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Scottish Trust Deed Forum
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Topic starter
18/12/2016 3:38 pm
Hi there,
I'm looking for advice to see if there are any exemptions for lump sums received during the period of a protected trust deed. Potentially I could have the following.
1.) workplace pension and lump sum. I would be due around 90,000 tax free and a annual pension of around £12,000 per year from my civil service pension. What would I be due on this?
2.) that pension becomes a dependants pension for my wife and son should I die. As my wife won't be on my PTD, would she be required to forfeit any of it?
3.) likewise I have a union group life scheme which pays 66,000 to my wife and son as designated dependents. Would the trustee be entitled to this?
4.) straightforward life policy for 50,000 which would not cover the settlement of the full debt including interest and trustees fees.
5.) currently I have a medical negligence claim pending with nhs. Would that be seen as being part of my estate?
Cheers for any advice!
18/12/2016 7:03 pm
Hi Pablo67.
If you draw a pension lump sum your trustee may well require it. Pension income would be treated the same as any other income - any surplus would be paid into your trust deed.
Your wife wouldn't have to pay from her income as far as I can see.
If you die your trustee would look to your estate to repay your debts, interest, and the costs.
Sometimes life insurance policies are written "in trust" in a way that would ensure the beneficiaries would receive this money. If that hadn't happened, the trustee would be obligated to gather in the funds.
A pending claim is an asset, as per PPI. I don't know what would happen with that claim if you passed away to be honest. If a claim could still be made, presumably the funds would go into your estate though.
Regards the life policies, it may be worth speaking to an IFA to check whether your beneficiaries are protected as you'd hope they are.
This page provides further information about pensions, pension lump sums, and retirement in general:
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19/12/2016 2:03 pm
Do you automatically receive the lump sum on retirement, or can you choose not to draw it down? If you can choose then there is nothing to stop you electing not to draw down the lump sum and your trustee could not force you to do so. However, if you did receive a lump sum of cash during the term of the Trust Deed then the trustee would certainly have a claim on it.
Similarly with your negligence claim, if this pays out during a Trust Deed then these funds would be likely to be taken by the Trustee to pay towards your debts.
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