Non Contentious Request to change SIPP beneficiaries

doodling

Hi,

Capricorn282 said:

Thanks. 

My personal view is that I have no problem with the money going to the children - I actually think it's an ideal outcome. My wife and her sister think differently however ....

The children can't gift the money to their mothers when they're 18 as the will specifies that it will be held in a discretionary trust until they're 25.

[...]

In case this was a response to my post:

The children can gift the money they receive from the SIPP once they reach 18.  That money should not end up in a discretionary trust until they are 25 as it shouldn't be part of the deceased's estate and is therefore not covered by the will.

Marcon

Capricorn282 said:

Thanks Again.

I agree with the comments that the 2 daughters will be effectively pressuring their children to give up their inheritance - even if they convince each other that they aren't.

The chances of any goodwill from the partner are unfortunately slim to nil, with the 2 women having accused him of exerting undue influence on their mother to disinherit them out of spite. I tried to tell them not to ....

Capricorn282 said:

Any other ideas we haven't thought of as to how the grandchildren can gift some of their inheritance to their mum's - other than obviously waiting until their 25th birthdays?

Surely the ideas you need are how best to protect the grandchildren from two unattractively avaricious mothers...?

ProbateNewbie

I thought I'd read on here somewhere that it can't be enforced that a young beneficiary must wait until a particular age to inherit.

Once they are over 18, they are entitled to their inheritance.

Capricorn282

doodling said:

Hi,

Capricorn282 said:

Thanks. 

My personal view is that I have no problem with the money going to the children - I actually think it's an ideal outcome. My wife and her sister think differently however ....

The children can't gift the money to their mothers when they're 18 as the will specifies that it will be held in a discretionary trust until they're 25.

[...]

In case this was a response to my post:

The children can gift the money they receive from the SIPP once they reach 18.  That money should not end up in a discretionary trust until they are 25 as it shouldn't be part of the deceased's estate and is therefore not covered by the will.

Yes my statement was in reply to your post. 

I understand the distinction between the money they will receive from the estate which will be held in trust until age 25 - and the money received from the SIPP which they can access with no restrictions (apart from the income tax liability since MIL was >75 when she passed away. 

The total value of the SIPP is approx 600k, so each grandchild's share approx 150k each. Withdrawing it all in one go and gifting it to their mother would incur a substantial income tax liability, but I suppose doing so other 3 or 4 years much less so, particularly as they'll be at university and have little or no other income at the time. But to Marcon's very valid point IF that really is my children's wish for what they want to do with THEIR money !

Marcon

ProbateNewbie said:

I thought I'd read on here somewhere that it can't be enforced that a young beneficiary must wait until a particular age to inherit.

Once they are over 18, they are entitled to their inheritance.

Not if the 'right' sort of trust has been set up. Too many wills just hopefully specify a 'preferred' age (greater than 18), resulting in a 'bare' trust - and the beneficiaries can indeed apply to access their inheritance once they reach majority.

Keep_pedalling

Marcon said:

ProbateNewbie said:

I thought I'd read on here somewhere that it can't be enforced that a young beneficiary must wait until a particular age to inherit.

Once they are over 18, they are entitled to their inheritance.

Not if the 'right' sort of trust has been set up. Too many wills just hopefully specify a 'preferred' age (greater than 18), resulting in a 'bare' trust - and the beneficiaries can indeed apply to access their inheritance once they reach majority.

And the reason for that is that a discretionary trust is a pain to manage and is subject to some very high levels of taxation. For most estates it is not a practicable option.  

Capricorn282

Marcon said:

Capricorn282 said:

Thanks Again.

I agree with the comments that the 2 daughters will be effectively pressuring their children to give up their inheritance - even if they convince each other that they aren't.

The chances of any goodwill from the partner are unfortunately slim to nil, with the 2 women having accused him of exerting undue influence on their mother to disinherit them out of spite. I tried to tell them not to ....

Capricorn282 said:

Any other ideas we haven't thought of as to how the grandchildren can gift some of their inheritance to their mum's - other than obviously waiting until their 25th birthdays?

Surely the ideas you need are how best to protect the grandchildren from two unattractively avaricious mothers...?

I don't disagree - in fact I very strongly agree. Please don't misinterpret my asking whether what I suggest is possible as implying that I support it. I'm merely trying to arm myself with the facts !

Frankly I think my wife and her sister are behaving like the 2 Ugly Sisters to their children's Cinderella...... 

BooJewels

I'm actually relieved to read that @Capricorn282 - I was delicately sidestepping making a similar comment myself.  

I think the best thing you can do for your children is to support and educate them in how to handle this money when the time comes - it's a great start to their lives as adults and knowing how to get the best from it will serve them well.

One of my happiest days lately was visiting my son's newly bought first home after my sister and I gifted him quite a large deposit from assorted inherited funds we'd each received.  It felt like a totally perfect and appropriate thing to do with the funds and brings me great joy evertime he sends a photo of something he's done to the house or garden.  I fear that your wife and her sister might not enjoy the same pleasure.  I  think I got a bargain.

Marcon

Keep_pedalling said:

Marcon said:

ProbateNewbie said:

I thought I'd read on here somewhere that it can't be enforced that a young beneficiary must wait until a particular age to inherit.

Once they are over 18, they are entitled to their inheritance.

Not if the 'right' sort of trust has been set up. Too many wills just hopefully specify a 'preferred' age (greater than 18), resulting in a 'bare' trust - and the beneficiaries can indeed apply to access their inheritance once they reach majority.

And the reason for that is that a discretionary trust is a pain to manage and is subject to some very high levels of taxation. For most estates it is not a practicable option.  

The most common reason is that most testators (especially the DIY sort) simply don't know!

pjs493

BooJewels said:

When I got a pay out of my late husband's pension pot and life insurance, even though he'd filled in the expression of wishes form and rang them shortly before he died to ensure that all was in order, they sent me a form to complete, to list all his family members, their ages and whether or not they were financially dependent on him.

So, I suspect the trustees of the SIPP would only consider going against the expression of wishes if it could be proved that someone financially dependent was more worthy of the funds.

I had a similar experience when my husband died. He hadn’t actually designated a beneficiary (he never got around to filling in the paperwork, I found it at the bottom of a pile of papers in his desk). 

His financial advisor sent me a form to fill in. It asked for the details of his spouse (me), our children, and any other potential beneficiaries that the trustees ought to be aware of such as parents, siblings, etc. I filled in my information and that of our children, but didn’t bother adding his parents or sibling. The trustees decided that it should go to me. 

It was clearly a paperwork exercise in my case, but if we’d been unmarried/divorced/separated it would have been divided between the children, if we didn’t have any children it would have likely gone to his parents. But given that we’d been happily married for quite a while and had two legitimate children I didn’t see the point in writing every single person who could possibly be a beneficiary in the form. My husband’s financial advisor knows his parents and seemed happy that I hadn’t added their details to the form. He also suggested it was simply a paperwork exercise. I suspect my husband hadn’t prioritised filling in the form because he knew I’d automatically inherit if anything were to happen to him. 

He hadn’t nominated anyone on his workplace pension and death in service benefit either, but myself and the children automatically got a pension each and I received his death in service benefit. He knew that we’d automatically stand to get it, I think he would have been a bit more hot on it if we were unmarried or if he’d wanted to exclude me for some reason. 

I know a friend who deliberately added his niblings as beneficiaries during an acrimonious divorce to ensure his soon-to-be ex-wife didn’t get anything in the event that something happened to him before the decree absolute was issued. 

All that being said, as someone else has mentioned, the mother had an opportunity to change things. Unless there are financial reasons why the sisters need the money, I think they’d be better off leaving the grandchildren to inherit.