Your Will & Pension: What You Should Know

The will you make should ideally include details for how you would want all your assets to be settled and distributed amongst all your beneficiaries. People will add the different properties they own, the liquid money and valuables they have, and the money they expect to get to be distributed.

Most people would expect that money owed to you from your workplace would also end up in the same assets pile, but that’s not necessarily the case. The way your pension is moved around and if you’re able to pass it forward depends on a lot of different factors. Let’s have a look at what they are.

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The Type of Pension

A major factor for whether you’ll be able to pass on your pension depends on what type of pension plan you have set up. Essentially there are two major types of pension plans that can be transferred to someone else.

You have the standard “Fixed Benefit” plan, which is a company-sponsored pension. This plan is a tax-free, company-sponsored fund that’s calculated on time served with the company and how much your salary was. The other option is a “Fixed Contribution” plan that relies on employees putting a bit of their own salary in a tax-free account, and the number is matched by their employer.

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Who can Inherit a Pension?

Unlike your other assets, it’s not as easy to just give the money you have in your pension account away to any living friend or family member through your will. Pensions often come with a lot of legal terms attached to them that dictate where the money can go. Many pension plans are for one person only and may actually be wasted if you pass away before you claim it.

If you have the sort of pension plan that would allow you to transfer it forward, you would still only be able to give it to either your spouse or child officially. You may want to review what yours allows with the help of a litigation lawyer or an estate law attorney.

Claiming your Funds

To add the funds to your will, you would need a combination of the right factors, which would include things like your company’s policies on transferring pensions, your type of pension plan, and if you’ve been working long enough to actually get the pension claim, among a few other things.

The whole process can still be quite messy and hard to figure out. Getting help from a professional from our team can make the whole process easier. With our experienced probate attorney Queens and probate attorney Brooklyn and estate law attorney in Queens, we can help with any issues that come up regarding your will.

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