My mum left her grandchildren £10k each to put towards their pensions, but two are in their 30s and unemployed: Can I just hand over the money?

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I am the executor of my mother’s will and, quite understandably, she has left a £10,000 financial legacy for each of her grandchildren: ‘It is my express desire that he use such an inheritance for a pension fund.’

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For some grandchildren this will not be a problem as they are working and have an existing pension system in which inheritance can be paid.

However, the two grandchildren (aged 35 and 38) are both unemployed for a long time, with no prospect of starting employment and no pension provision.


Last Wishes: My mother left £10k to her grandchildren for their pension, but two are unemployed and have no provision for retirement

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I am trying to find a pension provider who will open a low cost stakeholder or private pension fund for each of them, paying £10,000 into the fund directly from the executor’s account on their behalf.

However, my inquiries have been answered (usually quite unhelpful) with the suggestion that the grandchildren will have to pay ‘directly’ in money.

My concern, which was shared by my mother, is that if the money is passed directly to the grandchildren, they may never actually be paid into the pension fund!

Do you have any advice or do you know of any pension fund providers that can accommodate this issue?

Tanya Jefferies, This Is Money, Answer: You are in a bind because you can understand that you want to fulfill your late mother’s wishes, but you cannot control whether other members of your family will respect her or not.

We asked a lawyer to explain your duties as an executor and your legal responsibilities to your late mother and her beneficiaries in this situation, so that you don’t get into any trouble.

And we even got a financial expert to explain that the financial providers you contacted were unwilling to open pensions to you on behalf of other adults.

Importantly, there are tax implications for putting £10,000 into a pension all at once, which will depend on the individual circumstances of the holder.

We hope this clarifies your legal position and course of action, and we wish you the best of luck in resolving this.

Helen Salisbury, Partner and Solicitor who specializes in Wills and Probate at Nelson, responds: When someone dies, it falls on the executor of the person’s will as to what is outlined in its contents.

Helen Salisbury: The inheritance belongs to the beneficiary and must be paid to them within one year of death

Helen Salisbury: The inheritance belongs to the beneficiary and must be paid to them within one year of death

Being named an executor can be challenging because there are many legal responsibilities associated with the role, such as distributing the decedent’s assets and solving their finances.

Something that I am often asked by the testator, which means that the people who are making the will, can bet on the gifts they want to leave.

While I understand this may be necessary in some circumstances – for example, if there are children under the age of 18 or this is a major force majeure event – ​​my advice to the testator would always be that the gift is either a lump sum is given, do for them as they wish, or it is left in a trust, which the executor can then control.

I am sure the testator must have had a similar conversation with your mother when making her will and explained that, given the amount involved, the trust cannot be advised due to administrative burden and expenses incurred from the trust . ,

It appears that, in this example, your mother has decided to leave an amount of £10,000 to each grandchild with a ‘wish’ that they use it for a pension fund.

As implied in the words, it is a will only and is not legally binding on the recipient. Therefore, as the executor, you have no control over the use of the inheritance by the recipient.

The inheritance belongs to the beneficiary and must be paid to them within one year of the death, otherwise you may be liable to pay interest thereon.

I hope this is the reason why pension providers are telling you that grandchildren have to give money directly to the pension fund.

I also expect that there may be tax implications for the beneficiaries, which would be personal to them and hence why the payments should come directly from the grandchildren.

It is possible for a testator to impose ‘conditions’ on gifts that take effect in the will, for example upon attaining a certain age.

But, as the words here suggest, it is not a condition and merely a wish to be imposed after the gift is received, and is merely a recommendation.

Although I understand why you want to fulfill your mother’s wishes, you have no binding obligation to ensure that the inheritance is used for a pension fund.

Guidance from you and a financial advisor can help grandchildren make the best decisions for their use of the money, but they may decide that they only want to spend the money as they see fit.

Helen Morrissey, senior pension and retirement analyst at Hargreaves Lansdowne, answers: There should usually be no problem in paying pension contributions on behalf of the adult grandchild.

Helen Morrissey: Even if grandchildren are not working, they can still benefit from tax relief on contributions up to £2,880 each year

Helen Morrissey: Even if grandchildren are not working, they can still benefit from tax relief on contributions up to £2,880 each year

Here the problem arises because these two grandchildren currently do not have their own pension which you can pay.

While parents and grandparents can open pensions on behalf of minor children and grandchildren, you cannot do so for an adult.

Grandchildren will need to open the pension themselves because the provider will need to be satisfied that they have agreed to all the terms and conditions and that they know what pension contributions are being made so that they can keep track of their tax relief eligibility.

In such a situation, you will need to cooperate in their installation…


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