Death, Taxes and Change – are your nominations up to date?
Nothing in life is certain except death and taxes
The two constant things in life are death and taxes; change is perhaps a third?
Very little ever seems to stay the way it was.
People change jobs and careers much more frequently than was once the case. Wives, husbands and homes can change; the list of things that change is virtually endless. Keeping track of it all requires ruthless discipline!
Many of us change our job several times over the years and accumulate a number of disjointed pension pots along the way. This situation will increase with “Auto-Enrolment” where membership of a pension scheme is compulsory unless you opt out.
With rule changes allowing pensions funds to be passed to spouses and down the generations, it is vital to ensure that in the event of your demise your pension fund goes exactly where and to whom you want.
It is normal when joining a pension scheme to nominate someone to benefit from your funds in the event of your death. Quite often in one’s early working years this could be your parents or siblings.
Change job, join a new scheme, get married and you might want your partner to benefit.
Separate and you might want your children to be the beneficiaries.
Re-marry and you might want your new spouse to be in the frame and so on, constant change.
To ensure your funds go to your chosen beneficiaries, you need to complete an “expression of wishes” or “nomination of beneficiary” form for every pension scheme you have.
The problem is that unless you keep these nominations up to date and update them when your circumstances change, your funds will likely end up in the “wrong” hands. How would your new spouse feel if you died and your pension fund went to your ex because of an out of date nomination form?
The pension fund trustees have the legal say as to who will receive any benefits in the event of someone’s death but if there is a nomination in place they will generally follow it. Legal disputes between potential inheritors are however, becoming ever more common place.
With so many changes in pension rules, tax treatment, investments and lists of potential beneficiaries there has perhaps never been a better time to review your pension schemes.
A review could ensure your funds are right for you and that the people who would benefit in the event of your demise are those you wish to benefit.
If you require help with your pensions please contact me via THP for a chat.
I will be delighted to advise and assist you in any way I can.