Deed of Variation

getmore4less

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/236960/hbgm-bw1-assessment-of-capital.pdf

there is probably something similar more upto date.

Deciding if claimant formerly owned the capital
W1.710 You must decide on the basis of whatever evidence is available whether the claimant formerly
owned the capital. If the facts are in dispute, examples of evidence of former ownership might
be shown by
• a will bequeathing a specific sum to the claimant

plenty of other info on deciding if there is a deprivation to claim benefits and examples where the deprivation may be considered acceptable.

getmore4less

http://www.rightsnet.org.uk/forums/viewthread/6406/

Something more recent with an interesting commentary from CAB advisors on reg51

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: »

It is you have failed to produce any evidence whatsoever that executing a DOV represents deprivation of capital.

I asked the DWP and got a reply from them. Why don't you contact them and post your reply?

If the law says that a DOV or refusing an inheritance is not deprivation, why didn't the answer I received say so?

It makes no difference to your life if someone reads your posts saying it's okay to do a DOV despite them being on means tested benefits and then gets into trouble and loses state support - that's where the irresponsibility lies.

g6jns_2

Mojisola wrote: »

I asked the DWP and got a reply from them. Why don't you contact them and post your reply?

If the law says that a DOV or refusing an inheritance is not deprivation, why didn't the answer I received say so?

It makes no difference to your life if someone reads your posts saying it's okay to do a DOV despite them being on means tested benefits and then gets into trouble and loses state support - that's where the irresponsibility lies.

As I have already stated you did not ask the correct question i.e. you implied that the person had already received the money before executing a DOV. Why is it OK for your posts to be regarded as correct when you have provided no evidence whatsoever that they are? It seems you are incapable of understand logical argument and resort to casting doubt on that others say instead. One thing you have not thought about is exactly how will the DWP even know that a benefit claimant is a beneficiary under a will and that they have executed a DOV? The DWP certainly don't have the resources to trawl through the hundreds of wills admitted to probate each week and match up the beneficiaries in them with benefit claimants. Furthermore how are they going to know that a DOV has even been executed? The claimant has no obligation whatsoever to tell them. So unless a benefit claimant actually tells them of the legacy or bequest they will not even know it has happened. Hence your blethering that my advice puts claimants at risk of having the benefits cut as a result is groundless.

Mojisola

g6jns wrote: »

As I have already stated you did not ask the correct question i.e. you implied that the person had already received the money before executing a DOV.

I asked "can they make a deed of variation passing the capital onto someone else or just outright refuse the inheritance" - how does that imply that the person has already received the money?

Why is it OK for your posts to be regarded as correct when you have provided no evidence whatsoever that they are? It seems you are incapable of understand logical argument and resort to casting doubt on that others say instead.

I could ask you exactly the same thing.

One thing you have not thought about is exactly how will the DWP even know that a benefit claimant is a beneficiary under a will and that they have executed a DOV?

So unless a benefit claimant actually tells them of the legacy or bequest they will not even know it has happened. Hence your blethering that my advice puts claimants at risk of having the benefits cut as a result is groundless.

Now you've moved from "it's not wrong" to "how would the DWP find out?" - on MSE we are not allowed to help people commit fraud.

Tuesday_Tenor

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."

Mojisola, you are one of the most astute posters on this board but in this case I think the DWP response is the generic one you would expect from 'front line enquiries' and hasn't actually addressed the point at issue.

And the point at issue is such a grey area that it seems it hasn't even been properly tested in case law. I found the links from getmoreforless extremely interesting , even though they don't provide any definitive answers. Just show how complex it all is.

It's such a grey area that I wouldn't want to rely on g6jns's assertions on when ownership starts or the acceptability of complete renunciation of the legacy, either.

One for the lawyers , I think; not resolvable on this forum!

getmore4less

THe key thing with deprivation is the intent.

Exucutors/administrators are just trustees of the trust created by the death/will.

The benificial interest starts at point of death.

Allthough during administration the benificiary has no control over when they get te asset that is covered(ie you won't loose the benifits till such time as you could get the asset(s)) deliberately declining or doing a DOV is highly likely to be deprivation under the rules but could be exempt if there are other good reasons that are covered that make the primary reason not claiming benifits/care.

Mojisola

Tuesday_Tenor wrote: »

Mojisola, you are one of the most astute posters on this board but in this case I think the DWP response is the generic one you would expect from 'front line enquiries' and hasn't actually addressed the point at issue.

And the point at issue is such a grey area that it seems it hasn't even been properly tested in case law. I found the links from getmoreforless extremely interesting , even though they don't provide any definitive answers. Just show how complex it all is.

It's such a grey area that I wouldn't want to rely on g6jns's assertions on when ownership starts or the acceptability of complete renunciation of the legacy, either.

One for the lawyers , I think; not resolvable on this forum!

I have written back to them, pointing that out, and asking for clarification on the specific points of refusing an inheritance or making a DOV before any inheritance is distributed.

It's a very simple question that should have a yes/no answer.

If they won't state that it definitely is deprivation, I'll suspect that the answer is "No, it isn't deprivation but we don't want to tell people because then more people will use the loophole and carry on claiming benefits" and I'll ask my MP to confirm that this the legal position.

As g6jns says - both things are acceptable and legal ways of avoiding paying IHT.

I don't have any issue with being proved right or wrong - on a couple of occasions I've posted wrong advice in the past which other posters have picked up on and I've corrected the mistake and made sure I changed what I said in future - I'd just like to know the position the DWP takes on the issue as they are the ones who have to power to cut off people's benefits.

I don't want someone's life to end up in a mess because they've been advised on a forum that it's okay to refuse an inheritance.

getmore4less

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.

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.

The key is beneficial ownership not the legal one and the executor only a legal owner as a trustee.

getmore4less

Mojisola wrote: »

I have written back to them, pointing that out, and asking for clarification on the specific points of refusing an inheritance or making a DOV before any inheritance is distributed.

It's a very simple question that should have a yes/no answer.

If they won't state that it definitely is deprivation, I'll suspect that the answer is "No, it isn't deprivationbut we don't want to tell people because then more people will use the loophole and carry on claiming benefits" and I'll ask my MP to confirm that this the legal position.

As g6jns says - both things are acceptable and legal ways of avoiding paying IHT.

I don't have any issue with being proved right - on a couple of occasions I've posted wrong advice in the past which other posters have picked up on and I've corrected the mistake and made sure I changed what I said in future - I'd just like to know the position the DWP takes on the issue as they are the ones who have to power to cut off people's benefits.

I don't want someone's life to end up in a mess because they've been advised on a forum that it's okay to refuse an inheritance.

Not all assets disposals result in the notional capital being counted, If there are good(primary) reasons to be giving the capital away then it may not be counted.

The example(W1.730) used in the link was pay off a childs(adult) debt to stop them getting a house reposessed.