Visualise it, and make it happen

Most pension schemes pay benefits to your beneficiaries if you die before them. Depending on what kind of scheme you’re in, you can tell your pension provider or pension trustees who you want these benefits to go to by filling in an ‘expression of wish’ form (it may also be called a ‘nomination’ or ‘nomination of beneficiaries’ form).

Your provider or trustees will usually follow your wishes, but they have the final say over who receives your benefits. This means the benefits aren’t part of your estate (the money, property and other assets left when someone dies) and can be paid without inheritance tax.

You can usually get an expression of wish form from your pension provider or trustees and post it back to them, but you may be able to fill one in online. Check with your provider.

Keep it up to date

Once you’ve filled in your form, it doesn’t end there. It’s good practice to review and update your form from time to time, especially if your personal circumstances change. The more up to date your form is, the more certain your provider or trustees can be that it reflects your wishes.

Find out more about naming beneficiaries.

Do you have a will? It’s not easy to think about, but it’s one of the most important things you can do to make sure your money and possessions go to the people you want them to. Without a will, your estate would be distributed according to the rules of ‘intestacy’, and this may not have been what you wanted.

If you have elderly parents or relatives you may want to check whether they have a will (although it’s not an easy conversation to have).

Making a will doesn’t have to be expensive. Various schemes enable you to get a simple will drawn up by a solicitor in return for a donation or bequest to charity.

Read more on wills.

You may want to set up a lasting power (or powers) of attorney, or look into it in case you want to do this in the future. A lasting power of attorney enables you to appoint someone to make decisions about your finances or long-term care, in case you become unable to do it yourself. It’s a way of making sure you will be looked after in the future. A lasting power of attorney is completely separate from a will, as it deals with decisions during your lifetime.

Again – this is something else you may want to discuss with elderly parents and relatives, as it may be a good thing for them to do.

Read more on lasting power of attorney.

Have you done everything you can to make sure your beneficiaries won’t pay more tax than they need to?

You might find it’s more tax-efficient to give away some money to your family or other beneficiaries now, or set up a trust.

Leaving money to charity can also help cut inheritance tax. Check out the MoneyHelper’s Top 5 ways to cut your Inheritance Tax guide.

Inheritance tax is a complicated area and you may want to consult an expert.