Benefits and inheritance left to my children

lumpaywk

Hello and thank y ou in advance for any help.

Background:
It turns out we had been getting overpaid for HB and so I have been looking into our benefits and it seems that if I move to UC I would end up better off per week.

While looking into this it came to my attention (I have never had money so never thought about it before) that if you have large capital you could lose some and maybe all your benefits.

Issue:
I am currently on HB and child tax credits with 4 children and a single household income of 28k. Last year we lost our nan and she left her estate split equally 16 ways between her children and grandchildren. This equates to about 3-5k each. As the parent to 4 children under aged 8-12 this means the money would be paid to me even though it is not actually mine (15-25k).

As this was left to the children and I am only in charge of their estate does it count as capital in the claim? If so is it the same rules for HB and TC as it is for UC?

I hope this makes sense and agin thank you for any help.

Alice_Holt

Tax Credits does not have a savings / capital limit. Instead income on savings (above £300) are included in the calculation.
https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/what-is-income/investment-income/

UC has a £16k savings limit (with reductions between £6k and £16k).
https://www.entitledto.co.uk/help/Savings-and-other-capital-overview-Universal-Credit
If you claimed UC your TC's would end.

HB has the same capital limits as UC.

Whether the money left to your children are included in your savings/ capital is likely to depend on whether you have access to it. You may wish to look at a deed of variation to see if the money can be left directly to the children via a JISA.
From your post it seems likely it may be included in your capital. Get advice from your local advice agency. You will need to notify your local council (HB and CTr) of these changes, you could ask them for guidance, and check that with the advice from your local advice agency.

Get advice before claiming UC, as you may well be worse off than currently.
https://www.citizensadvice.org.uk/about-us/contact-us/contact-us/contact-us/

pmlindyloo

lumpaywk wrote: »

Hello and thank y ou in advance for any help.

Background:
It turns out we had been getting overpaid for HB and so I have been looking into our benefits and it seems that if I move to UC I would end up better off per week.

While looking into this it came to my attention (I have never had money so never thought about it before) that if you have large capital you could lose some and maybe all your benefits.

Issue:
I am currently on HB and child tax credits with 4 children and a single household income of 28k. Last year we lost our nan and she left her estate split equally 16 ways between her children and grandchildren. This equates to about 3-5k each. As the parent to 4 children under aged 8-12 this means the money would be paid to me even though it is not actually mine (15-25k).

As this was left to the children and I am only in charge of their estate does it count as capital in the claim? If so is it the same rules for HB and TC as it is for UC?

I hope this makes sense and agin thank you for any help.

You need to check what the will says.

You say the money is left to you but is not actually yours. What does this mean?

Has the money been put into a trust of which you are a trustee?

You will need to know the exact wording of the will before anyone can tell you whether this money will be treated as your capital (which will affect HB/UC and tax credits as Alice has stated) or your children's capital (which may not be treated as regards means tested benefits.)

lumpaywk

Hello and thank you again.

The money is left to them by name in the will, however, it does not stipulate that it is to be left in trust or until they are of age. This means that as their l;egal guardians the money would come to me physically (well digitally on a computer but its the best way i can think to put it).

TELLIT01

If you don't already have the money, you need to speak to the executors and get the children's money put directly into trusts for them. It being in your bank account will probably cause UC to assume the money is your to do with as you wish.


If the money is already in your account, you need to get some form of trust set up for each child to safeguard the money.

xylophone

The money is left to them by name in the will, however, it does not stipulate that it is to be left in trust or until they are of age.

Then the money belongs beneficially to each child.

Under normal circumstances, because a minor can't give good receipt for the bequests, his parent would hold the money for him in an account in bare trust until he reached 18.

Example https://www.harpendenbs.co.uk/savings/personal-savings-accounts/18-club/

This is a fixed term account and withdrawals or transfers are not permitted until the account holder is 18 years of age.

Funds released at 18 will only be payable in the name of the child.




Otherwise, what is your children's current position regarding CTF/JISA?

lumpaywk

xylophone wrote: »

Then the money belongs beneficially to each child.

Under normal circumstances, because a minor can't give good receipt for the bequests, his parent would hold the money for him in an account in bare trust until he reached 18.

Example https://www.harpendenbs.co.uk/savings/personal-savings-accounts/18-club/

This is a fixed term account and withdrawals or transfers are not permitted until the account holder is 18 years of age.

Funds released at 18 will only be payable in the name of the child.




Otherwise, what is your children's current position regarding CTF/JISA?

Currently we have no plans or accounts. The flat is going up for sale this week. The will has no stipulations and so the lawyer said that as I am the legal guardian that the money is just paid to me to manage as I will.
I have today been reading up on JISA thanks to advise on here and think this may be the way we go. I never want to cheat the system but the money is for them not me. I guess a good ISA would give them a nice egg for uni or a cheap car to start work.

tazwhoever

lumpaywk - JISA have limits per year. If you exceed the limit, where are you going to put that?

xylophone - is right about bare trust accounts. As children can't open their own accounts, parents are the trustees. I don't believe it should be fixed term and not withdrawing but the parents should not be withdrawing from the accounts.

xylophone

I have today been reading up on JISA thanks to advise on here and think this may be the way we go.

Do any of the children have a CTF already?

xylophone

JISA have limits per year. If you exceed the limit, where are you going to put that?

https://www.gov.uk/junior-individual-savings-accounts

The OP mentions between £3000 and £5000 per child so may well be okay.

Otherwise, if there are existing CTFs, there is a workaround.