Expression of wish: what happens to your pension after death?
Guest blogger Julie Hutchison of Standard Life looks at an important form that ensures your pension goes where you want it to should you die before retirement.
People often have strong views on who should inherit their estate when they die. They often have even stronger views about who should not.
What they don’t always realise is that some assets are much more straightforward to transfer to loved ones than others. And what might seem like the simplest thing could bring some surprises.
The digital dilemma
For example, the digital files of millions of people now present some real challenges when it comes to how to pass them on. Many different approaches exist.
Take Facebook. It has a policy which gives certain choices about what happens to someone’s page after their death. It can be shut down, or it can be “memorialised”, allowing friends to post and share messages of remembrance. Twitter also has a policy to allow an account to be deactivated when someone dies.
But what if I have a collection of music held on iTunes? Or hundreds of eBooks on my Kindle? I could easily leave my CD collection or dusty paperbacks to someone in my Will, but I don’t have the same ownership rights to those digital files. So can I pass them on?
It seems not. It’s a bit like having a library card which expires when I do – the access rights to those files relate to an individual’s lifetime only. That’s why Bruce Willis was considering suing iTunes over this inheritance barrier, according to media reports.
It's easier to direct your pension
Happily, such questions about the digital afterlife don’t arise with your pension fund. There’s something you can do to make sure your wishes are known when it comes to who your pensions savings are passed on to.
What’s more, improvements are being made all the time and new pension rules introduced last year mean there is now much greater flexibility around how your family can use your pension fund after you’re gone.
If you die before you retire, it is your pension provider who usually determines who will benefit from the pension fund you have built up. As your provider is unlikely to know your family dynamics or preferences, they tend to ask you to complete what is called an “expression of wish” form to help guide them on who you would like to benefit when you die.
You can request a form (also often referred to as a nomination form) from your pension provider at any time.
It is then important that you regularly review your expression of wishes to ensure they continue to match your preferences as your circumstances can change. Then it’s simply a case of sending your provider a new expression of wish form to ensure those you want to benefit from your retirement savings can do so.
It’s as easy as that.
Julie Hutchison is head of international technical insight at Standard Life
Have you filled out an expression of wish form to ensure your pension goes to the right people?If not, do you plan to? Let us know your thoughts in the comment box below.
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