Deed of Variation

g6jns_2

Mojisola wrote: »

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.

Your replies get ever more absurd. To suggest that I am advocating fraud is ludicrous. Not telling the DWP something that is of no concern or benefit to them is not fraud. As for the DWP they are not the arbiters of the law. The problem with asking questions of the DWP as you have done is that the reply did not actually answer your question but just gave generic advice. Furthermore you have no idea if the person replying was sufficiently senior to fully understand the underlying legal principles involved. I actually spoke to my solicitor today on another matter regarding DOVs and also asked her about this matter. She confirmed that executing a DOV before the estate is distributed is not deprivation.

Mojisola

g6jns wrote: »

She confirmed that executing a DOV before the estate is distributed is not deprivation.

Is that her opinion or can she direct to some evidence?

securityguy

g6jns wrote: »

She confirmed that executing a DOV before the estate is distributed is not deprivation.

And here's a firm of solicitors who are willing to go into writing disagreeing with yours:

http://www.hague-lambert.co.uk/sheets/Deeds%20of%20variation.pdf

Who's to say who's right?

If you execute a Deed of Variation now and then enter into a nursing home in the near future, there is the potential for the Local Authority to claim against you stating that you have deliberately deprived yourself of assets because at the time the Deed of Variation was made, you knew or suspected you would enter into a nursing home and you made the Deed of Variation in order to give assets away which would otherwise have been used to pay for nursing home fees. The burden of proof in this instance is on the Local Authority.

But hey, it doesn't matter what solicitors say. Let's look, instead, at the Department of Social Security "Decision Maker's Guide", Chapter H1, Capital.

H1175 Pending the completion of the administration, a beneficiary without a specific bequest (a residuary beneficiary) has valuable rights in the form of a chose in action (see H1036). This can be valued (H1643) and should be taken into account as actual capital. If the residuary beneficiary gives away his interest by a deed of variation before administration is complete then this may amount to deprivation and the DM should consider H1815 et seq.

Ah, you'll say, but that's only residuary beneficiaries! No matter, they've got that covered:

H1176 At the end of the period in H1173 the people named in a will or the relatives of a person who has died have a right to the capital that is due to them from the estate (see H1035). A person's rights to capital are included when working out that person's capital. (my emphasis)

That's absolutely clear: your right to capital is included in working out the capital you have. Not the capital you accepted: the right to capital is valued at par. You can sign away the capital itself, but you can't sign away the right you had to receive it.

That's pretty much the end of the discussion. Unless you're in a position to challenge DWP/DSS practice, the current position is that a bequest of a certain sum in a will is counted as part of your capital, whether or not you accept it. Overturning it is going to require judicial review (or at least a social security and child support tribunal) challenge of the current practice manual.

g6jns_2

securityguy wrote: »

And here's a firm of solicitors who are willing to go into writing disagreeing with yours:

http://www.hague-lambert.co.uk/sheets/Deeds%20of%20variation.pdf

Who's to say who's right?



But hey, it doesn't matter what solicitors say. Let's look, instead, at the Department of Social Security "Decision Maker's Guide", Chapter H1, Capital.



Ah, you'll say, but that's only residuary beneficiaries! No matter, they've got that covered:



That's absolutely clear: your right to capital is included in working out the capital you have. Not the capital you accepted: the right to capital is valued at par. You can sign away the capital itself, but you can't sign away the right you had to receive it.

That's pretty much the end of the discussion. Unless you're in a position to challenge DWP/DSS practice, the current position is that a bequest of a certain sum in a will is counted as part of your capital, whether or not you accept it. Overturning it is going to require judicial review (or at least a social security and child support tribunal) challenge of the current practice manual.

Thank you for that. I have just spent the last two hours reading through the regulations and I have to concede that they have closed just about all the loopholes. The advice given by my solicitor appears to be wrong and I will ask her again in view of the regulations. I am still puzzled by one aspect which is what I have always understood to be a fundamental principle that nobody could be forced to accept an inheritance under a will. I suppose it comes down to the scale of the inheritance. It is obviously open to the beneficiary to accept the money and suffer a reduction in benefits until they have spent it. Whilst I could not advocate, or condone, it I do wonder if, in practical terms, the DWP could actually establish that a DOV had been executed unless the claimant told them.

securityguy

"nobody could be forced to accept an inheritance under a will"

They're not being forced to accept an inheritance. I think you're rather missing the point of the regulations.

Someone applies for a benefit. The rules for that benefit include an assessment of means. The definition of means is specific to that assessment, and include capital that you are deemed to control or have a reasonable expectation of receiving (effectively, you are regarded as having all assets that you either possess or could reasonably be expected to possess).

If you don't want to accept the inheritance, you can choose to either have the assessment made as though you have the inheritance, even if you don't, or you can withdraw from the assessment and not receive the benefit. At no point are you forced to accept the inheritance, it's just that there may be consequences relating to that specific benefit in not doing so.

securityguy

"Whilst I could not advocate, or condone, it I do wonder if, in practical terms, the DWP could actually establish that a DOV had been executed unless the claimant told them."

There are endless opportunities to lie on means tests. It's a matter of the morality and risk appetite of the applicant as to whether they think they're going to get away with it.

getmore4less

Inheritance/trusts, tax, benefits.

There are very few solicitors that do all 3 competently.

Ol_Jay

Interesting thread, though some of it has probably gone over my head

What would happen where one person on benefits does a DOV and that means a second person,also on benefits, receives a lump sum?

Surely then the person receiving through the DOV loses,rightfully, some of their benefits but also the person "giving" would too,if it's deemed deprivation of capital?
Also,poss consequences for their estate if dying within 7 years?

securityguy

Potentially, Jay, the state gets a two for one: both would lose their benefits by the full amount of the sum involved. I don't see any provision in the regulations to limit the DOV to only stopping one person's benefits.

g6jns_2

Ol_Jay wrote: »

Interesting thread, though some of it has probably gone over my head

What would happen where one person on benefits does a DOV and that means a second person,also on benefits, receives a lump sum?

Surely then the person receiving through the DOV loses,rightfully, some of their benefits but also the person "giving" would too,if it's deemed deprivation of capital?
Also,poss consequences for their estate if dying within 7 years?

A good point! The Government get two bites at the cherry. As the saying goes there are only two certainties in life: death and taxation!