Are premium bonds automatically paid to spouse after death?

onejontwo

As we have decided now is the time to get our finances in order, one question that occurred was....as I have premium bonds in my name (as we can't have a joint one) if I suddenly died would these bonds automatically go to my wife as part of my estate or would I have to update my will (which states that she's entitled to anything of mine anyway) to specifically state that the bonds become hers?

Brie

a quick google gives me this.... (which all sounds like good news to me!!)

Premium Bonds are a type of savings product offered by NS&I that can win cash prizes. When the owner of Premium Bonds dies, the executor or beneficiary of their estate has two options12:

• Claim the Premium Bonds immediately and include them as part of the estate value1.
• Keep the Premium Bonds in the deceased's name for up to 12 months, during which time they are still eligible for the prize draw123. This could result in more money, but it also delays the inheritance.

What to do if an NS&I customer has died | Help | NS&I (nsandi.com)

gm0

My understanding is that these bonds are just like other cash and ISA and savings accounts (but not pensions) in that they are part of your estate. 

The executor of your will - will need to liquidate and move money to the beneficiaries (in your case the spouse)  assuming that your will says that.  Per Brie links above

They are assets of your estate for IHT assessment. 

So if your will sends all residual assets to your wife - then they don't need calling out specifically in the will.  You can.  But not required. 

Clearly the will and records of your assets need to be clear enough that the executor knows/finds out they exist to include them and sort it.

NSI do not magic this estate + will process away as a special thing unique to PBs.  That approach would cause a bunch of unwanted problems with wills and legacies and offsetting PBs doing something different outside probate and other assets.  It is not how it works.

The most flexible approach is to be clear on who gets what % of your estate.  The wording for spouses in wills has been legally particular to ensure the proper handling of nil-rate IHT at first death.  Your will writer/solicitor or template should provide this aspect.

Then ensure good well weeded records exist of your savings accounts and PBs etc.  Tidy.

Mrs_Z

Just be aware that a probate is likely to be needed if your holdings exceed £5,000.

mattsaze

In my case probate wasn’t needed to claim premium bonds and it was (well) over £5k. We also had a lot of unclaimed prizes that were sent as cheques which was a bit tricky to deal with, but got there in the end. 

onejontwo

mattsaze said:

In my case probate wasn’t needed to claim premium bonds and it was (well) over £5k. We also had a lot of unclaimed prizes that were sent as cheques which was a bit tricky to deal with, but got there in the end. 

So was it a straightforward, contact them, fill a form in, supply necessary documents and that's it?  

mattsaze

onejontwo said:

mattsaze said:

In my case probate wasn’t needed to claim premium bonds and it was (well) over £5k. We also had a lot of unclaimed prizes that were sent as cheques which was a bit tricky to deal with, but got there in the end. 

So was it a straightforward, contact them, fill a form in, supply necessary documents and that's it?  

Exactly that! I only had to send death certificate and proof of ID, if you call them they are very helpful 

bunnygo

as others note, premium bonds are just another form of savings and NS&I will pass their value to the beneficiary on receipt of a grant of probate - if holdings with NS&I are over £5000 then probate will be needed.

There is one choice to make on the death of a bond holder - either cash in the value to be passed on when probate granted, or leave them in the draw for a year after which they will automatically be cashed in. My late father had a final win just before the bonds were cashed in, we decided it was the last gift to my mother.

once cashed in, it is of course up to the beneficiary how to use the money -  they can re-invest in premium bonds or do whatever they want with it.