Pension Death Benefits: Opportunities and Pitfalls

Abstract

Wills are not the only instrument available to pass wealth on death. A person can also use a number of other mechanisms such as trusts, life assurance policies, private pension schemes or survivorship operating on death of a joint tenant.

This chapter focuses on the functioning of private pension schemes as a vehicle for the transfer of wealth on death in England and Wales. It analyses what benefits can be passed on the death of a member of such schemes and how recipients of death benefits are determined. In particular, it examines the nature of pension nominations and how they operate, and questions whether they provide an effective and reliable estate-planning device, especially against the backdrop of superannuation schemes in Australia.

Keywords: Will substitutes, Pensions, death benefits, wills, succession, estate planning, pension nominations, Pensions Ombudsman, superannuation schemes, trustees, discretionary powers, taxation

JEL Classification: K10, K11, K34