Hello Steesh and welcome to the trust deed forum.

I think we'll need to hear from Shona, Kevin or Mark on this question.

I'm not sure whether it's relevant, but could you confirm what age you are?

Hi, thanks for getting back to me. I am 30.

Hi steesh

I've undernoted a recent update from the AIB's website which may clarify matters ( or put the fear of God into you)

Mark

A recent case held at Dundee Sheriff Court heard that John Fernie Morris had received a pension payout of over £7,000.?áHe had failed to disclose this in his statement of assets and liabilities which he signed less than a week after receiving the money, on 21 July 2010. Records also show that Morris withdrew £5,000 in cash on the same date this money was paid into his account.?áIn a letter issued to AiB, Mr. Morris explained that he had spent the cash lump sum on ÔÇÿdrink and rubbish'. His bankruptcy application showed he had total debts of £8,277.83.
?á
The misconduct committed by Mr Morris was identified following an investigation and ?ácollaborative working by AiB and one of Mr Morris' creditors.?áAiB subsequently presented an application for a Bankruptcy Restriction Order to court.?áThe presiding Sheriff, Sheriff Duff, was satisfied that Morris' misconduct and level of intent to conceal this money from his trustee was sufficient to merit an Order lasting four years.?á
?á

Hi Mark.

Is your point that Steesh should have made his Trustee aware of the sum in order that the Trustee could consider how it should be dealt with?

Is a pension lump sum received during a trust deed considered to be money that should be paid over to the trust deed?

Does it make any difference that it was paid a fair number of years prior to the usual pensionable age?

Pension funds are normally exempt, though a lump sum in these circumstances is a little unusual. I imagine you will be fine, though you may want to have a look at the exact terms of your trust deed.

OK, thanks for the info - much appreciated. Best idea would be to avoid 'drink & rubbish' unlike Mr Morris.

Good morning Steesh.

I think you're right!!

If you're in any doubt you probably should run this by your trust deed firm, though of course that's a matter for you to decide upon.

Sorry guys, need to disagree.

When in receipt of a pension or annuity, payments is classed as income which, as per Section 32(1) does not vest (belong)to the trustee, he can however seek a contribution from this (Sections 32(4A) or 32(2)), including a one-off contribution from any lump sum payment as you describe in your post.

I think the law generally was to stop Trustees extending a sequestration/Trust Deed for 10 years to get their hands on a pension payment.

Best advise if you receive the payment is to be up front and agree a 'contribution' from this.

There does seem to be some advice on occupational pensions. Could you tell me what type of pension it was.

Mark

On second thoughts, I would agree with mark actually. The legal position is not necessarily clear but I imagine your trustee would seek to come to an agreement that a portion of the lump sum would be paid into the trust deed.