Father's Pension Policy

[pipsaholic]

Hello,

I got a pension savings pack from my father now passed away for a large sum. The policy seems legit with a policy number, its a defined contribution policy and it has payable before death of pension age.

I thought the lawyer dealt with all his affairs turns out he didn't.

So, what does the law say on pension savings for someone who has deceased do the next next of kin, children inherit it just like property rules of intestacy?

Thanks.

[ostell]

Unless there was a defined person who would benefit it would be part of the estate and distributed according to the will.

[Peridot]

Hi Pipsaholic,

I am sorry for your loss. I'm afraid there's a few questions first before we can point you in the right direction.

Did your father leave a Will? You will often find that pension savings and the like, the person paying into the pension is able to 'nominate' who would receive any sum payable. The pensions savings plan provider would be able to advise you if this was the case, although I suspect they would not have provided you with the sum if there had been a nomination attached to the plan (unless you had been nominated of course) Were you the executor?

As far as dealing with the sum of money, if your father made no nomination to the pension savings plan and he

had a Will, then it would go to the residue of the estate to be divided equally between any residuary beneficiaries (once debts and testamentary expenses are paid). If there is no will then the sum again will go to the residue to be divided equally between those due to inherit under the intestacy rules.

Pensions are generally free from inheritance tax. Was any inheritance tax due on your father's estate? If it was then usually pensions would be declared on the IHT400 (completed to obtain the Grant where the estate will be paying inheritance tax or there are foreign assets for example)? It may be necessary to complete a corrective account for HMRC and we can point you in the right direction if this is needed. It is a straightforward form and once submitted HMRC will confirm whether there is any more tax to pay whether that is inheritance or income etc.

Was

the lawyer made aware of the pension or is this something that has only recently been found to exist? If the lawyer was not made aware of the pension by being given the details by the executor/family then there is little you could expect them to do. If however they had been provided with the information and had not followed it up or it had been missed, then I would suggest you contact them and get them to deal with this. You should negotiate any fee quite firmly I would suggest if this is their error. However if there was no way they could have known and they had never been provided with th information, then you can't expect them to deal with this for nothing I'm afraid.

Do be aware that as executor or administrator (where there isn't a Will) your responsibilities continue even after you believe the estate has been administered and distributions have been made, so it is important to deal with this unexpected sum correctly and to inform the necessary authorities if need be. You can always contact HMRC whose details are here:-

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/probate-and-inheritance-tax-enquiries If an IHT400 inheritance tax form was completed the executor should also have a copy of this on which there will be a number. The executor needs to deal with this and contact HMRC quoting the IHT number if they had one.

[des8]

I doubt there is any more advice than that received from MSE

[pipsaholic]

There was no will. It doesn't mention on the policy paperwork the next or kin or nomination. It does mention it will pay out if death happens before retirementment age which is 55 according to this company which is strange. It mentions no tax to pay if policy cashed out fully before aged 75. The lawyer wasn't told about it by myself when dealing with his estate.

I ask on different forums as you get different angles of expertise.

[des8]

Wasn't criticising, just commenting

[Peridot]

Hi Pipsaholic,
so any distribution will be as per the intestacy rules. On the final statement they should say if tax has been paid if necessary. You need the closing statement from the company to check this.
Do call the IHT/HMRC helpline if needs be.
Hope that helps.

[sloane82]

Hi Sorry to hear about the loss have a look through all the documents and phone up the company ask the citizens advice bureau about this, and ask for a subject acess request you may have to pay £10 ask for all the information.

[pipsaholic]

It does mention in the event of a death it would go to beneficiaries its a defined pension savings plan. They asked me if he left a will and if I was financially dependent on my father? She also asked if you or his spouse would be the beneficiaries? She also asked me to send out a copy of his death certificate. Unsure if the value will change as his registered date was 2013.

[Peridot]

Hi Pipsaholic,

Don't worry they are doing everything they should be just checking who should be entitled to the fund. They will send you any relevant information and confirm whether this is passing outside the estate (which I suspect it will) In which case any beneficiary will have the tax issues personally not the estate.

They are just making the decisions who should receive the fund.

[pipsaholic]

Hi, I guess it will be either myself or my mother who will receive the funds rather than the government? Do all children get a share if it goes to 1 of the children who is the executor? How can you prove you are the executor?

[Peridot]

I would expect them (if it goes outside the estate so to speak) to give it to your mother even if this is via you as the executor, but they will confirm I'm sure.