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  • FIRST POST
    • planteria
    • By planteria 13th Jan 19, 4:38 PM
    • 5,097Posts
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    planteria
    Nomination of Beneficiary
    • #1
    • 13th Jan 19, 4:38 PM
    Nomination of Beneficiary 13th Jan 19 at 4:38 PM
    I decided to leave my four Personal Pensions to my two sons, and requested the paperwork to do so. the values are not high, but my thoughts are that if i were to pass away before retirement age i'd like them to become growing pension pots for them, with plenty of time to grow.

    from Royal London the form that has arrived includes two options: Option 1 - At Our Discretion or Option 2 - At My Discretion. i don't think it should make a huge amount of difference, but RL say that choosing Option 1 avoids inheritance tax being payable. also, an investor can choose Option 2 and then choose Option 1 at a later date, but once an investor has chosen Option 1 they cannot then change their mind.

    as it happens I have a Bond, a small ISA and a Flexible Savings Plan which I am looking to allocate to my sons too - choosing to allocate an investment to one of them, rather than for each to be split between them. the ISA is with Royal London, so i have a similar form which I could use for this - i think (they haven't mentioned the ISA in their covering letter, but they've sent me two forms).

    any thoughts as to the best Option?
Page 1
    • dunstonh
    • By dunstonh 13th Jan 19, 4:59 PM
    • 97,619 Posts
    • 65,759 Thanks
    dunstonh
    • #2
    • 13th Jan 19, 4:59 PM
    • #2
    • 13th Jan 19, 4:59 PM
    ISAs form part of your estate and will follow instructions laid out in your Will.

    Pensions are outside the estate. Option 1 is best as that keeps it tax free on death before 75.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • planteria
    • By planteria 13th Jan 19, 5:39 PM
    • 5,097 Posts
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    planteria
    • #3
    • 13th Jan 19, 5:39 PM
    • #3
    • 13th Jan 19, 5:39 PM
    thank you dunston..

    so perhaps their second form was a mistake.

    and understood, but is there any circumstance in which someone might specify 'My' not 'Our(Their)' discretion?
    • kidmugsy
    • By kidmugsy 13th Jan 19, 6:14 PM
    • 12,480 Posts
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    kidmugsy
    • #4
    • 13th Jan 19, 6:14 PM
    • #4
    • 13th Jan 19, 6:14 PM
    is there any circumstance in which someone might specify 'My' not 'Our(Their)' discretion?
    Originally posted by planteria
    If you died with your only close kin a sibling you hated, you might not want the trustees to assume that that was a sensible place to pay the money. So you could specify a Donkey and Tortoise Charity if you wanted.

    (Note: this is not necessarily an allusion to Mr Corbyn and Mrs May.)
    Free the dunston one next time too.
    • planteria
    • By planteria 14th Jan 19, 8:40 PM
    • 5,097 Posts
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    planteria
    • #5
    • 14th Jan 19, 8:40 PM
    • #5
    • 14th Jan 19, 8:40 PM
    thank you km..

    Pensions are outside the estate. Option 1 is best as that keeps it tax free on death before 75.
    Originally posted by dunstonh
    .. does that include the pension being transferring to one of my sons as a pension, ie. becoming his own pension pot?
    • Brynsam
    • By Brynsam 14th Jan 19, 10:38 PM
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    Brynsam
    • #6
    • 14th Jan 19, 10:38 PM
    • #6
    • 14th Jan 19, 10:38 PM
    thank you km..



    .. does that include the pension being transferring to one of my sons as a pension, ie. becoming his own pension pot?
    Originally posted by planteria
    Yes, it does.
    • planteria
    • By planteria 15th Jan 19, 1:33 PM
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    planteria
    • #7
    • 15th Jan 19, 1:33 PM
    • #7
    • 15th Jan 19, 1:33 PM
    thank you.. how can we specify that that is what we want to happen, via a will, or with the pension provider? or does a pension pot never just transfer into an inheritable estate?
    • HappyHarry
    • By HappyHarry 15th Jan 19, 2:36 PM
    • 910 Posts
    • 1,334 Thanks
    HappyHarry
    • #8
    • 15th Jan 19, 2:36 PM
    • #8
    • 15th Jan 19, 2:36 PM
    thank you.. how can we specify that that is what we want to happen, via a will, or with the pension provider? or does a pension pot never just transfer into an inheritable estate?
    Originally posted by planteria

    If you give guidance to the pension provider (option 1) via an expression of wishes / nomination of death beneficiaries, then in the event of your death the value of your pension remains outside of your estate, and is not counted for inheritance tax purposes. Pension providers invariably follow the expressed wishes of the deceased, unless there is very good reason not to. (e.g. divorce and remarriage since form completed).


    If you insist with the pension provider who your pension goes to (option 2) then your pension funds will form part of your estate for inheritance tax purposes.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
    • planteria
    • By planteria 20th Jan 19, 1:20 PM
    • 5,097 Posts
    • 1,141 Thanks
    planteria
    • #9
    • 20th Jan 19, 1:20 PM
    • #9
    • 20th Jan 19, 1:20 PM
    thank you HH. i hope not to die any time soon.. but i am just trying to get things set up as a i want them regardless. a small pension pot for the future for each of the boys (they are only 1 and 2) seems like a good idea to me.
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