Tax free lump sum - keeping it invested

cfw1994

MoneySavingGerbil said:

Albermarle said:

OP - Presume you have taken into account that by taking the 25% TFLS out of the pension , your are potentially exposing it to Inheritance tax at a later time ?

No kids so no immeidiate concerns on IHT, but you've prompted me to so some research. I hadn't really thought through the implications of pensions being ouside the estate. Neither of us have wills and we're planning on getting those sorted in the next few months. I'm guessing we really ought to have an additional beneficiary listed on our DC pensions other than each other for some minimal percentage so that if something happened to both of us at the same time the pension trustees have some idea of our wishes.

On that last point….I asked Aviva about the operations of the EOW (“Expression of Wish”)….just realised they kind of mostly answered it but never responded to my clarification.

Maybe should be a different thread…but dies anyone here know how Trustees of pensions should behave if there is a “worst case scenario” of both partners passing?  

Is it as simple as they would follow the will requests (barring no weird third parties popping out of the woodwork!)

MoneySavingGerbil

cfw1994 said:

MoneySavingGerbil said:

Albermarle said:

OP - Presume you have taken into account that by taking the 25% TFLS out of the pension , your are potentially exposing it to Inheritance tax at a later time ?

No kids so no immeidiate concerns on IHT, but you've prompted me to so some research. I hadn't really thought through the implications of pensions being ouside the estate. Neither of us have wills and we're planning on getting those sorted in the next few months. I'm guessing we really ought to have an additional beneficiary listed on our DC pensions other than each other for some minimal percentage so that if something happened to both of us at the same time the pension trustees have some idea of our wishes.

On that last point….I asked Aviva about the operations of the EOW (“Expression of Wish”)….just realised they kind of mostly answered it but never responded to my clarification.

Maybe should be a different thread…but dies anyone here know how Trustees of pensions should behave if there is a “worst case scenario” of both partners passing?  

Is it as simple as they would follow the will requests (barring no weird third parties popping out of the woodwork!)

I'm planning on putting some siblings on my EOW at 1% each just in case. Judging by some comments on here I've read in the past EOW seems to trump the will and I'd be worried they decide to pay out nothing if all parties on the EOW are no longer around even if there's a will. After all, if the will covers the estate and the pension isn't part of the estate is there any obligation for them to pay out?

I'd advise anyone reading this who gave their employer an EOW form some time ago to check with their pension provider that they have the details recorded correctly. My work DC scheme was with Friends Life, now taken over by Aviva. There's two online portals to access it. The FriendsLife portal which I've always used as it shows the value of the individual investments and the MyAviva portal which up until now has had very limited functionality. Out of curiosity I accessed the MyAviva portal yesterday to see if it had improved and saw they'd added a beneficiaries section. I clicked on it and zilch... No beneficiaries listed. It could just be that they've got a paper record still and haven't computerised it, but I wouldn't like to bet on it. There's never been any online access to beneficiary details via the FriendsLife portal so I've no way of knowing if FriendsLife had the details originally and they got lost when they were taken over or whether my employer just failed to pass on the completed form when I joined.

Albermarle

I'm planning on putting some siblings on my EOW at 1% each just in case. Judging by some comments on here I've read in the past EOW seems to trump the will and I'd be worried they decide to pay out nothing if all parties on the EOW are no longer around even if there's a will. After all, if the will covers the estate and the pension isn't part of the estate is there any obligation for them to pay out?

Your will only covers what is in your estate and the pension pots will not be in your estate , so they should not even be mentioned in the will . So the EOW does not 'trump the will' as it is separate, and only relates to the pension which is kept in trust ( which is why it does not count in your estate for IHT etc as it is not technically yours )

However if there is no EOW form filled in, and/or there are some unusual circumstances,  the Trustees will investigate the situation and they may look to the will for guidance amongst other avenues of investigation.

I am not sure what happens if they come to a complete dead end, but not paying out at all seems a very unlikely outcome.

QrizB

MoneySavingGerbil said:

cfw1994 said:

MoneySavingGerbil said:

No kids so no immeidiate concerns on IHT, but you've prompted me to so some research. I hadn't really thought through the implications of pensions being ouside the estate. Neither of us have wills and we're planning on getting those sorted in the next few months. I'm guessing we really ought to have an additional beneficiary listed on our DC pensions other than each other for some minimal percentage so that if something happened to both of us at the same time the pension trustees have some idea of our wishes.

On that last point….I asked Aviva about the operations of the EOW (“Expression of Wish”)….just realised they kind of mostly answered it but never responded to my clarification.

Maybe should be a different thread…but dies anyone here know how Trustees of pensions should behave if there is a “worst case scenario” of both partners passing?  

Is it as simple as they would follow the will requests (barring no weird third parties popping out of the woodwork!)

I'm planning on putting some siblings on my EOW at 1% each just in case.

I've done something similar, have named my children for 5% each on my EOW in case Mrs QrizB pre-deceases me and I don't have a chance to upsate the EOW before I snuff it too.

I'd appreciate some feedback from someone with more experience as to whether this is a good idea or not!

cfw1994

QrizB said:

MoneySavingGerbil said:

cfw1994 said:

MoneySavingGerbil said:

No kids so no immeidiate concerns on IHT, but you've prompted me to so some research. I hadn't really thought through the implications of pensions being ouside the estate. Neither of us have wills and we're planning on getting those sorted in the next few months. I'm guessing we really ought to have an additional beneficiary listed on our DC pensions other than each other for some minimal percentage so that if something happened to both of us at the same time the pension trustees have some idea of our wishes.

On that last point….I asked Aviva about the operations of the EOW (“Expression of Wish”)….just realised they kind of mostly answered it but never responded to my clarification.

Maybe should be a different thread…but dies anyone here know how Trustees of pensions should behave if there is a “worst case scenario” of both partners passing?  

Is it as simple as they would follow the will requests (barring no weird third parties popping out of the woodwork!)

I'm planning on putting some siblings on my EOW at 1% each just in case.

I've done something similar, have named my children for 5% each on my EOW in case Mrs QrizB pre-deceases me and I don't have a chance to upsate the EOW before I snuff it too.

I'd appreciate some feedback from someone with more experience as to whether this is a good idea or not!

You'd think this would be reasonably straightforward....but my questions went to the "Complex Team", getting a lengthy answer that still didn't quite answer all my questions.
The EOW is not a legally binding nomination, & they had this to say on that point of nominating them as a 1% part:

"The member including them on the EOW with a 1% share each does not put them in scope where they were not before – but it does mean we can ultimately make a decision of a 98/1/1 split and provide rationale for it.  However – if the member does not specifically want us to pay in this manner, we would ask that any instruction is not completed like this."

They did add:

if the member wishes to provide us an advance instruction, it may be best to provide a bespoke request that can be kept on file – it could perhaps start with a basis of 100% to the spouse but make it clear that the spouse may not wish to receive 100% and that the children should be next in line for a decision.

The answer is clear.   Do not die: live forever 🤪