Dependant’s pension after the death of my dad

EmmaW4lli5

Situation: My dad died unexpectedly a couple of weeks ago. He was only 65 and still working.

He had begun to take one of his pensions (AVIVA) a couple of years ago. Which was paying him £176 per month.

He was paying into a private pension (something call The Platform) and he was also paying into his workplace pension (NOW).

I phoned AVIVA yesterday to notify them of his death.

He had a five year guarantee, so there will be approx three years of payments paid out as a lump sum. The person I spoke to said this will be paid to his estate. After I got off the phone I realised I should have asked more about this, firstly because my research tells me that a pension lump sum doesn’t form part of the deceased’s estate, but also they didn’t take any contact details from me about the executor of his estate (unfortunately he’d appointed the solicitor who made his will as the executor). They only took my phone number, no address or email address to send correspondence to. I think I need to phone they back today don’t I?

So onto the meat of my post, if you will.

I did have an interesting conversation with the person I spoke to at AVIVA about potential for a dependant’s pensions to be paid.

For this I’m going to need to give you some background.

My dad was divorced. I’m his only child, and I’m 34 so no scope for a widow’s or dependant child’s pension. But…

He lived with his brother in their family home (the house my dad was born in, in fact). There were four siblings. They each owned 25% of the house after my grandparents died. My uncle has always lived there. My dad moved in a couple of years before my Nan died to help care for her. None of the siblings could afford to buy the others out of their share, so it ticked along like that with my dad and uncle living in the house, sharing the bills etc.

Because of this, AVIVA have said that my dad and uncle may be classed as having a ‘mutual financial relationship’ and have asked me to send them evidence such as utility bills in both their names. To complicate matters, all the bills were in my dad’s name and paid from his bank account, my uncle just gave him the money towards his share. We now need to transfer all the utilities into my uncle’s name, so that’s a whole other task. I should be able to get a copy of their council tax statement, showing they were both registered as living at the house. So I will send that to AVIVA.

My uncle is deaf. Not in a lost his hearing in old age way, he’s been deaf all his life. Apparently, as he has a disability, this will strengthen his claim to a dependent’s pension. AVIVA have asked me to send something from his doctor confirming his disability. No problem, I can ask him to get his patient summary from his GP.

I don’t want to get my uncle’s hopes up regarding this. The day after my dad died he was already panicking that he would need to sell the house and find somewhere to rent on his own. He has never lived alone, never paid utility bills himself.

Does anyone have experience of this sort of dependent’s pension? Is it likely that my uncle would get it?

And presumably I also need to check whether he would be entitled to it from my dad’s other pension providers? 

What about my dad’s state pension? He died before the age of getting his state pension , my research tells me he would have started to receive it when he was 66yrs and 4 months, which would have been in August of this year. Is my uncle likely to be entitled to a dependent’s pension from that?

Well done if you’ve read this far, I know it was a long one.

Thrugelmir

Have you seen and read the will? Have you spoken to the Executor? 

molerat

Sorry for your loss.

The last one has a simple answer.  When your father died so did any SP entitlement.  There is, and only ever has been, a limited scope for spouse entitlement.  BTW he would have commenced his SP at age 66, the move to 66+ does not commence until 2026.

EmmaW4lli5

Thrugelmir said:

Have you seen and read the will? Have you spoken to the Executor? 

Yes, I have a copy of dad’s will. He left his 25% share of the house to his brother, and then I’m his ‘residual beneficiary’ so any monies left in his bank account are left to me. The summary sheet from when the solicitor drew up his will also states that he had told them that I was nominated to receive his private pension fund.

The solicitor has been notified of dad’s death and I’ll be dropping off copies of paperwork to them once I get the death certificates through the post. As dad’s death was unexpected it had to be referred to the coroner for a post mortem, which is why I don’t have the death certificates yet.

My aunt (one of the four siblings) died six months ago and we’ve been having such a hard time dealing with the solicitor who was appointed executor of her estate that I’m thinking about asking dad’s solicitor to renounce their role so I can do it myself.

Marcon

EmmaW4lli5 said:

He had a five year guarantee, so there will be approx three years of payments paid out as a lump sum. The person I spoke to said this will be paid to his estate. After I got off the phone I realised I should have asked more about this, firstly because my research tells me that a pension lump sum doesn’t form part of the deceased’s estate, 

If your father didn't leave an expression of wish form, then it may well be that payment to the estate is the default position. The crucial point is whether payment to the estate is at the discretion of Aviva (in which case even if paid to the estate, it still isn't liable to IHT), or whether they had to pay it to the estate as a condition of the pension your father had.

eskbanker

EmmaW4lli5 said:

My aunt (one of the four siblings) died six months ago and we’ve been having such a hard time dealing with the solicitor who was appointed executor of her estate that I’m thinking about asking dad’s solicitor to renounce their role so I can do it myself.

Not convinced it's fair or reasonable to judge one solicitor's future performance on your opinion of another - shouldn't they be given the chance to do the job your dad entrusted them to do?

dunstonh

It sounds like your father bought an annuity with the pension.  So, effectively he didn't have the pension anymore.  He had an annuity instead.  So, death benefits would follow the annuity basis and not a pension fund basis.

EmmaW4lli5

dunstonh said:

It sounds like your father bought an annuity with the pension.  So, effectively he didn't have the pension anymore.  He had an annuity instead.  So, death benefits would follow the annuity basis and not a pension fund basis.

The word ‘annuity’ has been mentioned, but I don’t know what it means?

QrizB

EmmaW4lli5 said:

dunstonh said:

It sounds like your father bought an annuity with the pension.  So, effectively he didn't have the pension anymore.  He had an annuity instead.  So, death benefits would follow the annuity basis and not a pension fund basis.

The word ‘annuity’ has been mentioned, but I don’t know what it means?

It's a financial product where you pay a sum of money to receive a regular income for (normally) the rest of your life. A bit like life insurance but in reverse.
https://www.legalandgeneral.com/retirement/pension-annuity

EmmaW4lli5

QrizB said:

It's a financial product where you pay a sum of money to receive a regular income for (normally) the rest of your life. A bit like life insurance but in reverse.

Thank you, but how is that different from a pension?

Preacher64

EmmaW4lli5 said:

The word ‘annuity’ has been mentioned, but I don’t know what it means?

Sorry for your loss and the difficulties you are experiencing but being an executor can be complex and has legal implications and if your knowledge is limited, I’d suggest allowing the Solicitor to manage the affairs as per your Dad’s wishes. It will probably be a lot simpler and less stressful for you.