Deed of Variation

Mojisola

Mojisola wrote: »

Well, I asked the question -
"If a person is receiving means tested benefits and is left an inheritance, can they make a deed of variation passing the capital onto someone else or just outright refuse the inheritance and continue to claim benefits or would these actions be seen as deliberate deprivation of capital?"

and got the reply -
"In all the income-related benefits, if a person has spent or given away any of their capital, the local authority/social security decision maker has to consider whether that person has deprived himself/herself deliberately of a capital resource with the intention of securing or increasing entitlement to benefit. Where this is believed to be the case, that person will be treated as still possessing that capital when entitlement to benefit is assessed."

What did your written reply say?

g6jns wrote: »

In which case why did you say that you asked a different question? The EXACT wording is crucial. Exactly, word for worde what question idid you ask?

Word for word as above.

Mojisola

g6jns wrote: »

Quite wrong. The crucial point is that the benefit claimer did not, at any time own the money.

If you are left an inheritance, it is yours unless you give it away through a DOV or by refusing it. If it isn't yours, why do you have to sign forms to say you agree to give it away?

If someone's Dad wants to pay off a child's debts, that is a different scenario.

g6jns_2

Mojisola wrote: »

If you are left an inheritance, it is yours unless you give it away through a DOV or by refusing it. If it isn't yours, why do you have to sign forms to say you agree to give it away?

If someone's Dad wants to pay off a child's debts, that is a different scenario.

Sorry but you have misunderstood the legal position of ownership. Until the bequest or legacy is actually paid the ownership remains with the executor. The money is due to the beneficiary but they don't actually own it. Until they do have ownership of it they cannot deprive themselves of it. As for the forms you don't actually have to fill any out any to reject an inheritance. A simple signed statement will suffice.

The paying off of the debt employs the same principle i.e. the child never has possession of the money so they cannot deprive themself of it.

Crabapple

But surely, signing a DoV is different to refusing an inheritance.

You are not saying I don't want this money - and therefore leaving it with the Executors. You are saying, I don't personally want this money, but I want it to go to X. The Executors can't decide to leave it elsewhere without your approval.

Unless things have changed you used to have to include a statement in a DoV saying that the change was not intended to defraud creditors. If you were bankrupt you could not refuse the funds and hand them to another person rather than pay your debts.

I'm not sure that I see how it could be any different if you were signing a DoV simply to ensure that you kept receiving means tested benefits.

Mojisola

g6jns wrote: »

Sorry but you have misunderstood the legal position of ownership. Until the bequest or legacy is actually paid the ownership remains with the executor. The money is due to the beneficiary but they don't actually own it. Until they do have ownership of it they cannot deprive themselves of it. As for the forms you don't actually have to fill any out any to reject an inheritance. A simple signed statement will suffice.

I think you have misunderstood the position the DWP takes on the issue.

g6jns_2

Crabapple wrote: »

But surely, signing a DoV is different to refusing an inheritance.

You are not saying I don't want this money - and therefore leaving it with the Executors. You are saying, I don't personally want this money, but I want it to go to X. The Executors can't decide to leave it elsewhere without your approval.

Unless things have changed you used to have to include a statement in a DoV saying that the change was not intended to defraud creditors. If you were bankrupt you could not refuse the funds and hand them to another person rather than pay your debts.

I'm not sure that I see how it could be any different if you were signing a DoV simply to ensure that you kept receiving means tested benefits.

As far as the present scenario is concerned there is no difference as far as the person renouncing the inheritance is concerned. What the deed says is I don't want the money but it should go to X. The person renouncing the money never actually has possession of it. The most common use of a DOV is to avoid double IHT and as I am sure you know HMR&C are quite happy to allow this. In such an instance I am sure HMR&C would not allow it if the need not do so.

g6jns_2

Mojisola wrote: »

I think you have misunderstood the position the DWP takes on the issue.

I do not misunderstand the the DWP position as it largely irrelevant since they do not make the law.. Ultimately it is what the Courts say that matters. It is a very well established principle that a DOV does not mean that the beneficiary takes and then gives the money away. Consider what happens with the most common use of DOV where a beneficiary executes a DOV to prevent the money becoming part of their estate and subsequently being subject to IHT. HMR&C are quite happy with this.

Mojisola

g6jns wrote: »

I do not misunderstand the the DWP position as it largely irrelevant since they do not make the law.. Ultimately it is what the Courts say that matters. It is a very well established principle that a DOV does not mean that the beneficiary takes and then gives the money away. Consider what happens with the most common use of DOV where a beneficiary executes a DOV to prevent the money becoming part of their estate and subsequently being subject to IHT. HMR&C are quite happy with this.

But benefits claimants aren't dealing with HMRC.

Very few people living on means tested benefits have the financial means to take the DWP to court to try to prove a point. For almost everyone, if the DWP say you've given away money that you should have accepted, you're scuppered.

I think it's irresponsible to advise people that the DWP does not consider refusing an inheritance or making a DOV deliberate deprivation of capital when you don't have any evidence.

g6jns_2

Mojisola wrote: »

But benefits claimants aren't dealing with HMRC.

Very few people living on means tested benefits have the financial means to take the DWP to court to try to prove a point. For almost everyone, if the DWP say you've given away money that you should have accepted, you're scuppered.

I think it's irresponsible to advise people that the DWP does not consider refusing an inheritance or making a DOV deliberate deprivation of capital when you don't have any evidence.

You have again missed the point. Executing a DOV is not, repeat not, giving away anything. Executing a DOV, as has been previously explained, is waving your entitlement in favour of someone else. You cannot give away what you have not received. That is the fundamental legal principle that underpins the DOV procedure if it is for IHT or other purposes.

It is you have failed to produce any evidence whatsoever that executing a DOV represents deprivation of capital. In fact despite detailed explanations of why it is not deprivation you continue to claim it is. If anyone is being irresponsible it is you because you just cannot bear to admit you are wrong.

getmore4less

The beneficial interest starts on date of death.

You can't hide assets through legal ownership.