Death in service benefit and the effects on UC

peteuk

DE_612183 said:

If the money ( all except ) £16k is paid into a trust for the children when they reach 18, or a pension in his name - does UC still stop, or does it stop and then restart?

If a will states this then the monies in theory are part of the estate, so wont stop UC.  In this case as its not in the will, so for the husband/father to then put it into a trust would be seen as DoC.  You cant give it away, as UC will see it as still yours regardless of how it’s treated.  They will then still treat the claimant as having the monies until they believe it is down to the £16K.  This is based on the average cost of living. So there will be no reclaiming of UC until they have agreed the monies “given away” have naturally been spent. 

andrewmp

Life insurance etc is paid outside of a will to the nominee, this means had she had a will it would not have made a difference.

Is it possible he could set up child isas as per his wife's wishes? Obviously it could be seen as deprivation of capital if it was done for the purpose of claiming more benefits, but if he was just carrying out his wife's wishes then that might not, on balance, be his intention.

Probably a huge risk though as he would get no help at all if they ruled against her.

tls123

If he privately rents he might be better trying to get LA housing private rents tend to be very expensive and not always a stable option. If he manages part time employment long term using the death in service towards a deposit could be a good idea to look for his own property. He needs to ask his UC case manager there rules on allocating some of it to his children if that is an option. 

silvercar

Death in service payments are made in trust. The company can choose who to pay this out to. Informing the company that his late wife wished for the money to go for the children’s future could be readily agreed by the trust. If the trust did agree to honour her wishes then the trust would make the payment into a trust for the children. As such there would be no deprivation of assets as it is the trust making the decision where to pay the money. The husband isn’t involved in the trust’s decision.

HillStreetBlues

silvercar said:

Death in service payments are made in trust. The company can choose who to pay this out to. Informing the company that his late wife wished for the money to go for the children’s future could be readily agreed by the trust. If the trust did agree to honour her wishes then the trust would make the payment into a trust for the children. As such there would be no deprivation of assets as it is the trust making the decision where to pay the money. The husband isn’t involved in the trust’s decision.

I agree, as the trustees make the decision where the money goes it can't be DoC if the trustees decide to pay it to the children.

kaMelo

silvercar said:

Death in service payments are made in trust. The company can choose who to pay this out to. Informing the company that his late wife wished for the money to go for the children’s future could be readily agreed by the trust. If the trust did agree to honour her wishes then the trust would make the payment into a trust for the children. As such there would be no deprivation of assets as it is the trust making the decision where to pay the money. The husband isn’t involved in the trust’s decision.

The problem though is that it was perfectly possible to achieve that scenario if the wife had nominated her children to be beneficiaries of the death in service payment, she didn't do so. Instead she had nominated her husband as beneficiary. Whilst it's correct that the trustees have discretion over payment they don't have a free hand, they have to have a very good reason not to follow the nominated wishes of their member, a reason they could defend in court if subjected to legal challenge.

HillStreetBlues

kaMelo said:

The problem though is that it was perfectly possible to achieve that scenario if the wife had nominated her children to be beneficiaries of the death in service payment, she didn't do so. Instead she had nominated her husband as beneficiary. Whilst it's correct that the trustees have discretion over payment they don't have a free hand, they have to have a very good reason not to follow the nominated wishes of their member, a reason they could defend in court if subjected to legal challenge.

Would the DWP even have the power to appeal? Judges tent not to overturn Trustees decisions unless there is a very good reason. A statement of wishes is just that, so can't be solely based on that. If a would be beneficiary isn't the one challenging not receiving the money and the Trustees agree  that any money is better off with the children I don't see a judge making a ruling on what's best for the DWP.

kaMelo

I would assume the power to mount a legal challenge would be restricted to an interested party, in this case the husband or his representative. I doubt the DWP could challenge anything.
Whether or not the husband would mount a legal challenge has no bearing in any decision the trustees make and any decision they do make needs to be done so under the assumption it may be challenged. So they need to able to defend their decison in court. It's also important to understand that although it is possible for trustees to exercise their discretion not to follow their members expression of wishes, it happens very rarely.

In the OP's case the trustees should have taken into account the family circumstances and decided to follow their members wishes. One way to force the trustees to make a different decision would be for the husband to have rejected any pension benefits. The trustees may then choose to do as hoped, and pay the pension benefits directly to their members children, but they could also make a different decision such as paying it into their members estate to be distributed according to their will. Or they could choose something else, either way it's a risk as there is no way of knowing what decison they would make and the husband cannot direct them to make a certain decision.

silvercar

kaMelo said:

I would assume the power to mount a legal challenge would be restricted to an interested party, in this case the husband or his representative. I doubt the DWP could challenge anything.
Whether or not the husband would mount a legal challenge has no bearing in any decision the trustees make and any decision they do make needs to be done so under the assumption it may be challenged. So they need to able to defend their decison in court. It's also important to understand that although it is possible for trustees to exercise their discretion not to follow their members expression of wishes, it happens very rarely.

In the OP's case the trustees should have taken into account the family circumstances and decided to follow their members wishes. One way to force the trustees to make a different decision would be for the husband to have rejected any pension benefits. The trustees may then choose to do as hoped, and pay the pension benefits directly to their members children, but they could also make a different decision such as paying it into their members estate to be distributed according to their will. Or they could choose something else, either way it's a risk as there is no way of knowing what decison they would make and the husband cannot direct them to make a certain decision.

It’s a no-lose risk. Either they insist on paying to the husband, in which case the situation would be as if the request hadn’t been made, or they direct to the kids as requested.

Silvertabby

silvercar said:

kaMelo said:

I would assume the power to mount a legal challenge would be restricted to an interested party, in this case the husband or his representative. I doubt the DWP could challenge anything.
Whether or not the husband would mount a legal challenge has no bearing in any decision the trustees make and any decision they do make needs to be done so under the assumption it may be challenged. So they need to able to defend their decison in court. It's also important to understand that although it is possible for trustees to exercise their discretion not to follow their members expression of wishes, it happens very rarely.

In the OP's case the trustees should have taken into account the family circumstances and decided to follow their members wishes. One way to force the trustees to make a different decision would be for the husband to have rejected any pension benefits. The trustees may then choose to do as hoped, and pay the pension benefits directly to their members children, but they could also make a different decision such as paying it into their members estate to be distributed according to their will. Or they could choose something else, either way it's a risk as there is no way of knowing what decison they would make and the husband cannot direct them to make a certain decision.

It’s a no-lose risk. Either they insist on paying to the husband, in which case the situation would be as if the request hadn’t been made, or they direct to the kids as requested.

But rejecting the pension wouldn't just be in respect of the lump sum -  the husband would then also lose his widower's pension for life.  This couldn't be re-directed to the children, as they would have their own pension entitlements.