Trust for pension death in service benefits

My client would like her death in service (DIS) lump sum to be used to pay off her mortgage, so that her property could be preserved as a future home for her minor child.
However I understand it is not possible to assign such benefits in the same way as life policies.
Her current nominated DIS beneficiary is her minor child, who is also the sole beneficiary of her Will.
Would the solution be to create a pension death benefit trust to receive the lump sum with an overriding power of advancement? Could the trustees then use the funds to pay off the mortgage on the basis that this is for the advancement or benefit of her child?
I assume the same persons could act as executors/ trustees of her Will and trustees of the pension death benefit trust without the risk of bringing the lump sum within her estate for IHT purposes?

Alexandra Taylor
Botvyle Consultants

This seems to me to be the most appropriate course of action. I don’t see a problem with the trustees being the same people as her executors since the roles are entirely distinct. I assume you are proposing to establish a pilot settlement to act as receptacle for the DIS payment and the DIS payment is payable at the discretion of the trustees of the scheme who will accept the trustees of the pilot trust being nominated (it might be worth checking that in advance).

Paul Davies

I would suggest that perhaps you consider having a full discretionary trust for the Will, and nominate the DIS payment to the estate. You then have an element of asset protection for the minor child.

Haroon Rashid
I Will Solicitors Ltd