How can we Protect my Sister's Inheritance

willieormandsheroes

...and so mum has passed away - and we are going through execution of mum's will. Putting aside the questions I raised before about this in respect of my sister and her husband - the related question is now what should she do with it. She is thinking of buying a flat/house and renting it out. As she has no private pensions this property would be her investment for her retirement years. But what happens to her means tested benefits in the meantime - so income support, council tax?, housing benefit? She will likely spent much or most of her inheritance and I can see how this would be viewed as deprivation of capital. But would her benefits be reduced in accordance with any rental income she gets - or on the basis of the original inheritance, If the latter then she'd most likely lose all means tested benefits.

But if she is investing in a property for her future and retirement would she not be encouraged to do that? But if she does and the whole inheritance is taken into account then she'd have to live on the monthly rental income - and that's not going to be very much?

paddy's_mum

RAS wrote: »

Your sister needs to see a good Scottish divorce lawyer PDQ.

Firstly, condolences on the loss of your mother.

However, it sounds as though you have yet to take the oft repeated advice to seek solid legal advice.

It's your choice, of course, but what's the point of floundering around making hopeful guesses and shots-in-the-dark about the best way to go on when a clearly sign-posted way to progress is open to you?

Sometimes, certainty is worth every penny it took to get it. Good luck.

greyfox

willieormandsheroes wrote: »

... She is thinking of buying a flat/house and renting it out. As she has no private pensions this property would be her investment for her retirement years. But what happens to her means tested benefits in the meantime - so income support, council tax?, housing benefit? She will likely spent much or most of her inheritance and I can see how this would be viewed as deprivation of capital.

It wouldn't be deprivation of capital as she's simply converted one type of capital (cash) into another (a flat/house). The value of that flat/house would be taken into account in the same way as cash. In practice she would lose all means-tested benefits, as would her husband (if they're still together) as they'd be treated as one unit for these benefits.

willieormandsheroes

Unfortunately I can't get my sister to seek advice from a solicitor or divorce lawyer on her situation - as much as we might support her in doing that. She tells us that her hubby seems OK with her at the moment (what a surprise) and whilst the going is good (i.e. better than terrible) she won't do anything. BTW - he has told my sis that the reason he had been treating her as he had been through mum's illness was that he didn't like her spending so much time with mum - nothing to do with him not being able to cope or otherwise whilst she was away. Ho hum.

And I guessed that whatever was done with the inheritance she receives it will stop all means tested benefits - though ironically I suppose as Disability Benefit her husband receives won't go as it is not means tested - or so I believe, I have explained to her that she will be paying for everything - including their housing association house that isn't in her name. I've asked her to check if buying a property herself in any way changes their status in respect of their house - so could they no longer qualify to live there?

Anyway I will continue to see if I can find a way with her through this situation - a situation that should be life changing for her as she has never had ANY money and has nothing set aside for retirement or for a personal pension.

greyfox

willieormandsheroes wrote: »

And I guessed that whatever was done with the inheritance she receives it will stop all means tested benefits - though ironically I suppose as Disability Benefit her husband receives won't go as it is not means tested - or so I believe,

I think you said your sister gets Carer's Allowance so her husband must be getting DLA or PIP. None of these benefits are means-tested.

willieormandsheroes

Yes - that's right - she gets Carers Allowance.

t0rt0ise

Your sister can't buy a property with this money. She needs it to live off, to pay the rent and the bills. If she buys a property, when the money runs out she'll then have to sell it to pay for the same things. She is married so what's hers is his etc., even if you don't think she should be married. All you can do is continur to support her.

willieormandsheroes

OK - @t0rt0ise gives me an answer I rather expected. My sister will have to pay all the rental on the housing association she and her husband live in - though I'll ask that is this still the case even although the property is in his name and she is not named against the property? I'm guessing it does.

And I also assume that the inheritance she gets (it will be a good bit over £50k) will mean that all means-tested benefits she and her husband get will be stopped. So income support will go. I assume his PIP or other disability allowance that husband gets will remain as I understand that it is not means-tested. Similarly carers allowance he gets for my sister will remain as not means-tested?

And related question.

The Executor of my mother's estate is not getting 'on with it' very quickly. Meanwhile my sister and her husband continue to receive means-tested benefits. What is the situation for her in that respect. Will they owe money back - are they breaking the law; is the Executor 'complicit' if they are? What is the timescale to execute my mother's will - because for as long as it is not executed I can see a potential issue for my sister building up in respect of benefits received but potentially not due.

Many thanks - WOH

Malthusian

willieormandsheroes wrote: »

The Executor of my mother's estate is not getting 'on with it' very quickly. Meanwhile my sister and her husband continue to receive means-tested benefits. What is the situation for her in that respect. Will they owe money back - are they breaking the law; is the Executor 'complicit' if they are?

Until the estate is distributed and the money is in her account it belongs to her mother's estate, not her. Nothing to worry about on that front.

Estates can take years to wind up. It isn't often clear how much a beneficiary is going to get until it is all settled, and the use of Deeds of Variation means that someone can be named in the Will but get nothing (of their own volition). Means-tested benefits don't assess you on money you might get in the future but haven't yet and might not ever.

No idea how long it might take, it depends on what kind of property's in the Estate, what the Will says, how efficient the executors are and a host of other factors.

Others will be able to answer the questions about benefits better than I.

Mojisola

Malthusian wrote: »

the use of Deeds of Variation means that someone can be named in the Will but get nothing (of their own volition). Means-tested benefits don't assess you on money you might get in the future but haven't yet and might not ever.

But if you give up an inheritance, you will be assessed as if you received it and benefits may be stopped.