Inheritence and benefits.

Hopefully your mum has many years left yet but it would be wise for her to make a will.

If your mum bequethed your sister the house, or a percentage of it , and she left her council house and lived in it, then it would not affect her JSA/ESA benefit entitlement and she could still claim council tax rebate. Any money or shares over £6,000 would affect them though.

Just to clarify POA ceases on death and has absolutely nothing to do with the distribution of the deceased's estate. That is down to the will/intestacy rules, whichever apply

You don't say how old your mum is but if she is elderly with the possibility of needing care then both she and the family needs to understand the deprivation of assets rules


http://www.ageuk.org.uk/home-and-care/care-homes/deprivation-of-assets-in-the-means-test-for-care-home-provision/

TELLIT01 wrote: »

From the OP I get the impression they are talking about provision from a will, not signing stuff over during the mother's lifetime. Hopefully the OP will clarify that.

Yes re reading that you are correct, still worth knowing about care home fees the OP and their sister seem to be of the mind that when Mum passes on there will be a house and funds/stocks to share out when in fact due to care home fees there could be nothing at all, Mum also needs to be aware of what her own financial responsibilities would be if she needs to fund her own care (very likely if she has a home to sell with no spouse/partner living there)

You don't say what your sister's health problems are, could they mean that your mum's house isn't suitable for her? For instance if she can't manage stairs.

The best option might be (depending on her health problems) set up a discretionary trust with terns that it's to be used to buy a property.

If she inherits the house and doesn't want to move in there are three options.

1. She rents it out. For means tested benefits the rent would count as income and the value of the house would count as capital. So not realistically an option, unless the rent would be really high.

2. Sell it and buy somewhere else. The value of the house could be counted as capital while it's on the market as she isn't living in it, so moving in while it sells would probably be prudent. She'd then have six months after the sale during which the cash would be disregarded, so she can buy somewhere else.

3. Sell it and bank the cash. She'd pretty much have to spend it at benefit levels, although some purchases (new white goods, a second hand car, replacing furniture) would be acceptable.