Life Insurance

[dartagnon]

Hopefully someone can help with the following scenario.
A person died and one member of the family receive a letter from the persons works pension with the following details:
"The total death grant represents 10.02% of the lifetime allowance which is currently 1.5 Million. When added to the LTA % used at retiral, the total LTA used is 33.62%."
My question from the above information is - If there are only 5 remaining members of the family, how much should each person receive?
I'm afraid I don't have any more information other than what's above, but any help would be appreciated.
Thanks in anticipation.

[Buenchico]

If the payment was 'written in trust' then it's only paid to the person named by that trust, who is entitled to all of it. (It doesn't form part of the deceased person's estate)

Otherwise the grant forms part of the deceased person's estate, which must be distributed in accordance with the terms of his/her will. If there was no will the whole of the estate (including the payment referred to in your post) must be distributed in accordance with the intestacy rules:
https://www.gov.uk/inherits-someone-dies-without-will

[fiction-factory]

The best thing to d is check with the pension company what the payment will be (although it's hard to imagine why they didn't quote the figure in some correspondence). On the face of it it looks like it is 10.02% of £1.5 million so that's close to £150000 to be shared out. But it's probably best to wait until the executors get the money then decide on how to divvy it up depending on the terms of the will - although as Buenchico says if it is in trust then it would be due to the named person- and also taking account of any IHT if applicable

[mikey4444]

These things are normally written in a "discretionary" trust, rather than a trust that is written in stone..

The "discretionary" bit gives the Trustees of the Pension Fund, the right to decide who will receive any monies due to the relatives of the deceased. If it wasn't discretionary, than their hands would be tied, if the person named as the beneficiary had died, sometime after the pensioner had made his or her wishes known.

For instance, I have made my next of kin, my next-down Brother, as the beneficiary of my BT Pension, but he dies, before I do, then the Pension Trustees would need to contact my next, next-of-kin, and then decide what to do.

I wouldn't take to much notice of the LTA bit. If you are one of those 5 remaining people, than the deceased next-of-kin should contact the Pension Trustees. They will have to prove that they are bona fide of course.

Let us know how you get on ....we love feedback here on AB and it will be of help to others in your position !

[fiction-factory]

The LTA bit is relevant though to the extent that it seems to indicate the death grant from this scheme is close to £150,000.

[woofgang]

I have got a slightly different take on this from my experience of my late husband’s works pension. He was only allowed to nominate a spouse or partner to receive a part (not all) of his pension when he died. The "death grant” which I also received from them was discretionary in that there is a documented calculation for the minimum amount that the bereaved spouse or partner should receive as well as the pension. It is at the pension trustees’ discretion to decide to pay more than this, which, in my case, they did. IIRC, the “lifetime allowance" thing is about how much a person can receive from their pension tax free....I go to google......
yup I kind of remembered it right
http://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/pensions-and-tax/the-limetime-allowance

[Peter Pedant]

yup I agree with all the above !
it looks as tho some lucky person is gonna get £150k
his pension took up 23.6 % of the life time allowance but that is irrelevant
the pension pay out can be written into trust but you havent told us if this was done
Pensions and so on may well be discretionary but they almost always do what they say they will do in the brochure ... [ or else no one would invest in a pension ]
otherwise the pension death grant goes into the estate
and I notie that no one has mentioned that -

I think the lump sum will go to whomever is named in the will
or if there none then the rules of intestacy

the remaining members of the family ( long life ! long life ! ) are irrelevant unless they have have had the pension assigned to them or are mentioned in the will or inherit under the rules of intestacy

I also agree with the one who said my pension doesnt give a death grant - neither does mine.

the bit of the letter above LTA 10 02 % will tell you what the is
we think it is about £150k

[woofgang]

PP, the death grant payable from my late husband’s pension was part of the assignable rights and could only be paid to the named spouse or partner who would receive the pension so it didn’t form part of the estate. Mind you its nearly 5 years since he died and the rules might have changed.

[mayra1989]

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