Sudden Riches

dag_2

I don't think it's helpful to throw in a comment like "pay off the mortgage anyway" without going into the details of the implications of this action, which is what Ted has done in his posts.

Take your point - it's just that I've yet to see anything about "intentional deprivation of capital" from an official source. So I'm taking the idea with a pinch of salt until I do.

Assuming that "intentional deprivation of capital" isn't a problem and you inherited your cash, you'll clearly lose out if you're holding cash that could be used to redeem a mortgage - after all, I doubt you'll find a savings account with a higher interest rate than the mortgage. Maybe there are rules about intentional deprivation - but I'd guess they're more about getting other family members to hold wealth for you, rather than consolidating your own borrowing. So, on the balance of it, I think you're more likely to lose out if you don't redeem the mortgage than if you do.

But I don't deny, that's just a guess.

The supporting link that Ted has given leads to a lot of unqualified waffle about hypothetical situations, but no actual legislation. True, that's more than I've been able to muster in support of my own point - but I still don't think it's enough to satisfy me, that there's a better alternative to the obvious.

This is all assuming that babyling actually gets the £75 grand or whatever. If he doesn't, then he's no worse off than he is now.

What's wrong with just taking the money anyway? If it doesn't disqualify him from means-tested benefits - great. If it does disqualify, not to worry, he can live off the money until it runs out, and then get means-tested benefit. Assuming the government hasn't scrapped the benefit or changed the rules by then - £75,000 is a lot of money to forego on the offchance that the rules will stay as they are now, especially when you're not sure how those rules get implemented.

babyling is at danger of inadvertently talking his parents into cutting him out of their will. To my way of thinking, having the money go to a third party executor is like being cut out of the will - most of us would rather have the cash any day.

Have I explained that properly? Sometimes I can be a bit wordy, especially when I get a bee in my bonnet about something. Please ask if there's anything you don't understand.

Tinkerbel_2

Not quite sure if any of this is relavent but....

I paid £35000 in cash to my Ex as part of a divorce settlement... he disposed of this on designer clothes and a sports car. Gave up work(sacked for gross misconduct), claimed jsa,started paying £5 pw child maintainace for his 2 kids, claimed housing benefit for 2 bed flat(paid in full) and went to Maldives for 3 wks. No one told him he should have used this money for supporting himself. I having made sure all were aware of it.

So hey spend the money. Enjoy life.

I in the meantime having taken out every loan possible to pay him off. I am being penalised for having an offset mortgage. My income support, Child tax credit and Child Benefit get paid into my current account and sits there until DDs come out . So reducing the £150 difference between what my mortgage lender charges and what the benefit pays and Hey Now my benefit gets reduced because they say my debt has decreased.

It doesnt pay to be honest! Or to try to be clever!

Fran

Tinkerbel,

I see your point, but it's all very well if you're not caught spending the money and they have tightened up on fraud over the past couple of years (ignorance is no excuse unfortunately). I wouldn't recommend spending the money unless the situation has been looked at carefully.

Ted_Hutchinson

I would imagine that the claimant is currently getting her mortgage interest paid by the state anyway (or that part covered by the DWP standard interest rate). Enabling her to pay off the mortgage will in fact save the state money in the long run. Whereas, her coming off benefit and, using the capital to pay her outgoings at the current rate without paying off the mortgage prematurely will eventually leave her in the same position as currently but without the security of being able to pay off the mortgage.

deemy2004

Out goings at the current rate, add on interest and were talking at least 10 years.

babyling

Hello again.
Firstly, my apologies for not getting back to this earlier - I have been rather preoccupied with some rather serious hospital treatment and only now feel like getting back to the real world.

Okay, after taking proper legal advice I can tell you that, as usual, Ted has got it spot on. Basically, if you have a whole load of money then you will lose means-tested benefits if you spend it.

The only thing I can add in my own case is that if I am an executor then I must do what the will tells me to do. Therefore the money would never be my money if I have been told, as executor, to pay off my mortgage. Makes sense, I suppose.

Thanks again, Ted, for your help. Fran too.

***Edit by MSE Controller ***

Babyling

Former_MSE_Controller2

Hi there,

Subjects like this often provoke emotive responses, but please remember "Be nice to other MoneySavers" even if you disagree!

Thanks

babyling

Okay MSE Controller2, if you think Deemy`s comment:

"Your getting £75k cash, and your still wondering how to scrounge off the state ?
The benefits are meant for people who actually NEED the money"

is being "nice" to other moneysavers, then your standards differ from mine.


Babyling

Former_MSE_Controller2

If you are caused offense by a comment on a thread, please report to [Removed by Forum Team]- I have
removed that one for you though.

babyling

MSE Controller2 - I do not feel at all offended by small-minded, bigoted comments; that`s more his problem than mine.

In any case, there was no point in removing Deemy`s puerile comments after 900 viewings of the thread, and removing my response to those comments after only one or two viewings. I don`t mind what he says - as long as I have the right of reply. You took that right away.