Whats the best way to leave someone on benefits money?

Jake'sGran

Hercules98141 wrote:

Me and my Mum and Dad are unsure how we should leave money to me.
I'm not allowed to have more than £3000 in my account. If i have more I have to phone the council straight away otherwise i'm breaking the law.
An example where this has caused problems is when i had four grand mal epileptic seizures and broke my saxophone - in order to buy a new one i had to get my mum to open a savings account and save for about 1 year.
Me and my Dad decided to see a financial advisor who wasn't much help.
We're unsure if we should leave the money in the form of a house or if there is any other way we could leave it.
The main problem is that it would be disadvantageous for me if anyone left me more than £3000 as my benefits would be stopped immediately.
Can anyone offer some advice? We'd really appreciate it if anyone could help.

I may not be the sharpest knife in the drawer but I don't understand this post. Are you talking about the wills your parents will make out? Is IHT involved in all this? Are your parents ill? As has already been said, if there is a lot of money involved you may be able to live on the interest when they are gone. In addition, if you need any kind of assistance because of your condition you may be entitled to one/some of the non means tested benefits.
e.g. if you needed assistance with some aspect of your daily life you can have attendance allowance and, as far as I know, the person offering the help would not need to be living in the same house as you. AA is not means tested. Hope this response does not cause some giggles but I do find the original post baffling.

jamesd

Housing benefit seems likely, since it's a council paid benefit.

missile

A simple option may be for parents to pay OP an "allowance" say £1,000 / month. Provided he spends it before his savings reaches the threshold where he is obliged to declare same there ought to be no problem. The only other option I can think of is a trust fund, but he would need professional advice to set up same.

PS: Sorry to hear about your health problems.

zzzLazyDaisy

A regular 'allowance' from a relative counts as income for housing benefit purposes, and would be taken into account when assessing HB.

Incapacity benefit and DLA are not means tested (I know this, I am in receipt of both) However, some people do mistakenly refer to income support severe disablement allowance and/or disability premium as 'incapacity benefit' but those benefits are means tested.

If OP was working when she became ill, and had the relevant NI contributions, then she will be on non-means tested IB. In that case the only benefit that would be affected would be her HB.

The question then is - is it worth giving up her HB in return for a large lump sum and the freedom to do with that what she wishes? I know that I would choose the financial security of the lump sum, but everyone is different.

Maybe the parents could give OP a gift of £6000 each year, which would keep her under the capital limits, but wouldn't be classed as income.

Hercules98141

gcdonaldson wrote:

If your parents want to leave money to you in their wills, they might look at discretionary trusts. I and my sister are Trustees for a trust for which my brother is the beneficary. As I understand it, the money is not "owned" by my brother and doesn't count if the state wants to know about his savings. My sister and I have to agree on him recieving any capital or interest from the trust. We set this up so that he would not lose any income and housing support and partly so he would not fritter it away on motorbikes and the like. He is on a low wage (£8K year) but has been in employment for so time, which is great because at one stage we thought he would never keep a job. If you search the Mencap web-site you should see details about discretionary trusts for people with disabilities.

https://www.learningdisabilities.org.uk/html/content/discretionary_trusts.pdf

Your parents would need to consult a solicitor in drawing up their wills. The tax situation is complicated at a trust is taxed at 40% but tax can be reclaimed, but I haven't got to that stage yet as it hasn't been running for a year.

Ignore the negative comments. Prudent planning of inheritance in the end benefits society because people like my brother will be less of a drain on the state. Already, we have used the money to pay back overpayment of tax credits (£2,500) which my brother would never have been able to save up and repay, not without some real hardship.

Best wishes

Thanks GCDonaldson, your advice is being looked into right now and so far that has been the best advice we've been given.

gcdonaldson

My pleasure, also have a look at the inland revenue web site

http://www.hmrc.gov.uk/pdfs/ir152.htm

gcdonaldson

Biggles

What is it that you are getting from the council that is means tested?

Incapacity benefit and DLA are neither from the council nor means tested. Why do you feel you have to tell them about your capital?

Hercules98141

It is there in black and white on the letter i have received from the council. If you don't believe me come round to my flat and i'll quite happily show it to you.
Although, it said i had to inform them if it rises higher than £3000 - (this has got me confused though as someone else has said that this figure has risen to £6000).

Biggles

It is there in black and white on the letter i have received from the council. If you don't believe me come round to my flat and i'll quite happily show it to you

Yes but, as people have pointed out several times, you still haven't said what is in black and white.

Maybe it's Housing Benefit? Anyway, I can't see the problem as, if you're going to be left such a large sum of money, you won't need HB anyway. But if you're talking about when they die, why worry about your bank balance now when your circumstances might be quite different then.

But nobody can help if you don't give the information they've suggested.

alba37

Council Tax benefit is means tested, I think it must be that the OP is reffering to?

If the OP does not own a house then I don't see how he cannot receive a house and then go on to live in it? He would still be entitled to DLA & IB.