Inheritance advice (complicated!)

EllieRedHead

Hi,

We've just found out that we'll soon be inheriting £70k from my late father in law, substantially more than we previously anticipated. Our 3 kids will also inherit around £4k each. I've never had money in my life, so I've never been financially savvy unfortunately total money dummy! 

2 of our kids have special needs and we receive DLA and carers allowance. We're also in receipt of housing benefit, tax credits, etc. We opened a business pre covid with the hope of getting off of benefits, but the pandemic killed that dream pretty fast! It will be some time before we can achieve that, but it is the end goal. We live in West Sussex in a housing association 3 bed terraced house, and while we're happy here we would ultimately like to have something more stable. We've just found out my dad is unwell (almost certainly terminal) and our kids are finally settled in specialist schools after a 5 year battle with the local authority, so moving away from West Sussex is not possible. I'm 32 and can only work part time hours for our company due to the kids needs, and my husband is 62 with a terrible credit score and debts from a previous divorce and company failure. 

When we inherit the money a lot of our benefits will stop, and as previously mentioned we're not in a position to support ourselves yet. We could live off the £70k for a while, but ultimately we want to use it to get out of the hole we're in. Whether that's buying a house for stability, or whatever. We're open minded and have no clue! For reference, iur life goal is to have a couple of acres for a smallholding, and to build our own house on it. We know we haven't got enough for that, but thought I'd put it here in case it changes any of the advice.

Can anyone offer any advice for what we should do with the money? And also what's the best thing to do with the kids money? We want to keep it for when they turn 18 and plan to add to it here and there if and when we can afford it. 

Thank you so much in advance for any help ❤️

DancingBadger

What you need is financial advice.  The posters on some of these boards might be able to help:-

https://forums.moneysavingexpert.com/categories/work-benefits-business

Drawingaline

It will definitely affect some of your benefits. It won't affect the kids DLA or the child tax credits, just the working tax credits (only interest over a certain amount affect child tax credits). 

Definitely ask on the benefits board, I believe buying a property to live in may be ok, but their are much more knowledgeable people on there answer that. But don't feel you need to rush into anything. Maybe make a wish list of items you want. Broken down into a 'want' and a 'make life easier' sections. 

Also with disabled children you may wish to be able to pop some aside for them for future needs. But again this may affect your benefits now, so benefits board question there. 

Drawingaline

Actually change my 'wont affect DLA and CTC' to shouldn't! Don't want you to take it as concrete, my dealings with them was a few years ago. On the benefit boards there are people who work for tax credits and universal credits and have more u to date info. 

EllieRedHead

Thank you both. From what I've read on the gov website you're correct Drawingaline. I'll repost on the benefits board  

TBagpuss

It will affect any means tested benefits - looking at www.entitledto.co.uk might be useful as you can input the details and see what would be different.

It would be possible to buy a house in your sole name if your husband can't get  mortgage due to his credit history and age, but I suspect that even  if you have £70K as a deposit you may find that your mortgage capacity is pretty low if it's jut your part time earnings.  It may be worth talking to an independent mortgage broken to check out the options, looking both at your capacity in your sole name, and jointly with your husband.

If you use some of the money to clear his debts then presumably that will free up some of your income.

You might be able to look at whether there are any shared ownership schemes locally which might have suitable properties, although a Housing Association tenancy is pretty secure (Assuming you are out of the initial probation period) so buying a property, particularly if you would be stretched to meet the mortgage repayments, might not be the best option for you. It may be worth looking at putting some money into pensions , and also to think about what you need that isn't your landlord's responsibility - eg. replacing vehicles with something more reliable / cheaper to run, etc.

fr the children's money, it will depend a bit how old they are - if any of them are close to 18 simply looking for a the beast cash savings account might be appropriate, if they are younger then look at investments - maybe unit trusts or a child stocks and shares ISA, where you are spreading the investment across a variety of investments so you don't have all the eggs in one basket - but fo get some proper advice.