Surely you can' turn down an inheritance if you're on means tested benefits?

drwho2011

bored_at_home wrote: »

heres another question along the same lines, just say eg the person on means tested benefits inherited 20k but had debts for 14k they had previously had interest stopped on by sending income and expenditure form to the creditors. would they be guilty of deprivation of capital in using the inherited money to pay the creditors off?
i ask due to someones comment made regarding banking inheritance and a chunk being swallowed by the bank....

Its deprivation if you settle a debt before its due. I.e 5 year loan but paid sum off in year 1 after an inheritance.

I don't believe it would be though if the bank took it from your account without your permission if you are behind on the payments.

HappyMJ

bored_at_home wrote: »

heres another question along the same lines, just say eg the person on means tested benefits inherited 20k but had debts for 14k they had previously had interest stopped on by sending income and expenditure form to the creditors. would they be guilty of deprivation of capital in using the inherited money to pay the creditors off?
i ask due to someones comment made regarding banking inheritance and a chunk being swallowed by the bank....

A person can repay all outstanding payments to bring the account back into good order and it will not be classed as deprivation of capital.

TheCardcan

Many thanks for all the replies. It looks as if you're saying that if he doesn't take the inheritance he won't be committing fraud but (as I understand it now) have deprived himself of notional capital which might or might not be discovered

I don't know if at the back of his mind he's reluctant to accept the inheritance because it would mean losing his benefits, but I'm pretty sure he wouldn't want to decline the inheritance and have his benefits taken away too because he broke the rules.

cit_k

HappyMJ wrote: »

A person can repay all outstanding payments to bring the account back into good order and it will not be classed as deprivation of capital.

Are you sure?

I was under the impression, paying of any more than the legal bare minimum of a debt was classed as deprivation of capital.

BobQ

The OP's cousin could sign a Deed of Variation, true, but why should the state continue to support him while the money is distributed to someone else (such as the OP?). He may see some kind of moral principle in refusing it but why should the state support such a position?

I'm much more supportive of the welfare state than the present Government but we really cannot defend the indefensible. I hope he is discovered if he does this.

xylophone

ttp://www.ecadviser.com/xq/asp/sid.0/articleid.512DD554-1333-4A2E-8675-A216BB009D79/eTitle.Notional_Capital_and_Deprivation/qx/display.htm
"Deeds of Variation

This is an old chestnut. Deeds of variation potentially do amount to deprivation. Albeit there is re-writing and the dressing up of the whole thing as the act of the deceased, the reality is a re-writing fiction only for IHT and CGT. Bounty is invariably provided by the person making the deed of variation. For confirmation of this look at the stamp duty certificate, which invariably is category L - which used to be the voluntary disposition head. That said, local authorities seem not to be alive to the point, though the benefits agency certainly are. Not all deeds of variation will be caught, even those done deliberately and within a risk time frame. Supplementary benefit authority does exist which found that a daughter taking on intestacies from her father and who spread the entitlement fairly generously around her family, was accepted to have been carrying out the wishes of her father. (Perhaps it should be added that it became apparent on cross examination that she was unaware of the effect her actions would have on her benefit entitlement). That was a case probably unique on its facts but does illustrate the point that the motive behind a deed of variation might potentially take it out of deprivation."

rogerblack

The motive behind any act where you give away capital matters.
If you don't know that by giving away money you will get more benefit, that is a complete defence against any deprivation of capital rules.
The hard part would of course be proving this, even if it was in fact true.
(which it couldn't be in the OPs case)

Oldernotwiser

cit_k wrote: »

Are you sure?

I was under the impression, paying of any more than the legal bare minimum of a debt was classed as deprivation of capital.

That's what HappyMJ said!

seven-day-weekend

PoorCharleyBear wrote: »

there are quite a few of these inheritance posts- due to inherit money but on means tested benefits.

Why does almost everyone say they would rather refuse/give the money away than lose their benefits?

Surely giving it away/using it to live on has the same impact....with the possibility that if you live on it AND you start work, you are massively better off. What an incentive to get any old job to just bring some money in!

So why oh why, would most of these posters prefer to give the money away just to keep receiving benefits? Am I missing something?

If you are, so I am I. I don't understand it either....oh of course, they would have to pay their own rent, wouldn't they?

In some cases the beneficiary will still be better off.....they live off their inheritance until they have £6000 left, then they are entitled to full Benefits again, and have £6k that they didn't have before.

What is there not to like?

Oldernotwiser

Of course, there's giving and "giving" where relatives are concerned.