The decision as to where these payments will be made is often down to the Trustees of the relevant scheme and they might consider an Expression of Wishes Form or a Nomination Form when making their decision.
What is an Expression of Wishes?
An Expression of Wishes (EOW) form is a document that can be completed by a member of the pension/death benefit scheme telling the scheme administrators who they would like them to pay the death benefits to upon their death.
The EOW form is non-binding so the scheme administrators do not need to follow the wishes and they can exercise their discretion when making their decision. Assuming the scheme administrators follow the wishes set out in the EOW form there are two key associated advantages with putting in place an EOW form:
1. Where an EOW form is in place the value of the pension/death benefits currently does not normally form part of the deceased member estate and so are not subject to Inheritance Tax.
However, in April 2027 pensions will form part of a person’s taxable estate and so financial advice should be taken at the time to determine the impact this might have on your liability to inheritance tax.
2. As the pensions/death benefits do not form part of the deceased member’s estate, a Grant of Representation is not usually required by the scheme administrators in order to pay over the benefits. In most cases the pensions/death benefits can be paid over relatively quickly, in comparison to assets in the deceased member’s estate that do require a Grant of Representation.
Sometimes scheme administrators like to have information about who the beneficiaries of the Will are as this can form part of their decision making process. It is therefore important to make sure that you have a Will in place and that you keep it under review, despite the fact that the pension/death benefits will not pass under it.
For further information regarding later life planning and Wills please contact me on 01283 214231 or via email at legal@timms-law.com.
Alternatively, please visit the Wills & Probate section of our website.
