Is delaying inheritance until 65 so that it doesn't inflict on benefits allowed?

Jack1997

Hi there, after some advice.

My Mum has been waiting a year for her inheritance from her Mum, my Grandmother. Probate was granted last year, but the solicitors told us we must wait a year for her estate to be paid out (note, there was no house needing to be sold etc, my Grandmother had mostly just money in the bank) in case anyone wanted to contest the will. Fine, she waited a year. My Grandmother chose to divide her assets equally between her five children.

Last week she received a letter asking for ID before any payment can be made and stating 'Estate accounts have been submitted to the Executors, and subject to their approval, the Estate can be distributed'. The two executors named are two of my Mum's sisters - my Mum is not. And those two sisters do not talk, so it is all a bit complicated.

My Mum heard today from another family member, *another sister* who isn't an executor, that my Mum's brother, does not want his inheritance for another two years. Because he is on benefits (I assume ESA and housing benefit etc), and if this is the case, the estate cannot be paid out to any of the other four children until the two years is over and he is ready. Is this likely to be correct or something he can do? Obviously he will get his pension at 65, that is his plan.

Surely delaying the taking up his share of approximately £21,000 in order to receive benefits is something that will not sit well with the DWP? I am aware of the deprivation of assets, but the issue is this money isn't technically his. He isn't rejecting the money - just saying he doesn't want it right now and wants to wait until he's 65.

I'm not entirely sure how the whole thing works and this is a very dysfunctional family where barely any of the siblings can stand talking to each other or do not talk lol. I'm not sure if what my Mum was told today is correct or not so I would like some advice. She's planning on calling the Solicitors on Monday, but is panicking a bit right now lol. Thanks.

Tom99

No it is not correct. There is no reason why the executors cannot pay the four and deal with the 5th beneficiary separately.
It is quite likely he should be declaring this sum now anyway even if it is not in his actual bank account.

TELLIT01

Your mum is doing the right thing by consulting a solicitor. I'm not even sure that part of the payment i.e. the part to the brother, can be delayed once the estate has been finalised.

huckster

The only way of delaying payment, is to not provide ID to Solicitors looking to make the payment. The Solicitors won't want to keep hold of the money, but would have no choice, if they were not satisfied of the address and person they were sending a cheque to.

Each beneficiary normally gets a letter through, saying we are looking to settle estate of x and we need to confirm your identity. You then have to provide photo ID ( passport or driving licence)' , before they make the payment.

DWP obviously would not be happy someone is delaying an inheritance deliberately, so they can claim benefit money, but administration delays can occur.

DigForVictory

Various thoughts include - the obvious path would be a deed of variation, but if the beneficiaries aren't talking to each other that ls unlikely to work, (I know nothing of Scottish Law), an executor could lave it all unfinished for years but if there are solicitors in play they may have professional bodies to explain themselves to, who'd carry the cost of 2 more years sitting pat - brother or estate, what happens if there's an emergency or god help us another death - the estate of the newly deceased would be a fiend to settle given that it should have had capital from inheritance but hadn't and how do you square that circle...

I think talking to a solicitor will be worth every ha'penny in clarity & identifying paths forward towards peace of mind.

calleyw

DigForVictory wrote: »

Various thoughts include - the obvious path would be a deed of variation, but if the beneficiaries aren't talking to each other that ls unlikely to work, (I know nothing of Scottish Law).

that wont work as its classed as deprivation of assets and the brother will be treated as having the money. and be worse off he wont have the money nor benefits.


also once under 16k should be able to start claiming benefits again and you are allowed £6k and can claim full benefits.



this might be better being posted on the deaths, funerals and probate board.


yours


calley x

tomtom256

huckster wrote: »

The only way of delaying payment, is to not provide ID to Solicitors looking to make the payment. The Solicitors won't want to keep hold of the money, but would have no choice, if they were not satisfied of the address and person they were sending a cheque to.

Each beneficiary normally gets a letter through, saying we are looking to settle estate of x and we need to confirm your identity. You then have to provide photo ID ( passport or driving licence)' , before they make the payment.

DWP obviously would not be happy someone is delaying an inheritance deliberately, so they can claim benefit money, but administration delays can occur.

If you do this and knowingly cause the "administration delay" as Huckster advocates, then you are committing benefit fraud, as there is no reason for the state to continue to pay you. but this will only impact on benefits if over £6k with benefit ceasing at £16k+.


It will still be classed as "capital available on request" by a DM and could still cause issues in a few years when benefits are no longer in payment owing to data matching exercises that are conducting by various government departments.

huckster

tomtom256 wrote: »

If you do this and knowingly cause the "administration delay" as Huckster advocates, then you are committing benefit fraud, as there is no reason for the state to continue to pay you. but this will only impact on benefits if over £6k with benefit ceasing at £16k+.

Just pointing out that Solicitors don't issue payment, until they are satisfied they are sending money to the correct beneficiary.

As far as I know, you only have to report inheritances when they are received and not at the point a claimant is made aware they are entitled to an inheritance.

Tom99

huckster wrote: »

As far as I know, you only have to report inheritances when they are received and not at the point a claimant is made aware they are entitled to an inheritance.

It would be interesting to tie that down if anyone knows for sure, as the subject comes up quite often.

pmlindyloo

Here you go:

From Decision Makers' Guide

Interest in the estate of a person who has died
52169 When people die the capital they have is called the estate.
52170 People have died
1. testate if they have left a will which says who gets the capital or
2. intestate if they have not left a will.
52171 An estate is administered or distributed by
1. executors if there is a will (in Scotland known as executors nominate) or
2. if there is not a will
2.1 in England or Wales administrators
2.2 in Scotland executors dative.
They hold the dead person's estate on trust and may also be beneficiaries of the estate.
52172 It may take a long time before the executors, administrators or executors dative can administer or distribute the estate. The administration or distribution is usually complete when
Vol 9 First Issue













1. all the dead person's
1.1 capital is accounted for and
1.2 debts are paid and
2. any dispute is settled.
52173 An executor, administrator or executor dative does not have to distribute an estate1 until
1. in England and Wales one year after the date of death or
2. in Scotland six months after the date of death or
3. a longer period if the estate is complex.
1 R(SB) 5/85(T)
52174 The people named in a will or the relatives of a person who has died intestate have no interest in specific property in the estate until the executors, administrators or executors dative
1. are in a position to distribute the estate or
2. would be in a position to complete the administration of the estate if they had acted properly.
Note: This does not apply to property specifically bequeathed in a will. Such property belongs to the person who inherits the property from the date of death of the person whose estate is being administered and is actual capital. This is subject only to the right of the executors or executors dative to resort to the asset if the remainder of the estate is insufficient to meet the outstanding debts of the deceased1.
1 R(IS) 1/01
52175 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 DMG 52036). In Scotland this is described as a vested right in the estate. This can be valued (DMG 52647). 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 DMG 52815 et seq.
52176 At the end of the period in DMG 52174 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 DMG 52035). A person's rights to capital are included when working out that person's capital.
52177 Separate guidance sets out cases where DMs may require expert valuation of rights to capital (see DMG 52642 et seq).
Vol 9 Amendment 17 October 2014












52178 People only have a beneficial interest in the capital assets of the estate when ownership of those assets has been transferred to them.


Sorry for the format!

TELLIT01

If the brother who doesn't want to inherit yet has provided proof of identity to the solicitor, and so have all other beneficiaries, I assume 52174 The people named in a will or the relatives of a person who has died intestate have no interest in specific property in the estate until the executors, administrators or executors dative
1. are in a position to distribute the estate


applies i.e. the brother is in a position to receive the distribution from the estate and would therefore be assumed to have the money even if they chose to delay receipt. The reason for delaying is specifically to enable the brother to continue receiving IR benefits so wouldn't that be a pretty clear cut case of 'deprivation of capital'?