How do I divide up my estate

CharlieC2210

Can I leave, for example, my pension to one person, my life insurance to another, etc, etc; or do I have to work out the total cash value of those kind of assets and leave a specific amount to one person, a specific amount to another person, etc, etc? 

If I can do it the former way (my pension to x, my life insurance to y, etc) can I then also stipulate from which asset (e.g, life insurance) are the funeral expenses, debts, bills, etc, to be paid?

Flugelhorn

I think some of these are considered to be "outside the estate" if you nominate people on the pension / life insurance forms - that person should get the full amount subject  to the trustees agreeing and the money won't be part of the estate. expenses are covered from the rest of the estate 

Sea_Shell

Flugelhorn said:

I think some of these are considered to be "outside the estate" if you nominate people on the pension / life insurance forms - that person should get the full amount subject  to the trustees agreeing and the money won't be part of the estate. expenses are covered from the rest of the estate 

This.

But for assets that do fall within the estate, specifying things that you might no longer own when you pass, can cause those bequests to fail.

Houses, cars, named accounts etc.

SevenOfNine

Flugelhorn said:

I think some of these are considered to be "outside the estate" if you nominate people on the pension / life insurance forms - that person should get the full amount subject  to the trustees agreeing and the money won't be part of the estate. expenses are covered from the rest of the estate 

"Should" correctly written in bold italics!  The trustees of a pension & death in service payment didn't automatically pay out to the nominated person the deceased had chosen on their form completed 3 years previously. The money was indeed "outside of the estate".

The trustees approached us first (as executors &, by default, estate beneficiaries, no will) & asked if there was anything we wanted taken into consideration. Clearly the door was somewhat open to 'not necessarily' complying with the deceased wishes! 

We all know from this forum how greed & other negative emotions can kick shockingly in when someone dies. I imagine there may be occasions when a disagreement arises & it all turns ugly & protracted, though not in our case but the trustees were talking about £273k & some people have families who aren't going to simply let that go, whatever the deceased wishes were at the time of nomination.

I hope this isn't intended to be a DiY will, because a solicitor is best placed to advise on achieving what you want to achieve &  avoiding any pitfalls.

CharlieC2210

Flugelhorn said:

I think some of these are considered to be "outside the estate" if you nominate people on the pension / life insurance forms - that person should get the full amount subject  to the trustees agreeing and the money won't be part of the estate. expenses are covered from the rest of the estate 

Thanks. By, ‘should’, do you mean morally? And why is it subject to the trustees? Does this mean the trustees can legally ignore the wishes of the testator, as set out in the pension, and in the insurance policy, and give them to someone else? Anyone else? Themselves? 

Are pensions and life insurance policies only considered to be outside of the estate if people have been nominated on them?

If noone is nominated on them are they considered part of the estate?

If they are outside of the estate why do the trustees have any say in what happens to them?

“expenses are covered from the rest of the estate”

Can I stipulate which part of the estate that the expenses are paid from? Or do the expenses have to be paid first, then the remainder divided up?

I was thinking I would leave my home and insurance policy and bank accounts to one person; and my pension to someone else; with the instruction that my funeral expenses, debts, bills, etc, etc to be paid from the insurance policy money. Does it not work like that? 

 

CharlieC2210

Sea_Shell said:

Flugelhorn said:

I think some of these are considered to be "outside the estate" if you nominate people on the pension / life insurance forms - that person should get the full amount subject  to the trustees agreeing and the money won't be part of the estate. expenses are covered from the rest of the estate 

This.

But for assets that do fall within the estate, specifying things that you might no longer own when you pass, can cause those bequests to fail.

Houses, cars, named accounts etc.

Thanks. If I specified something that I no longer owned to go to someone that bequest would fail anyway, no? How can someone get something that wasn’t mine?

CharlieC2210

SevenOfNine said:

Flugelhorn said:

I think some of these are considered to be "outside the estate" if you nominate people on the pension / life insurance forms - that person should get the full amount subject  to the trustees agreeing and the money won't be part of the estate. expenses are covered from the rest of the estate 

"Should" correctly written in bold italics!  The trustees of a pension & death in service payment didn't automatically pay out to the nominated person the deceased had chosen on their form completed 3 years previously. The money was indeed "outside of the estate".

The trustees approached us first (as executors &, by default, estate beneficiaries, no will) & asked if there was anything we wanted taken into consideration. Clearly the door was somewhat open to 'not necessarily' complying with the deceased wishes! 

We all know from this forum how greed & other negative emotions can kick shockingly in when someone dies. I imagine there may be occasions when a disagreement arises & it all turns ugly & protracted, though not in our case but the trustees were talking about £273k & some people have families who aren't going to simply let that go, whatever the deceased wishes were at the time of nomination.

I hope this isn't intended to be a DiY will, because a solicitor is best placed to advise on achieving what you want to achieve &  avoiding any pitfalls.

Thanks. Who were the trustees of the pension? And why didn’t they automatically pay out to the nominated person? Why aren’t they legally bound to do so? I take it the deceased hadn’t also mentioned who was to receive the pension in the Will?

What could have been taken into consideration?

It’s not going to be a DIY Will, thanks, but I do want to find out as much as possible before approaching a solicitor.

 

 

Flugelhorn

When it comes to paying out pensions / insurance they are outside of the estate and hence not liable for inheritance tax etc - they have to be held in trust so presumably have trustees. I think the trustees only get involved in deciding where the money goes if the directions are "odd"
 eg we completed pension nomination forms years back, OH queried that fact that it was at trustees discretion and was told that a nomination to the woman up the road might cause problems if there was a widow and young children dependent on him   


there was a case on here where a woman's partner was killed and they had a large joint mortgage that she could not manage alone - his DiS nomination forms done a little while back named his parents as beneficiaries, this would be the sort of case where the trustees might see that the person who was financially dependant might have a greater need for the money


Re your questions about the estate - basically everything is put into one pot and the expenses paid out of that and then it is divided up - the house &  bank accounts would basically be the estate and the expenses would be paid out of that 

Annisele

CharlieC2210 said:

Thanks. By, ‘should’, do you mean morally? And why is it subject to the trustees? Does this mean the trustees can legally ignore the wishes of the testator, as set out in the pension, and in the insurance policy, and give them to someone else? Anyone else? Themselves?

Not to anyone else, no. Pensions are always held in trust, and there's a whole bunch of law and regulations setting out how the trustees should behave. But the fact the pension is held in trust means it isn't part of the deceased's estate, and it doesn't pass according to the will. There's no "testator" in working out what should happen to the money.

Put another way, you're not the legal owner of the money in the pension. You're the beneficial owner - meaning that the money is for your use - but the money isn't held in your name, and you can't do whatever you want with it. That's the deal with pensions; lots of tax benefits, but in exchange there are restrictions on what you can do.

In practice, on a pension member's death the trustees will pay the money to the person the deceased nominated unless there's a good reason not to. Examples of good reasons: you join the pension scheme and name your wife to receive the death benefits, then die 30 years later having divorced your first wife 29 years previously - leaving your second wife and your young children bereaved and penniless. Keep your expression of wish forms up to date!

CharlieC2210 said:

If they are outside of the estate why do the trustees have any say in what happens to them?

Because there are (at least) two sets of trustees. There will be the trustees of the pension scheme (who deal with the pension money), and the trustees/executors of the will (who deal with the property in the estate). It's very, very unsual for those to be the same people.

The reason I say "at least" two sets of trustees is that life assurance policies are sometimes held in trust and sometimes not. There are often good reasons (tax and otherwise) for life assurance to be held in trust. But if they are in trust, they fall outside the estate and the will is irrelevant to what happens to them.

TBagpuss

Flugelhorn said:

When it comes to paying out pensions / insurance they are outside of the estate and hence not liable for inheritance tax etc - they have to be held in trust so presumably have trustees. I think the trustees only get involved in deciding where the money goes if the directions are "odd"
 eg we completed pension nomination forms years back, OH queried that fact that it was at trustees discretion and was told that a nomination to the woman up the road might cause problems if there was a widow and young children dependent on him   


there was a case on here where a woman's partner was killed and they had a large joint mortgage that she could not manage alone - his DiS nomination forms done a little while back named his parents as beneficiaries, this would be the sort of case where the trustees might see that the person who was financially dependant might have a greater need for the money


Re your questions about the estate - basically everything is put into one pot and the expenses paid out of that and then it is divided up - the house &  bank accounts would basically be the estate and the expenses would be paid out of that 

This. For instance, I don't have any children so I have named my niblings as the beneficiaries for my pension. If I were to get married and/ or have a child, but didn't update that information, then my hypothetical spouse or child might apply to ask the trustees to use their powers to pay the death benefits to them instead of my niblings .

Similarly, if someone had divorced but failed to update the nomination, their children or second spouse  might apply to ask that the death benefits should go to them rather than the ex-spouse.

For a will, if you have a will while you are married,  and  you then divorce, then any gift to the (ex) spouse fail, the will is reads as if the spouse died on the ate the divorce was made final, but I don't believe that necessarily happens automatically for things like pensions or life insurance 

BooJewels

I recently claimed my late husbands assorted pensions and life insurance and had to fill in forms giving details of his family members and their ages etc. and tick whether they were financially dependent on the deceased.  Presumably to ensure that there was no family member left destitute and more worthy than myself, even though he nominated me and actually rang them all a month or so before he died to ensure the expression of wishes was in place.