Is deed of variation the only option?

Alisonlll

Biggles wrote: »

If we are talking such a reasonable sum as makes it worthwhile a) to employ a solicitor and b) for him to make a reference to IHT, the commonsense solution is for her to retain as much as she needs to ensure a reasonable income without being a burden on the state for the rest of her life and to divide the reminder up according to what she thought were her son's wishes.

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This is basically what we plan to do

Whiteknight

fortyplus wrote: »

I'm not getting into the debate about deprivation but want to ask where the £16k savings limit is mentioned as I know of someone who still gets Pension Credit but has more than this (fully declared).

I have no idea where the £16k savings limit has sprung from either, any savings over £10k will have an effect on Pension Credit. I have known people having well over £16k and still getting Pension Credit.

Biggles

fortyplus wrote: »

I'm not getting into the debate about deprivation but want to ask where the £16k savings limit is mentioned as I know of someone who still gets Pension Credit but has more than this (fully declared).

It's a more complicated formula for Pension Credit, and some provision is made for people who are on a low income who have nevertheless built up savings or other provision for their old age.

Alisonlll

We are just looking into this because silly as it may be mum is on the guarantee credit might not loose her benefits immediately she inherits my brothers money

fingers crossed

getmore4less

most of his money was tied up in a trust fund of which I am the sole beneficiary we took this to mean that trust would come to me and I could deal with his estate it turned out that didnt mean the money should go to me only that I should deal with that part of the estate

Not sure this make sense

The person(s) applying for probate deal with the estate

The trustees of a trust deal with a trust.

What sort of trust was this?

A trust can be part of an estate for tax purposes but not always form part of the estate for distribution.

What does the trust document say?
Was this set up by the brother or someone else(eg an inheritance).

SnowMan

Alisonlll wrote: »

We are just looking into this because silly as it may be mum is on the guarantee credit might not loose her benefits immediately she inherits my brothers money

fingers crossed

Sounds like your mother is in an assessed income period for guaranteed pension credit; I'll assume that is the case through the rest of this post. Typically the assessed income period may last 5 years or less from when it was set, although it can be more than that for older people. Check the paperwork for the assessed income period that applies to your mother.

During the assessed income period certain changes of circumstance are not taken into account in calculating pension credit. One of those changes that are not taken into account is an inheritance whatever the amount.

So until the assessed income period ends or there is a change of circumstance that does result in the assesed income period ending early (such as moving in with a partner) the inheritance has no effect on pension credit. The one caveat is that if the change of circumstance was predictable at the time the assessed income period was set then it may end now, although I am guessing that isn't the case here.

As your mother is in receipt of guranteed pension credit she will continue to get council tax benefit during the assessed income period (and housing benefit if applicable) because receiving guaranteed pension is an automatic qualification (known as passporting in the benefit jargon) for receiving these benefits.

When the assessed income period ends, all circumstances (including inherited capital will be taken into account) and pension credit is recalculated and entitlement and entitlement to council tax benefit etc may be lost.


The weakness in your case if the DWP claim deprivation later seems to be that there was no agreed split of the estate and so it it will be easier for the DWP to show that the division of the estate was determined based on benefit entitlement, and it looks like from your later posts there could be some basis to them claiming that. Personally I think you should decide what is a fair division in accordance with what your brother wanted regardless of what the effect on benefit entitlement is and you can at least defend any claim of deprivation strongly and with a clear conscience.

Incidentally some posters earlier were getting bogged down talking about the legal division of the estate through the intestacy laws (or valid will if there had been one). Of course with the agreement of the beneficiaries the division can be changed (through a deed of variation) in accordance with the deceased's wishes even if that division was not enforceable legally without the beneficiaries agreement. Of course existence of a deed of variation does not mean that the DWP can't claim deprivation.

Also if your mother qualifies for guranteed pension credit (ignoring deprivation) at the end of the assessed income period it will look like the division was to enhance entitlement. If there is a significant period after the assessed income period ends when your mother is not entitled to benefit and then her capital depletes over time so she becomes entitled again then her case that deprivation has not taken place becomes stronger (although as already mentioned there is no time limit a such after which the DWP can't claim deprivation).

Alisonlll

getmore4less wrote: »

most of his money was tied up in a trust fund of which I am the sole beneficiary we took this to mean that trust would come to me and I could deal with his estate it turned out that didnt mean the money should go to me only that I should deal with that part of the estate

Not sure this make sense

The person(s) applying for probate deal with the estate

The trustees of a trust deal with a trust.

What sort of trust was this?

A trust can be part of an estate for tax purposes but not always form part of the estate for distribution.

What does the trust document say?
Was this set up by the brother or someone else(eg an inheritance).

Not sure what your asking? but my brother had a personal injury settlement that was put into a trust for him, it was set up by solicitors, the documents say that upon his death the trust goes into his estate for distribution

In response to snowman we are assuming that at the end of mum assessment period she will lose her entitlement and so we are planning based on her needs if she ends up with only her state pension

My late brother initially wanted the majority money split between me and my brother but he wanted us to sort out my mums bungalow between us furniture decorating and the like then keep her a rainy day pot to send her on winter holidays abroad we've worked out how to do this but it simply means me and my brother will have to wait for our share

Life happens!