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Inheritance & benefits

mikk
Posts: 27 Forumite
I am executor to an estate solely comprised of a house worth between 70 to 80k. Beneficiary A will receive 50% when sold, and five others will receive 10% each. Beneficiary A receives guaranteed pension credit, HB,CTB some dla equivalent
1. Is there any truth in this forum comment :-
As I understand it, if you are entitled to Guaranteed Pension Credit you will be passported to full HB/CTB even though your capital may be over £16,000. These are the only group of people who, I believe, can get HB/CTB if they have savings over £16,000. If you are only entitled to Pension Savings Credit and you have savings over £16,000 then you are disqualified from HB/CTB
2. Is there any way via deed of variation or otherwise of 'A' passing the 50% to beneficiary son B who is more in need as he wishes to obtain a mortgage for the said house, without A losing benefits?
3. If A disclaims the 50%, who decides and how is the share re-distributed and would this be regarded as deprivation?.
4. Which assets are not regarded as deprivation?
5. Could A's share be put into a bare trust retrospectively via a DOV or otherwise?
I understand there are moral issues here but would appreciate any help from a legal point point of view.
1. Is there any truth in this forum comment :-
As I understand it, if you are entitled to Guaranteed Pension Credit you will be passported to full HB/CTB even though your capital may be over £16,000. These are the only group of people who, I believe, can get HB/CTB if they have savings over £16,000. If you are only entitled to Pension Savings Credit and you have savings over £16,000 then you are disqualified from HB/CTB
2. Is there any way via deed of variation or otherwise of 'A' passing the 50% to beneficiary son B who is more in need as he wishes to obtain a mortgage for the said house, without A losing benefits?
3. If A disclaims the 50%, who decides and how is the share re-distributed and would this be regarded as deprivation?.
4. Which assets are not regarded as deprivation?
5. Could A's share be put into a bare trust retrospectively via a DOV or otherwise?
I understand there are moral issues here but would appreciate any help from a legal point point of view.
0
Comments
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http://www.dootsons.co.uk/wp-content/uploads/2015/01/Dootsons-Deeds-of-Variation-sr.pdf
However, if a beneficiary is receiving means tested benefits, a Deed
of Variation cannot be used to redirect his entitlement from the deceased’s
estate to prevent benefits being disallowed because under these
circumstances it will be seen as a gift from the beneficiary.
http://www.ageuk.org.uk/Documents/EN-GB/Factsheets/FS48_Pension_Credit_fcs.pdf?dtrk=true0 -
You are the executor. It is your job to execute the will. It's not your job to worry about the finances of a beneficiary.
Yes, getting a lump sum of 35k may well effect Beneficiary A's means tested benefits. But mucking about with deeds of variations or trusts would be regarded as deprivation of capital by the DWP.0 -
If the claimant is in receipt of Guarantee Pension Credit then the capital is ignored for HB/CTR. They will continue to receive full help.These are my own views and you should seek advice from your local Benefits Department or CAB.0
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There are about 80 different benefits someone might get. They have different rules, in particular regarding savings & assets: (eg State Pension you can have £100k in the bank, no problem, but HB you may get something if savings are below £16k).
As above, you are executor, what happens to someone's benefits is not your problem.
And beware varying the terms to suit someone: I thought there was a case where someone was due a large sum from a will but had the will varying so they (hoped they would) continue to benefits. It was found that was deprivation of capital, they were assessed as having the large sum & lost sum & benefits. - Or do I remember incorrectly? Unless inheritance is promptly used to buy their primary residence. See..
http://www.thelawforum.co.uk/deed-variation-law0 -
Capital for Guarantee Pension Credit is deducted from it at the rate of £1 for every £500 over £10000. So, if A inherited £35000 then he would have £50 deducted form his GPC (presuming no other savings) per week.
Person A may also have an assessed income period where he does not have to declare extra capital during the assessed income period.
It is possible that if person A is receiving a severe disability element within his GPC then he will still be entitled to GPC. (and thus full HB and CTB as housing benefit officer has said.
Person A needs to look at his GPC letter and find out exactly how his entitlement is made up and whether he has an assessed income period.
He could go to CAB for a full benefits check.0
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