Death in service dispute

[richie1966]

Hi
My father recently passed away and left no will. He was living with a woman for over ten years. He passed away at work and was entitled to 'death in service' money of 20,000 pounds. He had named this lady down as his next of kin and of course the money has been sent to her. My question is 'am i entitled to any of this money as there is no will?'
Thanks in advance

[EcclesCake]

I'm speaking from personal experience and don't if it is applicable beyond the Civil Service.

I had to nominate a beneficiary to receive my Death in Service benefit. It was quite separate from NOK, which is more about who to contact in emergency than anything else.

[dzug2]

If he had nominated the lady to be the recipient of his death in service grant then it falls outside his estate. The trustees of the scheme do have the discretion to pay someone else - but given that the lady was (presumably) dependent on him (and you presumably were not) they are unlikely to do so.

[joko]

next of kin is not a legal term or position - anyone can be your next of kin - neighbour, milkman etc if you choose them... it is just the person you nominate to be contacted in case of emergency.

i would imagine you may be entitled to some -though if you were pretty much estranged from your father i would you might struggle to show you deserve any

[buildersmate]

"i would imagine you may be entitled to some" - No, Joko, not correct. I wholly agree with Dzug.

These death-in-service benefits are constructed in this way to avoid any benefit paid out going straight into the estate of the deceased, when it would count in the value of the estate for IHT purposes. Many such employee benefits are for 4x or even 5x salary - which ends up easily as a six-figure sum for employees, and hence significant against the nil band of £325k for IHT purposes.

By constructing the wording the way it is, the employee can nominate whoever he/she wishes and the payment falls outside the value of the estate.

[starone]

However, if there was no will you would probably be entitled to anything else he owned, unless the woman he lived with has her name on it. Is his estate worth fighting over? Did he own the house for instance?

[joko]

my point was, he has as much right as she has to the cash - assuming there are no other instructions etc ... it is purely circumstantial that they sent the money to her... assuming he didnt actually tell them to

[Prudie]

I would suggest he did not name this lady as his 'next of kin' but rather his 'nominee for death benefit' so it would have rightly gone to her, nothing to do with his estate. I'm not sure but would think the only time this benefit forms part of the estate is if no nomination had been made.

[woofgang]

not so joko. If the death in service benefit conditions are set up to go to a nominated person then it will ONLY go to that nominated person. I am guessing that the OP's father named his lady friend by name, not just as "whoever is my next of kin at the time" As buildersmate says, this puts it outside of the estate and therefore outside of estate distribution law. Assuming that this is the case then they didn't send it to her circumstantially and the OP has no right to it.

[factor-fiction]

Yes, pension funds ask you to nominate someone to receive the death benefit, so that is what will have happened here, I'm sure.
I think the term 'next of kin' is a red herring unless you are saying that the pension fund specifically used this term

[flip_flop]

The OP states "He had named this lady down as his next of kin..."

She was named as the beneficiary - so that's it.

[mikey4444]

Most of the replies to this query seem to be on the right lines. I was a financial adviser until retirement 4 years ago.

We were always taught hat DISB, Death in Service Benefit was a "bolt-on" to an Occupational Pension Scheme. It was usually a multiple of annual salary. Members of the Pension Scheme were asked to nominate someone to receive this DISB, in the event of that person dying before retirement. It was usually the NOK but not always so. It could be anyone. It was left up to the Member who to nominate. The Trustees are not allowed to interfere with the Members choice, although a Pension Scheme that is managed properly would have reminded Members at regular intervals, to check that the nomination was still correct.

The important thing to remember concerning DISBs is that ::

1 DISB is non-taxable
2 The Trustees of the Pension Scheme are not "honour-bound" to go along with what the Member had first declared. They have discretion in who to pay the money too. This was because many years would normally elapse between making the DISB declaration, and its pay-out in the event of an early death. The Members circumstances may have changed and the origonal nominee may not be still alive, for instance. If the payout had not been discretionary, than how could the DISB be given to a dead person ?

In the event of a Nominated Person being dead, or unable to be traced, than the Scheme would normally approach the NOK, and proceed from there.

You are able to register a complaint to the Trustees, if you think that the payment to The Other Woman was wrong, but it is unlikely that they will change anything, unless there is just cause.