Death and pensions

We act for a client who has several pension funds with different leading life companies.

Some of them are the old retirement annuity contracts and some of them are more modern. The death benefits are written in trust for his wife.

That means no tax on his death but it does potentially exacerbate her inheritance tax position. We are aware of what the pension industry calls spousal bypass trusts. It seems to us that these are perfectly straightforward discretionary trusts with a wider class of beneficiary than simply a surviving wife.

If we are correct it seems obvious to put the death benefits in all the funds into new separate discretionary trusts. Can readers see any particular problems with this course of action?

Furthermore are we correct in thinking that on the death of the client in question provided that the death benefits are paid out...