This is about death benefit nominations. But first to Hollywood.

The Oscars has attracted much attention due to issues over the winner of the Oscar for best picture. Warren Beatty and Faye Dunaway appeared unsure which picture should be announced as the big prize winner of the night. After much hesitation it was revealed that colourful musical La La Land was victorious. However, things were to change.

It was then identified that La La Land had not in fact won. Instead, Moonlight was the real winner. The members of the La La Land team, mid acceptance speech, graciously handed over, on stage, the coveted award to Moonlight. The reported answer to this mysterious turn of events is that Warren Beatty and Faye Dunaway seem to have been given the wrong envelope… one that contained Emma Stone of La La Land’s best actress success.

What has this to do with death benefits?

We have previously blogged and written about the importance of a “nomination” under the Taxation of Pensions Act 2014 to take advantage (if the scheme allows) of new flexibility over pension death benefits. This blog is about a wider point: that where a nomination is in place for pension death benefits or death in service through employment, it must be up-to-date. If you want to nominate Moonlight to win, you want to avoid the envelope being opened at the crucial moment saying “La La Land” or being unclear (e.g. referencing “best actress” when you are expecting “best picture”).

As the Oscars has shown unravelling these things can be tricky.

In the case of death benefits it can be extremely difficult in many cases to unravel an out of date nomination given the weight that is often given by scheme trustees to a nomination. This issue can be particularly important during separations and divorces as well as situations where the intention is to benefit adult children. A current and clear nomination is important. As well as clarity it will save cost, time and reduce stress at an already stressful time.

Death benefits are often very valuable (sometimes surprisingly so) and will be important to anyone at any age.

However, we are finding the importance of death benefits is particularly stark where a death has occurred at a younger age or death was unexpected. In such cases, the death benefits could be critical to the financial stability and security of the surviving spouse, civil partner or partner and the family. A delay in payment or a contest over who is to receive a payment is to be avoided and an up-to-date nomination is central to achieving that.

So, what are the key points from this mix of glamour, tax and law?

1. Ensure nominations are current and reflect your wishes.

2. The ‘obvious’ way to fill in a nomination form (e.g. simply 100% to spouse) might not be the best course of action. These benefits are often very valuable and care should be taken and advice sought about the appropriate basis for them to be paid and protected after death (‘bypass’ trusts for some benefits may still be very useful ways to protect these benefits).

3. Different benefits need to be treated in different ways. Not every death benefit works in the same way.

4. Those separating, unmarried partners and those wishing to benefit adult children should give additional attention to this topic to make their wishes happen.

5. Keep nominations under review. Get in touch.

6. There can be a mix of skills (legal, tax and financial) needed during life and after death to best protect these valuable benefits.

7. Whatever one does, try to avoid the death benefit nomination ‘envelope’ being opened and what is inside being ‘wrong’, out of date or unclear.