Husband thinking of giving pension to one of our children and I am worried

I have no advice, but couldn't pass by, without saying how that how sad I am for you. How does he expect you to manage, if he predeceases you? It wouldn't be easy, even with state benefits.

Depending on the amount of the drawdown, it could affect your daughter's means tested benefits. There is a limit to how much savings you can have. Is your husband aware of this?

I have a drawdown pension, which occasionally gets used to pay for major items. Also is your husband aware that if cash is taken from the drawdown, it is taxed at source?

I hope you can resolve this. ?

Everyone thought my brother would outlive my sister in law give her health track record. Wrong.
Thinking that the government will provide for you is seriously misguided. Your husband should be listening to the financial advisor.

I think that you should try and get some professional advice on this.

My Dad remarried and his wife was in very poor health - she outlived him by 11 years!

If your daughter is in receipt of means tested benefits, any other income could have a detrimental impact on those.

Certainly your daughter ‘s means- tested benefits would be affected if she has assets above a certain amount. And unfair to treat children differently, in my opinion. There are legal and viable ways through specific trusts to leave money to a vulnerable adult child without it affecting their benefits and maybe this could be looked into.
As far as your rights are concerned, I don’t think there is anything you can legally do now to prevent your husband doing what he wants with his own money and pensions, but you would have rights to inherit if he dies first without a will, or even if he were to leave everything to his children, this could be contested on the grounds that you have a right to be supported in your circumstances.
There is something I don’t understand in your post. Why did you need to sign, if it was not your money? Could you clarify, please?

Rather than hand his pension over could he not receive it himself each month and set up a direct debit or standing order to your daughter? I do with ours each month. Then it can be shared - until it is needed again.

I'm not trying to legally prevent him Cabbie. I'm just trying to work out all the implications before we discuss it further. My understanding is that pensions are considered joint marital assets. As far as if we were divorced is concerned, it seems to be that he would have to go to court to try and remove me as beneficiary. Pensions are not part of the will. As far us us being married is concerned, it's very hard to ascertain, as it doesn't seem to be a common situation. The fact that pensions are legally joint marital assets is the reason I had to sign to agree to him making it a draw down pension.

I think your idea makes sense UrmstronGran except that our Dds benefits are already reduced because of the income of her partner. So she would only have the money taken off her.

Also, we're not actually well off. We have a little left over most months, others we have to take money from savings, and we live very frugally. We don't go out, drink, smoke, buy much of anything. But our needs might well change as we get older. We do have savings, but as I said those will be smaller once we manage to move. I've at least persuaded DH to wait until we've done that, but I can see so many potential problems that's he's ignoring.

When I say we don't go out, we take walks and visit relatives but it only costs the petrol. We don't go out for meals and haven't had a holiday for years. (Our daughter does and her income with her partner is significantly higher than ours - but they need to buy their first home and we don't have a mortgage).

Sorry if I was not clear, hugshelp, I did not mean to suggest legally trying to prevent him. Always better to discuss and agree!
There are two things to consider: managing your money together now, and secondly after the death of the first spouse. The laws of intestacy are on your side if your husband does not make a will, or you have rights if he writes a will leaving you out.

For now, it seems to me you cannot afford to give money away just now and I am glad he has seen the sense of this. Better to reassess your situation once you have moved, and any alterations and other costs met.
I do agree that pensions would form part of the marital assets to be taken into account in the event of divorce, but I have never heard of them being joint assets outside of death and divorce, so that is something I will research.

You need to get some independent professional advice hugshelp.

I don't understand why you were required to sign a document regarding his decision to have his private pensions placed into a draw-down fund.

Mine and Mr. S.'s pensions are in draw down funds and we weren't required to give formal consent to one another. What we did have to do is have a separate document so that if there were any funds left say in Mr. S's at the time of his death, I would receive it as this is not covered by a will, so needs to be taken care of separately.

In order for our son to inherit whatever remains in pension funds, we both had to name him as beneficiary, leaving him 1% of the pension fund at the time of our individual deaths so when we have both died, he can inherit what ever is left.

I think you should ask to see the form that you signed and make sure it is what you think it is. If this is something that you felt pressured into doing, and you now regret it, the way your accident has affected your ability to think things through as well as your memory may mean that the consent you gave at the time can be rescinded.

IMO the time for him to allocate one his pensions to one of the AC is when you have pre deceased him, rather than taking a 'calculated' risk that he'll out live you.

Have you both made wills and if so, do you know what bequests he's made or if he's left everything to you? This is something you need to find out if you can.

I'm sorry if I've increased your concerns but there's something here that doesn't sit right with me.

Ooh smiles : In order for our son to inherit whatever remains in pension funds, we both had to name him as beneficiary, leaving him 1% of the pension fund at the time of our individual deaths so when we have both died, he can inherit what ever is left. - that sounds like a solution.

We've just chatted a bit more, as it happens, and he thinks he might be being a little unwise on reflection. His fear is that I won't handle things correctly so that our daughter gets the extra help needed when we are both dead. This should fix it! Thank you!

I will check out the copy of the document I signed, but I'm guessing it was just the financial advisor being thorough.

We're actually just planning to make a joint will. It was that, with the desire to give our DD the extra help that got all this started. Thanks again smiles.

Excellent post above from Smileless.

I cannot find anything to suggest that a personal pension is a marital asset, except in case of divorce. I echo the advice to check exactly what you have signed.

Have a read of the information from Pension Wise. It can be found under the site Moneyhelper, which is a government website, not a commercial one. It helps to understand how pension funds can be used, the tax rules etc.

Cross posted.
Glad to read your explanation. It makes sense about signing now.
There is no such thing as a joint will. You can make mirror wills, but after the first death, the survivor may want to change things. Listen carefully to your solicitor’s advice, as they will make sure you think through all eventualities.

I’m so sorry to hear of the situation you’re in. I can only think that if your husband had decided to take an annuity from each pension then if he died before you, you would have had an annuity from each (or at least one) of them, hence what the financial adviser said and your need to agree the draw down arrangement instead?

I’m a retired solicitor but did not practise in the areas of pensions or wills, and now I have retired I can’t give legal advice so what I say below is just a little friendly help, things for you to think about.

You say your husband put pressure on you to sign away your right to a widow’s pension, and in those circumstances it could be argued that you did not consent at all, but to try to unpick the arrangements now on the basis that you signed away your rights under duress, would be a very expensive and maybe fruitless business and I doubt any lawyer would advise you to go there. Quite apart from that, it would destroy your marriage I imagine.

As I understand it, your husband is talking about leaving the benefit of one of his pensions in his will to your disabled daughter who relies on benefits. I’m assuming here that the pension pots don’t die with him but that needs to be checked. If he were to do that then depending on the amount he leaves to your daughter she may lose her entitlement to benefits as others have said, and he needs to be aware of that.

If one spouse leaves everything to another in their will, no inheritance tax is paid under current rules. If the first spouse to die didn’t leave a will then the surviving one would receive a certain amount of the assets of the deceased and after that children start coming into the inheritance. Inheritance tax may be payable depending on the size of the estate.

Your husband is obviously talking about making a will and you should do so at the same time. You will after all have a share in the bungalow you’re buying (more on that later) and doubtless some other assets that you want disposed of in accordance with your wishes. He may or may not be the first to die so your dying first cannot be presumed and the solicitor preparing the wills should be made well aware that though you might appear to be more frail than your husband you have no life-shortening conditions and at eight years older it’s not unreasonable to think you might outlive him (I certainly hope you do!). So you should both be making an appointment to see a solicitor about your wills together. The solicitor who is acting for you on buying your house may be able to prepare your will or else refer you to a colleague. The point here is that if you are buying the bungalow together then you are both already clients of the firm and this gives your husband much less chance to ride roughshod over you - but don’t tell him this is why you’re suggesting using the firm which is already acting for you.

This will be your chance to say to the solicitor, when your husband brings up his wish to leave one of the pension pots to your daughter, that you are worried that this would leave you with no means of support at all (except I am assuming the benefit of the other pension if it doesn’t die with him) until you get your state pension. Also act naive and say you think there’s no inheritance tax payable if the whole of your husband’s estate is left to you, but would any be payable if one of the pensions is left to your daughter and if so how could you pay that without using up the other pension pot or selling your home? He will know the value of the pensions and the rest of your assets and be able to advise. I think the solicitor might talk your husband out of this and suggest that your respective wills leave legacies to the children after you both die, which will protect you and your husband’s desire for the children to see he is leaving them something can be achieved without endangering your security.

Now on to the bungalow. You probably already know that joint owners of a property can own it as ‘joint tenants’ or ‘tenants in common’. If the bungalow is owned by you both as joint tenants then when one of you dies the other will inherit the property entirely. If it’s owned as tenants in common then each owns a specific share in it which can be left by will to someone else. I hope you choose the joint tenants method, which is usual for married couples unless they are spectacularly wealthy. I would however mention that one owner can at any time convert a joint tenancy to a tenancy in common without the consent of the other, just be aware of that.

I hope this helps a little. Your husband will probably be cross if his scheme is thwarted but I would like to see you have some peace of mind.

Good luck!

Posted before I saw your posts regarding the naming of your son as beneficiary of the pension pots. Do bring this to the attention of the solicitor who prepares your wills. Glad to hear your husband is having second thoughts. I think he very much underestimates your capability!

I think your best bet is to get proper legal advice as there are many aspects to your situation.

I can understand why your husband wants to help your daughter but first and foremost you must ensure that the two of you wouldn’t be left short by doing so.

You haven’t reached pension age yet so you could well have anything up to thirty years of life to financially plan for.

As far as your husband dismissing your concerns by saying that the State would look after you, well that’s not the right attitude to have, is it?

Regardless of the legalities, surely your husband's pensions morally belong to both of you. Presumably they were accrued over the decades when you had childcare responsibilities.

As for you relying on the State in the future, why does that principle not apply to your daughter?

A late friend who was wealthy in her own right had a coercive bully of a husband, who knew better than her, and got her to sign various documents - it didn't end well, to say the least..

I'm flabbergasted in this day and age at the way some women are treated by their husband - as though their lives, security and happiness don't matter.

I'm glad my post was helpful hugshelp and relieved that I didn't add to any concerns you have.

It may as you say GSM be a good idea to disclose to the solicitor drawing up their wills, any provision made with regard to private pension provisions, however such provision falls outside of the estate.

I think solicitors who do draw up wills should be more informed. Before we saw our financial adviser we were mistakenly of the opinion that everything, including our private pensions, were covered by the wills we'd already made.

Not everyone is able to afford the services of a financial adviser but without their knowledge and expertise, people can be left without what can be a substantial amount of money left in someone's personal pension pot, because the correct documentation wasn't drawn up to enable them to inherit.

Hugshelp
I can understand your frustration in regard to the cognitive point referred to in the penultimate para of your o/p.

I would set out my concerns to DH in writing.

DH may then reconsider his judgement of your cognitive ability.

Further, a copy of any written communication may be left for your AC to view, perhaps in the future, leaving them in no doubt of your preferred position with regard to your finances.

Yes smileless you’re absolutely right, a solicitor can’t look after anyone properly without having the full picture and it’s very important they know about the pension provisions.
Something else I should have mentioned hugshelp, have you got lasting powers of attorney in place? It’s especially important that your husband has one so that his pension money can be accessed to support you in the event of for instance him having an accident or stroke which leaves him mentally incapacitated. The solicitor who prepares the wills can do this too. Your husband may moan about the expense but he has to realise that if he suddenly became incapable of managing the money you could be in a dreadful mess until you get your pension. If he still thinks you can’t manage money - and I very much doubt that’s the case - you and your son, or your son alone, could be the attorneys, assuming you can trust your son to act in your husband’s and your best interests. An attorney acts for the person who has given the power but could for instance draw pension money to maintain the bungalow and pay the utility bills. Also ask the solicitor to register the power of attorney straight away as it can’t be used until it’s registered and that can take some time.

Power of Attorney is on our list thanks GermanShepherdsmum. We're both just trying to get our heads straight and work out what exactly our wishes and questions are before we set things in motion.

I would be concerned at giving away a large amount.
Certainly don’t rely on him outliving you, my aunt was in very poor health and finances were arranged with that in mind. Then my Uncle had a heart attack and predeceased her by a few months, that really messed the family up, and the taxman had a field day.
You never know what’s round the corner!.

Can I just clarify smiles - with regard to naming your son beneficiary and leaving him 1% - was that a codicil to the will or something you arranged via the pension companies?

As you rightly say, the pensions are not included within the assets of a will. My husband's pension schemes are where I am named beneficiary of his pension pots (and vice versa though my pots are tiny amounts) at present, and it was one of those he was considering changing. I told him what you have done and he agrees that's a good solution, so it's just the how-to part we're not clear on.

This was arranged over and above the provisions in our wills hugshelp by our financial adviser.

In order for a child to be able to inherit pension funds, to begin with they must be left 1%. So in the event of my death Mr. S. would inherit 99% and DS 1%. When he dies because he also left 1% to DS and DS had already received 1% of mine, whatever was left which may or may not be a combination of mine and Mr. S.'s can be inherited by our son.

You can of course do this with more than one child, leaving each of them the initial 1% and then when you've both died anything remaining in the pension fund will be divided equally between them.