A critical part of death benefits planning
An Expression of Wish is a request from yourself to your pension provider as to how to deal with your pension when you pass away.
Often pension providers will supply their own forms to complete, requesting specific instructions as to how the pension is to be distributed, and you have the opportunity to split by asset or percentage of the overall pot.
Think of an Expression of Wish like a will for the pension which will sit outside of the wider estate from both a will and inheritance tax perspective – but the Expression of Wish form isn’t binding like a will.
Over the course of your retirement journey, your circumstances are likely to naturally change.
Examples of these circumstances include
marriage or divorce, personal relationships or the
birth and death of loved ones.
Failure to complete or update Expression of
Wishes can potentially have complicated and
difficult consequences when you pass away. This
can add to an already stressful situation for those
dealing with their grief.
Any named beneficiaries on your Expression of
Wishes can usually select whether to take their
share of the death benefits as a lump sum or via
drawdown. However, it is worth remembering
that beneficiary drawdown is only available in
the following circumstances:
- The beneficiary is classed as a dependant of
the deceased under HMRC’s definition or - If the member was survived by a dependant
or has named other people on the form, the
particular non-dependant beneficiary was
named on the deceased’s Expression of Wish - The beneficiary is receiving death benefits
in a situation where there are no surviving
dependents, and no Expression of Wish in
place
Fundamentally an Expression of Wish can feel like another form to update, especially in times of personal difficulties. However, it is a critical part of death benefits planning.
Ultimately, it is the scheme administrator who has the final say over which parties receive death benefits when you pass away.
Whilst it is the aim of the administrator to distribute any benefits in accordance with the wishes of the deceased client, without a clear and updated Expression of Wish in place, this has the potential not to align fully with the client’s intended outcome.