You updated your Will after the divorce. But did you update your pension nomination? Most people do not — and the consequences can be devastating.
Pension death benefits and life insurance payouts are typically controlled by nomination forms, not by your Will. These forms operate outside probate, outside the estate, and outside your solicitor’s sight. If they are outdated, the wrong person could inherit a six-figure sum regardless of what your Will says.
The most common mistakes:
• An ex-spouse still named on a workplace pension nomination after divorce
• No nomination form completed at all, leaving trustees to decide
• Life insurance not written in trust, meaning proceeds are added to the estate and taxed at 40 per cent
• Death in service benefits from a previous employer still naming an old partner
Why this matters: Pension trustees almost always follow the nomination form. Your Will has no jurisdiction over pension death benefits. And since pension funds are typically outside the estate for IHT purposes, they represent one of the most tax-efficient ways to pass wealth — but only if the nomination reflects your current wishes.
What to do now:
1. Locate every pension, life policy, and death in service scheme you have
2. Check who is nominated on each one
3. Update any that are outdated
4. Write life insurance into trust if you have not already
5. Record all details in your LifeSafe personal estate record
Thirty minutes of paperwork now could prevent months of confusion and thousands of pounds lost to the wrong recipient.