Complicated family situations have the potential to create challenging scenarios for pension trustees when it comes to exercising their discretion on the death of the member.

There are still many cases where it becomes apparent that the executors and potential beneficiaries expect trustees to follow the deceased’s expression of wishes without question. The most common scenario for conflict is when there are children from a previous marriage and a second (or subsequent) surviving spouse or co-habiting partner.

While trustees will take into account the deceased’s wishes, they should not just follow them without investigation.

In many cases those left behind are surprised by this fact, and this can often lead to upset, anxiety, and sometimes anger.

In a recent case that crossed my desk, the deceased had completed an expression of wish leaving his pension to be split equally between his three (adult, non-dependant) children. And nothing to his current spouse. The children (two of whom were the executors), were adamant the trustees shouldn’t contact the spouse as the deceased’s wishes were clear that the pension was for them.

However, the trustees have a duty to identify and consider all potential beneficiaries and a legal spouse cannot be ignored (nor could an unmarried co-habiting partner or anyone else who was potentially dependent on the member). In these scenarios questions need to be asked to establish the level of any financial dependency and a reasonable decision made in terms of how the death benefits should be distributed.

The key point here is that the member’s wishes are important, and should always be taken into consideration, but they are not the only factor. Financial needs of any dependants are also relevant, and even if it is found that the spouse doesn’t have financial need for the pension, questions need to be asked in order for that to be established.

If a spouse is not left anything under a will, they have a legal right to contest it under the Inheritance (Provision for Family and Dependants) Act 1975. This right extends to any financial dependant, including children, co-habiting partners and anyone else financially dependent on the deceased. They can apply to the court for “reasonable financial provision” from the estate.

In practice pension trustees need to think along similar lines, or they could find themselves in trouble if the case goes before the Ombudsman.

The executors should be prepared for the fact questions will need to be asked.

Preparing clients and their families for this can smooth the process at a difficult time, and clients should be encouraged to have open conversations with all their family about their intentions, so no nasty surprises emerge following their passing.

Lisa Webster is senior technical consultant at AJ Bell. She is an economics graduate with over 15 years’ experience in financial services. Prior to joining AJ Bell in May 2014 she spent nine years working in senior technical and consultancy roles at a major SIPP and SSAS provider. She is part of the AJ Bell Technical Team.  Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Twitter: @lisasippster