claiming benefits with a discretionary trust fund

c0nfused78

Hi, there's something I need to find out about as I do not want be committing benefit fraud.

I am in receipt of ESA, PIP and HB. A short while ago I was made aware that I am the beneficiary of a "discretionary trust fund", where the trustees are my parents. I understand the money in this fund is well above the £6000 savings limit for claiming means tested benefits.

Given I have received nothing from this fund, and do not expect to until my parents both pass away, I am wondering it is legally OK to continue claiming benefits.

Suppose I should really ask a solicitor, but ironically in my situation they are expensive! The manager of the fund assures me everything is above board, but it seems wise to seek second opinions.

sammyjammy

It depends on the terms of the trust and whether you have access to it.  How old are you?  Assume from your username you're over the age of 18 so its not clear why you weren't aware of it.  

calcotti

sammyjammy said: Assume from your username you're over the age of 18 so its not clear why you weren't aware of it.  

Not sure what you can infer from the username - they clearly aren't 78!

[Deleted User]

calcotti said:

sammyjammy said: Assume from your username you're over the age of 18 so its not clear why you weren't aware of it.  

Not sure what you can infer from the username - they clearly aren't 78!

 Born in 78? So in their 40s? 

c0nfused78

would rather not reveal my age, and it's not relevant anyway, except to say that I am over 18. I have been aware of the trust - it was set up recently - but have chosen to to ignore the legal/financial details up until now, they are a bit beyond me. I'm informed it is a standard discretionary trust. I do not have access to any funds unless on the trustees' (parents) say so.

[Deleted User]

https://www.renaissancelegal.co.uk/blog/back-basicstrusts-disabled-vulnerable-people/

"Assets held in a discretionary trust are disregarded when it comes to claiming means-tested benefits and local authority means-tested support."

needs looking in to further in case the law has changed since this was written 

calcotti

For benefits purposes what matters is who is the beneficial owner of the capital. The beneficial owner may be different to the legal owner.
DMG Chapter 52: Capital (publishing.service.gov.uk)

52070 Only the capital where people are the beneficial owners is included when working out what capital they have.

When there is a trust
52180 There is a trust when a person
1. gives capital to another person to hold and
 2. says for whom that capital has to be used.

52181 The person
1. giving the capital in England and Wales is the donor or in Scotland the truster
2. holding the capital is the trustee and is the legal owner of the capital
3. who the capital has to be used for is the donee and is the beneficial owner.

52081 People can get a beneficial interest in capital by
..5. having a beneficial interest in a trust. 

Discretionary trusts
 52236 A discretionary trust is one where the trustees have the discretion to make payments to certain people. Such people have an interest and in England and Wales are called discretionary objects. In Scotland such persons are simply called beneficiaries or more fully discretionary beneficiaries.

52237 Many trusts let the trustees invest the capital of a trust at their absolute discretion. This means the trustees have a choice in how the capital is invested. This does not mean the trust is a discretionary trust. There has to be something else in the terms of the trust to show it is a discretionary trust.

52238 The trustees of a discretionary trust may or may not make payments to the people with an interest. The trustees cannot be made to make payments to those people.

52239 If the trustees make a payment it is a voluntary payment. If the payment is
1. made regularly, it is taken into account as income other than earnings or
 2. not made regularly, it is capital.

I think the logic of this last bit is that the money in the discretionary trust is disregarded.

It will come down to the terms of the trust.

c0nfused78

sorry just remembered about this. Thanks for the info both. I'm going to have to read the above post several times and dig out the documentation for the trust. Seems like the situation probably is that if I receive no payments from the trust, then everything is above aboard. Probably.