Does a pension without a nominated beneficiary form part of estate?

Marcon

MEM62 said:

Marcon said:

MEM62 said:

@Marcon I have just checked the guidance notes that I was given when I assumed the role of trustee for our company scheme.  There are no scenarios detailed in the guidance that would cause a pension to be drawn into a deceased estate.  In fact, the guidance is very clear that it sits outside it. 

    

@MEM62

Normally it does, but paying lump sums to the personal representatives is the ultimate fall back if there are no other options open to the trustees. It's a point many people (including advisers) overlook or simply misunderstand largely because it's quite rare. Guidance notes for a novice trustee can't be expected to cover all scenarios!

It is also possible for a member to nominate their personal representatives as the recipient of any lump sum benefits (which can be handy when it comes to paying IHT before assets such as a property can be sold).

Provided the payment is made at the discretion of the trustees, any payment to the estate is still not subject to IHT (even if the estate is at IHT-able levels).

As always, these things are subject to scheme rules as well as HMRC regs.

Every day is a school day 

Indeed. For all of us!

Albermarle

Clairre40 said:

Thank you so much. I think they're defined contribution schemes and, as the person was in their thirties, the values are quite small. 

There weren't enough assets to cover the funeral. I've offered to pay the debt as it's such as small amount and I want them to go away, but they wouldn't take payment unless I confirmed it was coming from the pensions.

This is rather strange that they are insisting on this. Is it because they know the estate has no money so normally they would not get paid? I think they are on legal shaky ground.

MarkCarnage

You shouldn't have to pay this. If there isn't enough money from the estate then that's just tough for them. I think that Sky can manage without the £65 nor should they keep pursuing for it. 

squirrelpie

Albermarle said:

Clairre40 said:

Thank you so much. I think they're defined contribution schemes and, as the person was in their thirties, the values are quite small. 

There weren't enough assets to cover the funeral. I've offered to pay the debt as it's such as small amount and I want them to go away, but they wouldn't take payment unless I confirmed it was coming from the pensions.

This is rather strange that they are insisting on this. Is it because they know the estate has no money so normally they would not get paid? I think they are on legal shaky ground.

Maybe they are trying to stay strictly within the law and haven't pointed out that in most circumstances the pension isn't part of the estate, but in the event that it does become part of the estate then they will accept payment from the estate? And need it confirmed that the payment has come from the estate.

Seems a rather complicated hypothesis. I'd still involve a newspaper myself.

Marcon

squirrelpie said:

Albermarle said:

Clairre40 said:

Thank you so much. I think they're defined contribution schemes and, as the person was in their thirties, the values are quite small. 

There weren't enough assets to cover the funeral. I've offered to pay the debt as it's such as small amount and I want them to go away, but they wouldn't take payment unless I confirmed it was coming from the pensions.

This is rather strange that they are insisting on this. Is it because they know the estate has no money so normally they would not get paid? I think they are on legal shaky ground.

Maybe they are trying to stay strictly within the law and haven't pointed out that in most circumstances the pension isn't part of the estate, but in the event that it does become part of the estate then they will accept payment from the estate? And need it confirmed that the payment has come from the estate.

Seems a rather complicated hypothesis. I'd still involve a newspaper myself.

What on earth for? And at £65 it's hardly a hot story.