into a trust.
• any outstanding guaranteed payments from an annuity that are payable to the estate or paid at the annuitants direction are included in the estate for IHT purposes (see IHT and annuities below).
• any arrears of annuity payable to the member on death would also form part of their estate.

Dox

Linton said:

I think "being paid to the estate" would be where DB or other pensions are due to be paid out in arrears, or perhaps where there is a death benefit to the estate, or perhaps where the trustees cannot find a suitable recipient 

If the payment is made at the discretion of trustees, it remains free of IHT even if the trustees choose to pay it to the estate. The crucial point is that it is paid under trustee discretion, not as a result of a binding direction from the deceased member.

"Where the trustees have discretion ( IHTM17123 <http://www.hmrc.gov.uk/manuals/IHTmanual/IHTM17123.htm> ) as regards payment of death benefits ( IHTM17030 <http://www.hmrc.gov.uk/manuals/IHTmanual/IHTM17030.htm> ) (so that they can choose whom to pay the death benefits to) then the death benefits do not form part of the deceased’s estate for IHT. This applies even where the trustees have a discretion over the payment and exercise that discretion in favour of the deceased’s estate - the lump sum death benefit is not liable to IHT."

AnAnonUser

Thanks VERY MUCH  to all.

I will put "none".