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  • FIRST POST
    • forgotmyname
    • By forgotmyname 14th Oct 16, 12:16 AM
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    forgotmyname
    Inheritence and benefits.
    • #1
    • 14th Oct 16, 12:16 AM
    Inheritence and benefits. 14th Oct 16 at 12:16 AM
    Preparing for some flack now after reading some similar threads..

    Mum is looking at appointing me with power of attorney, just in case, and curious on howto share the assets when she passes on.

    My sisters on ESA or JSA depends on her health. Mum worried that leaving half the estate to her will mean her benefits get stopped.

    Considering leaving a high % of the house to her and any funds/stocks etc to myself. Thinking that if she moves into the property then her ESA/JSA will continue? Sister currently lives in council housing.

    Will this work? (expecting flack, but it seems just the same as someone with a mortgage who loses their job but gets to keep the house)

    Thanks...

    Ready, Aim........... Fire
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
Page 1
    • konark
    • By konark 14th Oct 16, 12:50 AM
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    konark
    • #2
    • 14th Oct 16, 12:50 AM
    • #2
    • 14th Oct 16, 12:50 AM
    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.
    • Gpod
    • By Gpod 14th Oct 16, 1:01 AM
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    Gpod
    • #3
    • 14th Oct 16, 1:01 AM
    • #3
    • 14th Oct 16, 1:01 AM
    Depending on the value of the property at the time of inheritance she could be liable for inheritance tax.
    • unforeseen
    • By unforeseen 14th Oct 16, 7:12 AM
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    unforeseen
    • #4
    • 14th Oct 16, 7:12 AM
    • #4
    • 14th Oct 16, 7:12 AM
    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
    • TELLIT01
    • By TELLIT01 14th Oct 16, 8:05 AM
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    TELLIT01
    • #5
    • 14th Oct 16, 8:05 AM
    • #5
    • 14th Oct 16, 8:05 AM
    Any inheritance tax is paid from the estate before distribution of the assets, it is not the responsibility of the person receiving a legacy to pay that.
    On the specifics of the OP's question. A will as described is not a problem.
    What I can see as a potential problem for the sister is maintaining the property over time, if her only income is in the form of benefits. That is something for the family to discuss though. For example, if you were to pay for all maintenance and repair bills it wouldn't affect benefit. However, if you were to pay her bills that might be classed as income.
    • Londonsu
    • By Londonsu 14th Oct 16, 10:14 AM
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    Londonsu
    • #6
    • 14th Oct 16, 10:14 AM
    • #6
    • 14th Oct 16, 10:14 AM
    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
    • By TELLIT01 14th Oct 16, 11:06 AM
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    TELLIT01
    • #7
    • 14th Oct 16, 11:06 AM
    • #7
    • 14th Oct 16, 11:06 AM
    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/
    Originally posted by Londonsu
    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.
    • Londonsu
    • By Londonsu 14th Oct 16, 11:33 AM
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    Londonsu
    • #8
    • 14th Oct 16, 11:33 AM
    • #8
    • 14th Oct 16, 11:33 AM
    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.
    Originally posted by TELLIT01

    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)
    Last edited by Londonsu; 14-10-2016 at 11:37 AM.
    • forgotmyname
    • By forgotmyname 14th Oct 16, 1:33 PM
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    forgotmyname
    • #9
    • 14th Oct 16, 1:33 PM
    • #9
    • 14th Oct 16, 1:33 PM
    Sorry not making my self clear

    Yep mums only in her 60's, but dad passed away recently, very unexpectedly.

    She is now just planning for the future and getting everything sorted just in case. The POA is just to make it easier if anything happens where she needs care etc. The whole estate is will under the current inheritence tax limits.

    Her will is still applicable, but thinking of amending it. But thinking that leaving my sister with a load of money that means she will have to spend it all before she can get benefits again is not sensible in her eyes. Its making me think as i type this though...wow.

    Assuming she doesnt need to be taken into care etc.

    So is there an issue with her leaving the house to my sister, with me having a partial share in it?

    What happens if she is left the house and doesnt want to move into it?
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • Ames
    • By Ames 14th Oct 16, 2:00 PM
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    Ames
    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.
    Unless I say otherwise 'you' means the general you not you specifically.


    Recent reads: Everyday Sexism by Laura Bates. Headscarves and Hymens by Mona Eltahawy. Justice - What is the Right Thing To Do by Michael Sandel. Is Multiculturalism Bad For Women by Susan Moller Okin.
    • forgotmyname
    • By forgotmyname 14th Oct 16, 2:24 PM
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    forgotmyname
    What if the house was not sold? Would they expect the person living there to pay rent? eg a family member living there and taking care of the place whilst they themselves save to buy a property?

    Is there an issue with my mum putting our names on the deeds now?

    The property would be suitable, its just the location, its miles from anywhere, and if she is on benefits then the travel costs will be an issue i think.
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • marliepanda
    • By marliepanda 14th Oct 16, 2:38 PM
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    marliepanda
    If the house belongs to your sister, then she cannot just let a family member live there rent free, whilst still continuing to claim benefits.
    Suvery Earnings 2016 - £188
    • Ames
    • By Ames 14th Oct 16, 6:00 PM
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    Ames
    What if the house was not sold? Would they expect the person living there to pay rent? eg a family member living there and taking care of the place whilst they themselves save to buy a property?

    Is there an issue with my mum putting our names on the deeds now?

    The property would be suitable, its just the location, its miles from anywhere, and if she is on benefits then the travel costs will be an issue i think.
    Originally posted by forgotmyname
    I'm not sure what you mean in your first paragraph? Do you mean if your sister owns the house and someone else lives there? For benefits purposes the value of the house would be counted as capital. If it would be more than 16k your sister wouldn't be entitled to means tested benefits.

    There are several issues with putting your names on the deeds. From your sister's point of view she'll be treated as having the value as capital, which if over 16k would stop her benefits. From your mum's point of view if she needs to claim benefits or go into a care home she could be deemed to have done it to deprive herself of assets and be treated as if she still owned the whole house.

    Could your mum not just split the assets between you and your sister and your sister buy somewhere that's in a more suitable location?
    Unless I say otherwise 'you' means the general you not you specifically.


    Recent reads: Everyday Sexism by Laura Bates. Headscarves and Hymens by Mona Eltahawy. Justice - What is the Right Thing To Do by Michael Sandel. Is Multiculturalism Bad For Women by Susan Moller Okin.
    • forgotmyname
    • By forgotmyname 14th Oct 16, 10:02 PM
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    forgotmyname
    Sister cannot buy anywhere with the money, the property is not worth that much and take away the fees to sell it wont leave enough to buy a run down studio flat anywhere near where she lives now.

    oldhand, i know what you mean, but the cynical side of me just has that nagging feeling.

    NLW i know this is not a cheat the system forum, if i wanted to do that i would ask you or your local MP.
    It seems its OK to inherit £600,000 and pay no tax, but not inherit your parents house which is less than 1/6th of that.
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • forgotmyname
    • By forgotmyname 14th Oct 16, 10:10 PM
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    forgotmyname
    Bottom line = She moves into a house she may not be able to afford the upkeep, or she takes the money and loses benefits until its spent?

    Or i get everything and give her pocket money?
    Punctuation, Spelling and Grammar will be used sparingly. Due to rising costs of inflation.

    My contribution to MSE. Other contributions will only be used if they cost me nothing.

    Due to me being a tight git.
    • Londonsu
    • By Londonsu 14th Oct 16, 11:23 PM
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    Londonsu
    Couple of things inheritance tax is a matter for HMRC your sister has to abide by DWP rules so really your question about someone getting 600k and no tax is irrelevant


    You say your Mum is only in her 60s I am 61 and not looking to pop my clogs just yet, so your Mum could have 20 odd years left, what is your sisters health issues that make you assume she will be on benefits for the next 20 odd years and if she is long term sick or disabled have you looked into PIP.


    And again you have to realise that your Mums assets can and will be used to pay for any care she needs so you might not inherit anything anyway.


    if you were to give her 'pocket money' she would committing benefit fraud as all money has to be declared for income based benefits.
    Last edited by Londonsu; 14-10-2016 at 11:25 PM.
    • Mersey
    • By Mersey 14th Oct 16, 11:41 PM
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    Mersey

    It seems its OK to inherit £600,000 and pay no tax, but not inherit your parents house which is less than 1/6th of that.
    Originally posted by forgotmyname


    That law applies to you as well.


    You won't be liable to pay any Inheritance Tax on the house either.


    I presume sister would rent or go for shared ownership or Help To Buy etc.
    Please be polite to OPs and remember this is a site for Claimants and Appellants to seek redress against their bank, ex-boss or retailer. If they wanted morality or the view of the IoD or Bank they'd ask them.
    • Mersey
    • By Mersey 14th Oct 16, 11:49 PM
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    • 567 Thanks
    Mersey

    And again you have to realise that your Mums assets can and will be used to pay for any care she needs so you might not inherit anything anyway.

    if you were to give her 'pocket money' she would committing benefit fraud as all money has to be declared for income based benefits.
    Originally posted by Londonsu

    The latter is untrue. Family members can give gifts. Only capital over £6k can stop/reduce a means-tested benefit claim.





    The former may happen. Although again it depends on circumstances.


    I do wish people wouldn't state that all those who own their own home may end up having to use it to pay for care home fees.


    It depends how physically ill they are and in need of care.
    My Grandad owned his own home, but 'cos of his dementia, diabetes & inability to walk unaided, he was given an NHS certificate which exempted him from care home fees.


    He still stayed at home for 2 years following that - with carers visiting twice daily - as that is what he chose to do and only lived in a care home for the last 12 months of his life.
    Please be polite to OPs and remember this is a site for Claimants and Appellants to seek redress against their bank, ex-boss or retailer. If they wanted morality or the view of the IoD or Bank they'd ask them.
    • Ames
    • By Ames 15th Oct 16, 12:43 AM
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    Ames
    My mum didn't need a care home either, she died at 52 in a hospice. I think it's prudent to take into account the sister's circumstances when the mother is planning her will.

    OP, there are other options for home ownership, such as shared ownership (she'd be able to claim housing benefit for the rent portion).
    Unless I say otherwise 'you' means the general you not you specifically.


    Recent reads: Everyday Sexism by Laura Bates. Headscarves and Hymens by Mona Eltahawy. Justice - What is the Right Thing To Do by Michael Sandel. Is Multiculturalism Bad For Women by Susan Moller Okin.
    • Londonsu
    • By Londonsu 15th Oct 16, 8:45 AM
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    Londonsu
    The latter is untrue. Family members can give gifts. Only capital over £6k can stop/reduce a means-tested benefit claim.





    The former may happen. Although again it depends on circumstances.


    I do wish people wouldn't state that all those who own their own home may end up having to use it to pay for care home fees.


    It depends how physically ill they are and in need of care.
    My Grandad owned his own home, but 'cos of his dementia, diabetes & inability to walk unaided, he was given an NHS certificate which exempted him from care home fees.


    He still stayed at home for 2 years following that - with carers visiting twice daily - as that is what he chose to do and only lived in a care home for the last 12 months of his life.
    Originally posted by Mersey



    Sorry its something that people must consider certainly at my age when it could happen in 10/20 years, there is no benefit in hiding your head in the sand and thinking it wont happen to you


    I would suggest the Ops mum has a look at this


    https://www.saga.co.uk/magazine/money/personal-finance/giving/the-rules-around-giving-money




    Yes you can have savings but it has to be DECLARED when those savings are added to all change of circumstances have to be reported , I work with a charitable trust we can give personal payments to people on income based benefits, but these cash gifts can affect the amount of state help a person gets which is why some people wont accept the money its a shame but those are the DWP rules.


    Having extra money in savings or current accounts can trigger a compliance check at the very least and the worse case scenario is an interview under caution and the DWP can check
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