Legacy preservation trust

Ziggyismad

This may have been discussed but need clarity please. I'm with SJP and they asked me to do another expression of wish so my pension goes to my two children. Simple. However the new form is not simple and it appears that SJP do not have to follow my expression of wish. So I queried and now they say I need to do a Legacy preservation trust to ensure the money does go to my two children, quickly and correctly. I'm not sure of this advice. It's my pension, so how can SJP not go along with my expression of wish when I pass away? are they spinning me a fast one?

Pat38493

Pensions are technically held in trust and in order to avoid tax liability (IHT etc), it’s important that technically the trustees have discretion over who gets the money.  However I understand that they normally will follow your nomination form wishes unless there is some major issue (e.g. you got divorced and re-married and forgot to change the form or whatever - and even then they might follow the form as I’m aware of a local case where that happened).  I.e. it does not mean that they can just give the money to whoever they feel like - they have to act in accordance with what they think would be your interests.

dunstonh

 However the new form is not simple and it appears that SJP do not have to follow my expression of wish. 

That is normal.   By leaving it discretionary, you avoid potential tax issues.

So I queried and now they say I need to do a Legacy preservation trust to ensure the money does go to my two children, quickly and correctly. I'm not sure of this advice.

What special circumstances do you have that means you shouldn't use a method that is suitable for 99% of the population?

 It's my pension, so how can SJP not go along with my expression of wish when I pass away?

Who says they won't go along with it?    Is your expression of wish malicious or complicated?  i.e. do you have a spouse/children but have chosen to nominate Mrs Scarlet, your weekend friend down the road?

are they spinning me a fast one?

Not with the expression of wish but legacy preservation trust may be unnecessary but that could all be down to you pushing them to make a binding nomination (when it is likely to be unsuitable and unnecessary)

Marcon

Ziggyismad said:

This may have been discussed but need clarity please. I'm with SJP and they asked me to do another expression of wish so my pension goes to my two children. Simple. However the new form is not simple and it appears that SJP do not have to follow my expression of wish. So I queried and now they say I need to do a Legacy preservation trust to ensure the money does go to my two children, quickly and correctly. 

They'll be the ones taking the decision so why not ask them why an EOW form isn't adequate for them to make a decision quickly and correctly? Works for most of the population, as dunstonh says.

Pat38493 said:

Pensions are technically held in trust and in order to avoid tax liability (IHT etc), it’s important that technically the trustees have discretion over who gets the money.  However I understand that they normally will follow your nomination form wishes unless there is some major issue (e.g. you got divorced and re-married and forgot to change the form or whatever - and even then they might follow the form as I’m aware of a local case where that happened).  I.e. it does not mean that they can just give the money to whoever they feel like - they have to act in accordance with what they think would be your interests.

Er - no. Dead people don't have any interests! That isn't one of the guidelines for taking a decision about death benefits. 

Pat38493

Marcon said:

Er - no. Dead people don't have any interests! That isn't one of the guidelines for taking a decision about death benefits. 

But I assume that as trustees, there must be some rules or guidelines that they are obliged to follow, otherwise they could just decide to give the money to themselves and nobody could do anything about it.

Ziggyismad

thanks everyone but would not just an expression of wish form be sufficient. monies just being split 50/50  between 2 children. no complications etc. this has been sufficient before i went to SJP

Malthusian

Pat38493 said:

But I assume that as trustees, there must be some rules or guidelines that they are obliged to follow, otherwise they could just decide to give the money to themselves and nobody could do anything about it.

Yes - they are governed by the pension scheme rules, and the general duties of trustees to act legally, fairly and reasonably. 
Your post wasn't that wrong as pension trustees will consider what the member would have wanted as their starting point. Which is normally and hopefully in the expression of wish, but not always (especially if the member had a major life event - death, new children etc - and didn't bother to update the EOW).

Ziggyismad said:

thanks everyone but would not just an expression of wish form be sufficient. monies just being split 50/50  between 2 children. no complications etc.

Based on your posts the answer is generally "yes".
However you are advised by St James's Place, which suggests you have a penchant for unnecessarily expensive and complicated solutions.

Pat38493

Ziggyismad said:

thanks everyone but would not just an expression of wish form be sufficient. monies just being split 50/50  between 2 children. no complications etc. this has been sufficient before i went to SJP

Unless I’m mistaken, it’s always been the case in all or almost all pension providers that expression of wish forms are enacted at the discretion of the trustees - you just probably didn’t realise it up to now.  As explained by multiple posters above, unless you are in an unusual situation, then yes an expression of wish form should suffice and the legacy preservation trust will probably cost you a lot of money to set up to achieve something that would happen anyway.

As said by others I think the only issue would be if your expression of wish is highly unusual e.g. you have fallen out with one child and you want it to only go to the other one or something like that.  Even then if you had a covering letter explaining your reasoning it would probably still work.

FWIW - I am using expression of wish forms on all my pension assets - I don’t see a need to go beyond that.