Tricky inheritance issue and possible impact on benefits (deprivation of capital)

Cleaving

Hello,

This is my first post and I'm looking for some helpful advice, to help me help my Mum who is rather stressed and worried about an inheritance she is set to receive from her late Mother's estate. I've read similar threads, but this situation does not seem to have been addressed directly as yet.

My Mum is due to inherit 50% of an estate valued at £65,000. There are two strands to this issue 1) that my disabled mum is currently receiving means tested benefits whilst she looks for work and 2) that she has an informal agreement with her Brother to give him money out of her own half of the inheritance. This is because over the last 8 years or so, her Mum was in a care home and my Mother had power of attorney over her affairs. She visited her daily and regularly withdrew money for haircuts, 'pocket money', maintenance of the property which was tenanted (and not part of this inheritance and it was signed over to LA), birthday gifts for the grandchildren and great grandchildren etc. My Mum deeply regrets it, but she did not keep receipts etc for all of the expenditure so she cannot account for everything and it has caused her Brother to feel aggreivaed that she may have benefited in some way from this and he has 'missed out' whilst living out of the country the whole time. The fact that he had £16,000 a number of years a go to renovate his house has escaped him. Nevertheless, my Mum has agreed that she will give him some of her inheritance to clear the air and because, quite frankly she is too scared to challenge it. (there are lots of family issues there that it will be difficult to explain or people to understand from this post)

Anyway, I have told her that I think this will create an issue for her and that she will be breaking the law if she follows her brothers wishes and pays him some money out of her inheritance (£9,000). Obviously, when she inherits the money she will declare it and will then come off benefits and live off the inheritance. Hopefully she will be able to find employment again, but being disabled it is difficult and her options are limited. In the event that she needs to claim benefits again once the money runs out and if she cannot find another job, I am concerned that she will be deemed to have deprived herself of capital, by giving her Brother some of her inheritance. It will be perceived that she has done it to spend the money more quickly, to become eligible to claim benefits again. They would not accept the fact that she was 'paying her brother back' on an informal basis, but then if she agreed to officially vary the will then she will probably still fall foul of the deprivation of capital rules. I would like her to have the money that I think she is rightly entitled to, as it would give her a bit of a comfort blanket and assist her to buy an automatic car (because of her disibility) so she could have more chance of getting a job etc and so I am trying to convince her that she should stand up to her brother and if she doesn't she will get in to trouble.

I know this all sounds terribly odd, but if anyone has any helpful advice about what my Mum's options might be in this situation.

Thanks.

mazza1985

You have given your mum good advice. It would indeed be deprivation of capital.

princessdon

Is the brother getting the other 50%?

rogerblack

In short - as above.
32K-9k = 23K.
She will come off (guessing) IS, CTB, and possibly LHA/HB.

She may be expected when she comes to sign back onto benefit to account for the way she has spent these.
If any expenditure is extravagant, then she may be treated as if she still has this money (notional capital).
If it is only the 9K, then this will affect the amount of benefit recieved by 9000-6000/250 = =12 pounds a week, for all of the above benefits.
(so, if claiming IS, CTB, HB, 36 pounds a week).

The 'notional capital' then drops by 12 pounds (not 36) a week, so after 5 years, it reaches 6000, and no longer affects benefit.

Any capital she still has left over adds onto this 'virtual' 9000 pounds.

That is if they decide to treat it as money intentionally given over for the primary purpose of gaining more benefit.
From a benefits POV, attempting to move money into trusts, or vary the will, or such, is also useless. If you are able to claim it legally, then you must.

It _may_ be treated as deprivation of capital.
The best option may be to get a letter from the brother about why he feels he should get something (ideally, this would be as overblown as possible), and a letter from her about what she intends to do, and ask for a decision.
Letters from others about their view of the inheritance may be positive.

This at the least gives certainty, and if there is a no, it's a very good reason to say no to the brother, and outline the consequences (-36/week if she fails to get work, totalling nearly 5K)
Also, if she was not giving the money away, there is some 'wiggle room' for deprivation of capital.
If she's determined to have deprived herself of 3K, for example, it would not have any effect on her benefit once her savings were down to 3K.

Cleaving

princessdon, to answer your question, yes, her brother is getting the other 50%.

princessdon

Can you alter the payment from the solicitor so the z9k doesn't hit her accounts?

Mojisola

Cleaving wrote: »

My Mum is due to inherit 50% of an estate valued at £65,000.

over the last 8 years or so, her Mum was in a care home and my Mother had power of attorney over her affairs. She visited her daily and regularly withdrew money for haircuts, 'pocket money', maintenance of the property which was tenanted (and not part of this inheritance and it was signed over to LA), birthday gifts for the grandchildren and great grandchildren etc.

My Mum deeply regrets it, but she did not keep receipts etc for all of the expenditure so she cannot account for everything and it has caused her Brother to feel aggreivaed that she may have benefited in some way from this and he has 'missed out' whilst living out of the country the whole time.

The fact that he had £16,000 a number of years a go to renovate his house has escaped him. Nevertheless, my Mum has agreed that she will give him some of her inheritance to clear the air and because, quite frankly she is too scared to challenge it. (there are lots of family issues there that it will be difficult to explain or people to understand from this post)

Go with your mother and get some legal advice and help her stand up to this blackmail.

rogerblack

princessdon wrote: »

Can you alter the payment from the solicitor so the z9k doesn't hit her accounts?

This is absolutely positively deprivation of capital.
It's straightforward and unarguable.
If you do this, you are deliberately depriving yourself of it, and risk possible prosecution for attempted benefit fraud.
It's not 'hitting accounts' that is important.
It's being able to claim something legally that you did not.
Taking a positive act to attempt to avoid claiming it makes it much clearer that you are intending to avoid the deprivation of capital rules.

If you ask beforehand, and make a good case, there is a chance it might not be seen as deprivation of capital.
(and indeed, that is a decision you can appeal)

bestpud

I agree it can easily be classed as deprivation of capital and she would be very silly if she goes ahead with it.

He should seek legal advice if he thinks he has a claim on the money.

bestpud

How much cash did she actually spend 'on her mother's behalf' while she was in the home?

I'm guessing it was rather more than the average elderly lady in a care home would need...?

So, if the brother kicks up a stink she could be up the proverbial creek without a paddle....?

dseventy

She can give money to whoever she wants to.

If however she is on mean tested benefits they will just treat her like she still has it.

D70