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

Cleaving

Thanks again, everyone.

It seems to me that she needs to take her rightful inheritance (I think it is due imminently) and you have made me see that in the mean time, she will need to explain the situation to her Brother (i.e. that she cannot just give him the money he demands), but they could put forward a case if nescessary over the coming weeks and get an official/legal opinion on it so that if she ever needed to reclaim any benefits again in the future she would not be disadvantaging herself.

Thanks,
Cleaving

antrobus

gregbythesea wrote: »

My brother was entitled to an inheritance (£165,000) that would have taken him over the capital limits. As it was an intestate estate, and he was the administrator, all of his entitlement was split 50/50 with his two children. The payments were made directly to the children. He never received a penny other than a few hundred for his expenses.

This was done on the basis that his children had in the past been supported financially by the deceased and could in their own rights claim an entitlement of the estate.

In order to avoid a lengthy court case and costs, it was decided that this was the best way forward.

That was 11 years ago.

Whether it was the right or wrong way to go about it, it suited the family and my brother. He still continues to this day to claim a means tested sickness benefit because of depression, stress and arthritis.

Well I wouldn't go 'bragging' about that sort of thing on an open internet forum. All that means is that the DWP now have 11 years worth of benefits that they can claw back from your brother should they ever work out what he's done.

Mojisola

Cleaving wrote: »

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.

Cleaving wrote: »

It seems to me that she needs to take her rightful inheritance (I think it is due imminently) and you have made me see that in the mean time, she will need to explain the situation to her Brother (i.e. that she cannot just give him the money he demands), but they could put forward a case if nescessary over the coming weeks and get an official/legal opinion on it so that if she ever needed to reclaim any benefits again in the future she would not be disadvantaging herself.

Just to be clear - was the money she withdrew from grandmother's accounts used for grandmother's expenses or was your mother using it as her own personal money?

If it was only used for your grandmother, your mother doesn't have to hand over any of her inheritance to her brother.

antrobus

gregbythesea wrote: »

I'm not 'bragging'. I am telling it as it is.

My point was that you should be wary of 'telling it as it is' on an open internet forum, as you don't know who's listening. The arrangements entered into by your brother are clearly 'deprivation of capital'.

gregbythesea wrote: »

.The DWP couldn't treat the children as having the capital AND my brother - it would be one or the other.

DWP would treat the brother as having the capital.

gregbythesea wrote: »

...Anyhow all of this is in writing and the other beneficiary agreed that it was for the best.

In an intestacy, the estate passes in accordance with statutory rules. It's not up to people to make it up as they go along. The fact that it was 'all in writing' simply means that there is evidence that could be used against them.

It used to be the law that the children of a person who disclaimed an inheritance on intestacy could not inherit through that person because they were still alive. That law was only changed by the Estates of Deceased Persons (Forfeiture Rule and Law of Succession) Act 2011, and so clearly did not apply when the brother inherited 11 years ago. So you can see the kind of trouble that your brother might be in.

xylophone

The brother was entitled to the money under the rules of intestacy. Whether he gave it to the cats' home or his children he made a gift and thereby wilfully deprived himself of capital. It is immaterial that the other beneficiary agreed.
That the deceased had helped to support the children is immaterial unless they could make a case in law that they had the right to such support and to continuing support from the intestate estate.
It seems to me that if ever the DWP find out what your brother did, he could find himself in very hot water....

xylophone

Unfortunately he died without making a will.

exactly so - so there was no proof that he intended any continuation of any previous arrangement.

Yes both children had been supported to a great extent (the deceased paid for the children to both have a private education and supported them both through university).

But unless the deceased had legal obligations towards the children they had no right whatsoever to expect or require that the deceased made this gift.
The children might have felt that they had a claim but this seems to me to be tenuous at best - I think that the DWP would require this to have been tested through the courts- otherwise the potential for all sorts of abuse exists?

Cleaving

Mojisola,

The money was to generally used to pay for things like taking my nan out, clothes, shoes etc, money in cards from her at birthdays and christmas for grandchildren and great grandchildren. I know there was £250 given towards a grandchild's wedding - this may seem extravagent possibly, but treating and caring for her family was something that my Nan always did, even when she started to become ill. Also, I know that my Nan's money paid for shoes for my Mum, for example. Because it's something that she always used to go on about because of my Mum's disibility and so used to say to Mum to buy herself some comfy shoes.

I think her brothers issue is that I suppose my Nan could have just had second hand clothes, not given gifts etc and then there would have been a larger inheritance for him and he was dissapointed that although she was living in a care home, money was still spent on having clothes to make her feel nice etc, but had she continued to be able to live independently for all those years, she certianly would have acted in the same way I'm sure.

Fair enough, if my Mum had used money to go on holiday whilst my Nan suffered as a result and couldnt afford basic things that would be incredibly serious, but of course my Mum would never have done that because for her it isn't about money, but that's what I'm worried about, that she is going to stupidly give her Brother some of her inheritance because he's made her feel guilty and actually she will then suffer as a result if she ever needs to claim benefits.

Also, he did have POA also and access to bank accounts etc so he could have got involved if he wanted to, it's just that he has lived abroad for the last 25 years and never really been involved in my Nan's care unfortunatly.

It's such a shame that things have to come to this. The advice has been very helpful, thanks.

xylophone

I am perfectly aware of an executor's (administrator's) responsibilities - I am also aware that there can be conflict of interest.
I also know all about legitimate estate planning.
A real threat? Did the children have the money to sue the estate?
What right did they have anyway? Their grandfather had made gifts. He was under no obligation to continue to do so and neither was the estate?
I wonder was the DWP advised of the situation at the time so that a view could be taken?
As for the DWP having no say, do they not have a say and take a view every day in deprivation of capital issues?

And in fact is theirs not usually the final word because the sanctions lie in their power?

I do not recall using the word 'scam' - why have you?

Mojisola

Cleaving wrote: »

The money was to generally used to pay for things like taking my nan out, clothes, shoes etc, money in cards from her at birthdays and christmas for grandchildren and great grandchildren. I know there was £250 given towards a grandchild's wedding - this may seem extravagent possibly, but treating and caring for her family was something that my Nan always did, even when she started to become ill. Also, I know that my Nan's money paid for shoes for my Mum, for example. Because it's something that she always used to go on about because of my Mum's disibility and so used to say to Mum to buy herself some comfy shoes.

I think her brothers issue is that I suppose my Nan could have just had second hand clothes, not given gifts etc and then there would have been a larger inheritance for him and he was dissapointed that although she was living in a care home, money was still spent on having clothes to make her feel nice etc, but had she continued to be able to live independently for all those years, she certianly would have acted in the same way I'm sure.

That's disgraceful! Your mother needs to stand her ground for two reasons - one, the problem of DOC, and two, he isn't entitled to any more than his share!

Your grandmother was entitled to spend her money (or have it spent for her) in the same way as she had done before she went into the care home. Why should she live in second-hand clothes and not have any little pleasures in life?

somethingcorporate

gregbythesea wrote: »

The DWP would have no jurisdiction over the matter, so suggesting that they would like it tested in court is nonsense.

The decision of the administrator is final.

You are very wrong on this point as the DWP provide benefits to support this person who deprived themselves of a serious amount of capital. They may not be able to undo the allocation of capital, but they can treat the parties as if they still have the capital (even if they don't) which would mean a claw-back of 11 years worth of benefit.

It sounds to me like the administrator abused their position.