Money left in a will.

daveallison

Hello, First time thread from me. My Mother in Law is about to come into a sum of money from her late brother in law's estate. She is 75 and recieves a widow's pension and, I believe, a disability allowance. She has been told that when she recieves the money, her bank will be obliged to inform the Social Services, who will then reduce her benefits. Is there any truth in this rumour, and, if so, can she invest or defer the money to avoid it.

Thanks

Dave Allison

jonesMUFCforever

The bank will not divulge anything (other than an annual statement of interest earned to Inland revenue) to Social Services.
HOWEVER it is imperative that your mother in law does tell them because it will effect her benefits.
I believe that she is allowed up to £16000 capital before this kicks in.

Torry_Quine

It depends on the benefit as Attendance Allowance and Disability Living Allowance are not means tested so wouldn't be changed by any income.

Willman_Rodders

Hi Dave,

It is possible, under a Deed of Variation, to have your mother-in-laws late-brother-in-law's will amended so that she does not receive the inheritance, but it goes to another person instead. By following this action there will be no effect to her benefits ...

Sometimes there are benefits to following this course of action; in inheritance tax planning it can be very beneficial; in your mother-in-law's (MIL) case the inheritance could be granted to someone else (e.g. your wife) if your MIL did not need the money, or the gift was going to severley and detrimentally effect her benefits.

However, I would urge caution before following this route. As ejones999 and Torry Quine have hinted, you may be worrying over nothing. And even if their are implications your MIL may welcome the additional financial resources and financial freedom this inheritance provides for her in the latter years of her life.

daveallison

Thanks for the advice. I will tell her the options, and suggest that she plays it straight. She could always buy herself a harley and leave it to me in her :A will!

insured

For a deed of variation to be effective, it must be with the agreement of all beneficiaries of the origianl wil who have capacity.
That means your mother in law would have to agree with this.
If she is in agreement, this is regarded as a deliberate deprivation of assets by the benefits agency and social services, and is therfore ineffective for the receipt of benefits.
This is totally different from the DoV being effective for income tax, IHT and CGT.
If you mother in law makes the DoV to deprive herself of the assets and does not tell the benefits agency then this is benefit fraud.
Unfair maybe, but that's life.

Alfie_E

I’m left wondering what happens if a beneficiary simply disclaims any inheritance, without there being a deed of variation. I would presume their share would be distributed to any other beneficiaries, much as if that beneficiary had pre-deceased the testator. Similarly, if they were the sole beneficiary, would that mean the deceased has died intestate? These situations may cause the estate to be distributed in a way the disclaiming beneficiary would find acceptable.