Benefits and Inheritance Money

manglesey25

my Dad is set to inherit some money from the recent death of his mother and this will affect their benefits.

Read the wording of the Will, does it say something like I give [SUM] to my trustees to hold upon trust for [NAME OF YOUR DAD].....

Then it wont affect benefits provided the trustee decides to hold it upon trust for the legatee, many Willwriters draft in this way to protect a beneficiary from passing their gift to someone else if they are, say subject to a liability e.g divorce bankruptcy, care home fees etc. The testators intentions should be followed and does not benefit a legatee's creditor.

If you are in Scotland, the will will probably read... I direct my trustees to make over the sum of [SUM] to [NAME]...

Im afraid there is little you can do, the law says it must pass to the beneficiary regardless if he has an outstanding liability.

GreenManalishi

manglesey25 wrote: »

Read the wording of the Will, does it say something like I give [SUM] to my trustees to hold upon trust for [NAME OF YOUR DAD].....

Then it wont affect benefits provided the trustee decides to hold it upon trust for the legatee, many Willwriters draft in this way to protect a beneficiary from passing their gift to someone else if they are, say subject to a liability e.g divorce bankruptcy, care home fees etc. The testators intentions should be followed and does not benefit a legatee's creditor.

If you are in Scotland, the will will probably read... I direct my trustees to make over the sum of [SUM] to [NAME]...

Im afraid there is little you can do, the law says it must pass to the beneficiary regardless if he has an outstanding liability.

Can't be sure of this as they haven't seen the will at this point in time. My Dad will meet with my Aunt this week to discuss it, as she's the executor of the will, but I suspect that no trust was set up. I'll pass on the information to my parents though as this could make a big difference. Thanks!

manglesey25

If your executor (? your aunt) has not received Grant of Probate yet, then the assets are not freely distributable, and at this moment, benefits are unaffected until a probate certificate has been issued.

Its really hard for anyone to give advice on this forum unless they see the actual will, otherwise everything is purely hypothetical and speculation.

GreenManalishi

manglesey25 wrote: »

If your executor (? your aunt) has not received Grant of Probate yet, then the assets are not freely distributable, and at this moment, benefits are unaffected until a probate certificate has been issued.

Its really hard for anyone to give advice on this forum unless they see the actual will, otherwise everything is purely hypothetical and speculation.

I can't be sure, but I think that my Aunt must have Grant of Probate at this point because she invited my Dad to come and collect a cheque from her. As soon as my Dad has the cheque he will phone the local benefits office and inform them of his change in circumstance and I assume that the benefits will stop from that point on.

My Nan's will and finances have been handled by my Aunt so my parents don't have that kind of information to hand unfortunately, but I expect they will have a better idea when they see her this week. This information is much appreciated nonetheless.

luminated

Hi GreenManalishi

We're in exactly the same position having lived very frugally for four years with another two to go before we are both getting our OAP.

I was forced to retire in my late 50's with health problems but not such I can clain DLA. At that I prepared a very detailed spreadsheet of my living costs incluing my savings and lump sum from a private pension and was able to prove we could live from my forced retirement until my official retirement, on my own money, without the need to claim benefits.

It is tight and I am not quite sure whether we will fall below the £16,000 point at which benfits can be claimed before my OAP kicks in.

However, like your parents, we have not taken a weeks holiday for years, replaced our car, or furniture, or other such capital spend items. So I have been reading this forum for a long time to learn but you must pick through very carefully as some advice is excellent but some very flawed.

Here is a link to a pdf which is heavy going but useful on deprivation of capital. It is the BW1 pdf which could be of use. I am about to embark on a replacement programme to include replacement furniture, updating car and have taken advice and feel I am able to legally do so providing I am sensible and keep all receipts.

http://www.dwp.gov.uk/local-authority-staff/housing-benefit/claims-processing/operational-manuals/housing-benefit-guidance/

Jowo_2

To the OP - search on the term 'deprivation of capital' and you should be able to unearth recent threads on this forum that discuss it. In those threads, you should be able to find my links to the DWP decision makers guide (and the HMRC one, too, that covers tax credits). This is the DWP and HMRC staff manual to provide guidance to its employees assessing claimants to see if there's any DoC. The previous poster has probably provided a link to one of them.

You will see then what a complex area it is but will at least see what the staff check if they suspect Deprivation of capital has taken place.

As far as I recall, they view the early repayment of loans where there is no legal obligation to pay them off quite dimly, plus the giving away of money to friends and relatives but you'd need to check the position on this. I can't see why there would be a problem paying utility bill arrears, paying for replacement furniture, etc, but do double-check the Decision Makers guide.

Keep good records - all receipts, etc.

luminated

Jowo wrote: »

In those threads, you should be able to find my links to the DWP decision makers guide (and the HMRC one, too, that covers tax credits). This is the DWP and HMRC staff manual to provide guidance to its employees assessing claimants to see if there's any DoC. The previous poster has probably provided a link to one of them.

You will see then what a complex area it is but will at least see what the staff check if they suspect Deprivation of capital has taken place.

As far as I recall, they view the early repayment of loans where there is no legal obligation to pay them off quite dimly, plus the giving away of money to friends and relatives but you'd need to check the position on this. I can't see why there would be a problem paying utility bill arrears, paying for replacement furniture, etc, but do double-check the Decision Makers guide.

Keep good records - all receipts, etc.

Hi Jowo

This is your earlier post which was of great help to me - thank you for posting that link.

https://forums.moneysavingexpert.com/discussion/2913556

RAS

Hi

Please get proper advice on this. I remember but canot track an old thread last year in which everyone told the OP that paying off debts was deprivation of capital until someone who worked in benefits came and explained the rule in more detail. And most of the benefit basher on the forum were wrong. However, spending money quickly simply to get back into the benefit range will cause problems as would be any gifts to family.

Certainly paying off utility debts is NOT deprivation of capital.

danaharrison

to the OP - im sorry to hear of the loss of your nan x, im not sure where u stand on the debt front as RAS suggests u need to get proper advice on that one either from ur local CAB or even phone the DWP. as for getting new furnature and so on i would recommend that u take pics of the old stuff to show that it is in poor conditions and needs replacement, keep all receipts and only go for budget to mid range price items. as for the car, i cant see there being a problem with u getting one but again dont go over board with the price, they would look much kinder on you spending £1500 on a second hand moter a few years old but in good working order than going spending £10000 on a new one with all the trimmings. hope this helps x

Indie_Kid

There is something called "notional capital". This is where the claimant is assumed to ave that capital. IE, you have £20,000 but spend £10,000 of that on a new car. The DWP may treat you as having some of that capital.

There is nothing to stop you from buying a car; but it would, imo, look suspicious if you bought a car costs thousands.