Death In Service Insurance Payout

[TheFatMan]

Hi Folks

I'm a trustee on the company DC pension scheme. The death in service insurance policy is also covered by the trustees. We have great advisors and a very good pension scheme set-up. So this is just to satisfy my own curiosity rather than any concerns I have.

We have a case of a colleague that has died without leaving a statement of wishes letter. They were legally sperated with children (joint custody).

I know the trustees are required to make a judgement call on how and to whom to distribute the Insurance Policy payout but I was wondering if anyone else has had similar experience.

Are the trustees required to investigate potential beneficiaries? Do we go looking beyond the children to the sepated spouse? Should we inform them of the benefit (potential)?

Do we only consider the spouse if they make an approach to the trustees?

Should we ask to review the deceased will to help us make a decision about how they wanted contents of their estate to be handled and treat the payout in same way?

Right now the most likely outcome is we payout to the estate and allow the executor handle everything (probably placing everythign in trust for the children).

Any experience or advice is welcomed.

 

[dereko1969]

Is this the first time this has happened? I would have thought your advisors would have come across this before and that the normal course of events is that it is paid to the estate, to be dealt with by the executor. If you're paying for these advisors it would make sense to ask them.

 

[TheFatMan]

Hi Dereko

Yep we have advice on this and the process is underway. And yes this is the 1st time we've had this situation, last time we had a statement of wishes and the individual was single no kids and never been married. So very straight forward. Everything I read on the matter is very non committal in terms of "trustees have a wide discretion!" in such matters. I'm interested in hearing similar experiences from the forum members that have no specific interest or agenda to peddle.

I have always found a little independent research on the part of a trustee is a very good thing to insure that "other" interests (including those of the company & a HR department that can be less than capable) are not being served.