Pension lump sum payout - Estate query

Can someone offer me advice please?

Husband died in last year, without making a will so I know I have to apply for Letters of Administration. 

However because he was only 54, his pension pot will be paid out as a lump sum. Do I include this as his assets when complete the inheritance tax forms and applying for the Letters of Administration or do I omit it?

I know I need to get this sorted out but I've spent the last 3 months fire fighting on other fronts so please don't shout at me for not doing it,
Lloyds OD / Natwest OD / PO CC / Wescott / Argos Card / JD Williams cleared :) thanks to the 1 debt v 100 day challenge

Replies

  • p00hsticksp00hsticks Forumite
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    Sorry for your loss.
    Firstly, are you sure that probate / letters of administration will be required ? It's not always necessary, especially if there's no property involved or if the only property is jointly owned. 
    Pensions are usually held in trust and so fall outside of the estate, but not always - I suggest you ask the question of the Pnesion Provider.
  • Savvy_SueSavvy_Sue Forumite
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    And no-one will shout at you here ... You do what you can do, and you take care of yourself. Be kind to yourself.
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  • edited 25 January at 8:13PM
    BooJewelsBooJewels Forumite
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    edited 25 January at 8:13PM
    My sincere condolences - and no shouting from here.

    I'm in a similar situation, although my husband did leave a will and I'm a bit ahead of you.  His pension pots paid lump sums and they advised me, as @p00hsticks said, that as they were in trust and the decision made by trustees, they fell outside his estate, so you don't pay tax on them - but ask them, they're very helpful.  I'd also query whether you actually need to apply for Letters of Administration - if you were married and it isn't being contested.   I didn't apply for Probate, as everything was in either joint names or my name - we'd already been changing utilities etc. and I'm not planning on selling the house.

    Check if he had any workplace pensions too - I found a small one from a short-lived part time job, but it paid 72 quid from one email, so worth having.

    Have you also applied for the Bereavement Support Payment? That pays a lump sum and then a monthly amount for 18 months, the rate depending on if you have children getting child benefit.
  • gettingtheresometimegettingtheresometime Forumite
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    Thank you all for being so understanding - as I've said I've been firefighting other issues of his for the last 3 months which I would have had to do even if he had left a will.

    I think I will need to get Letters of Administration - National Savings won't pay out until I've produced those as won't the pension company. The person I spoke to at the Pension Company said I would have to declare it but I was just trying to understand why if it was effectively an insurance payout it needed to be included - had he died after his 55th birthday the lump sum wouldn't have been applicable.

    Boojewels - I have applied & been granted the BSA - it's at the lower amount but it certainly has made a difference. 
    Lloyds OD / Natwest OD / PO CC / Wescott / Argos Card / JD Williams cleared :) thanks to the 1 debt v 100 day challenge
  • BooJewelsBooJewels Forumite
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    Sorry @gettingtheresometime - the penny just didn't drop when you said he was 54 - my husband was 62, so right in the zone for getting it paid easily and still qualifying for the life insurance bonus - I still got it as a lump sum.  Obviously being under 55 changes things.

    Glad you got the BSP - I learnt about it from this forum, just before I 'qualified' for it, so try and pay it forward by putting others on to it.  Because, as you say, it's worth having and has really helped.

    NS&I certainly don't make things easy!  They made me jump through endless hoops, asking me for the same information repeatedly in different formats - this is on my parents estates.  I didn't even know how much it would be and the harder they made me work, the higher I fantasised it might be. After 5 months they paid it directly into my bank before I got any paperwork.  A grand total (in 3 separate payments) of £4.20. 2 PBs each of my parents and 20p - 4 shillings in a school savings bond from 1941. They don't apparently pay interest on amounts below a pound.  I spent more than that on printing ink, paper and postage.
  • Keep_pedallingKeep_pedalling Forumite
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    Thank you all for being so understanding - as I've said I've been firefighting other issues of his for the last 3 months which I would have had to do even if he had left a will.

    I think I will need to get Letters of Administration - National Savings won't pay out until I've produced those as won't the pension company. The person I spoke to at the Pension Company said I would have to declare it but I was just trying to understand why if it was effectively an insurance payout it needed to be included - had he died after his 55th birthday the lump sum wouldn't have been applicable.

    Boojewels - I have applied & been granted the BSA - it's at the lower amount but it certainly has made a difference. 
    If the pension company require LOA it sounds like that particular pension might fall within his estate, but that is unusual so I would double check the status with them.
  • MarconMarcon Forumite
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    BooJewels said:
    Sorry @gettingtheresometime - the penny just didn't drop when you said he was 54 - my husband was 62, so right in the zone for getting it paid easily and still qualifying for the life insurance bonus - I still got it as a lump sum.  Obviously being under 55 changes things.


    Shouldn't do, unless there is something unusual about this particular pension pot. There is no minimum age, nor is there usually a requirement to pay out as a lump sum - there are normally other options. 

    OP - you are talking about a Pension Company. Any idea if this is a trust based scheme and the 'Pension Company' simply administer it? If you name the Pension Company, that should almost certainly confirm the position.
  • gettingtheresometimegettingtheresometime Forumite
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    Marcon said:
    BooJewels said:
    Sorry @gettingtheresometime - the penny just didn't drop when you said he was 54 - my husband was 62, so right in the zone for getting it paid easily and still qualifying for the life insurance bonus - I still got it as a lump sum.  Obviously being under 55 changes things.


    Shouldn't do, unless there is something unusual about this particular pension pot. There is no minimum age, nor is there usually a requirement to pay out as a lump sum - there are normally other options. 

    OP - you are talking about a Pension Company. Any idea if this is a trust based scheme and the 'Pension Company' simply administer it? If you name the Pension Company, that should almost certainly confirm the position.
    It's ReAssure & I think, from memory, it was a Personal Pension Plan that he set up with Guardian eons ago. 

    I did query at the time I got the forms whether there was a pension option but was told no, that the lump sum payment was the only option
    Lloyds OD / Natwest OD / PO CC / Wescott / Argos Card / JD Williams cleared :) thanks to the 1 debt v 100 day challenge
  • MarconMarcon Forumite
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    Marcon said:
    BooJewels said:
    Sorry @gettingtheresometime - the penny just didn't drop when you said he was 54 - my husband was 62, so right in the zone for getting it paid easily and still qualifying for the life insurance bonus - I still got it as a lump sum.  Obviously being under 55 changes things.


    Shouldn't do, unless there is something unusual about this particular pension pot. There is no minimum age, nor is there usually a requirement to pay out as a lump sum - there are normally other options. 

    OP - you are talking about a Pension Company. Any idea if this is a trust based scheme and the 'Pension Company' simply administer it? If you name the Pension Company, that should almost certainly confirm the position.
    It's ReAssure & I think, from memory, it was a Personal Pension Plan that he set up with Guardian eons ago. 

    I did query at the time I got the forms whether there was a pension option but was told no, that the lump sum payment was the only option
    I'd push back on the need to provide ReAssure with Letters of Administration, but you don't need to go it alone. Free, expert, impartial and sympathetic help readily available: https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems
  • gettingtheresometimegettingtheresometime Forumite
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    Marcon said:

    Marcon said:
    BooJewels said:
    Sorry @gettingtheresometime - the penny just didn't drop when you said he was 54 - my husband was 62, so right in the zone for getting it paid easily and still qualifying for the life insurance bonus - I still got it as a lump sum.  Obviously being under 55 changes things.


    Shouldn't do, unless there is something unusual about this particular pension pot. There is no minimum age, nor is there usually a requirement to pay out as a lump sum - there are normally other options. 

    OP - you are talking about a Pension Company. Any idea if this is a trust based scheme and the 'Pension Company' simply administer it? If you name the Pension Company, that should almost certainly confirm the position.
    It's ReAssure & I think, from memory, it was a Personal Pension Plan that he set up with Guardian eons ago. 

    I did query at the time I got the forms whether there was a pension option but was told no, that the lump sum payment was the only option
    I'd push back on the need to provide ReAssure with Letters of Administration, but you don't need to go it alone. Free, expert, impartial and sympathetic help readily available: https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems
    Thank you very much for this. I'll let you know how I get on.
    Lloyds OD / Natwest OD / PO CC / Wescott / Argos Card / JD Williams cleared :) thanks to the 1 debt v 100 day challenge
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