Beware of pension scheme nominations
Pension scheme nominations aren’t always as clear cut as they may seem. The press recently reported on an IFA who was shocked to learn that on the death of her husband, she was not permitted to receive funding from his pension scheme until after probate had taken place – despite having been nominated as beneficiary.
Friends Life informed Ms Brookes that as no discretionary trust was in place, they were unable to tell her when she would receive any funds. In the meantime, she was forced to find the money herself, to pay for funeral costs.
It seems that although a beneficiary nomination form was in place, Friends Life only considered this to be an expression of wish, placing the decision of who the money was to go to, in the hands of the administrator of the pension scheme.
This doesn’t necessarily mean however, that a beneficiary nomination isn’t worth the paper it’s written on. The administrator must take this indication of wish into account, along with the actual will, when distributing the deceased’s final estate.