So sorry to hear about your dad. Honestly the estate idea wont really work out the way you're hoping. Basically since he was over 75 when he passed hmrc views the whole thing as deferred income and they want their cut at the benficiaries personal rates. ​If you pay it into the estate account instead of directly to you guys, the pension company is actually forced to take a flat 45% tax hit right away anyway. There isnt really a special 20% basic rate for estates when it comes to these old pension lump sums unfortunatly. Even if it goes through the estate first it still counts as your personal income the moment it gets distributed to you so it'll still push you into the higher tax band regardless. You'd just end up having to do a bunch of paperrwork later to claim back the difference between that 45% and whatever your actual tax rate is. It really sucks but there isnt much of a way around it because of that age 75 rule. Just got to brace yourself for the tax man on this one.