Inheritance being received by someone with undiagnosed learning needs on benefits

MrsAlford

I have recently helped my Father In Law with the probate of his late brother. He was executor of the will. Probate has been granted and his brother's house will shortly be put up for sale.

His brother had 2 sons who will inherit the estate, one of which is in receipt of a council house and benefits. He works 3 hours a day in a cleaning job. He has undiagnosed needs and is in his 50s. His understanding is limited and he has poor short term memory.

He is set to inherit a sum of money which will be larger than £16k, meaning that he will lose his benefits. Will he also lose his council flat? We live in London where the house prices are much higher than the amount he will inherit and if he has a mortgage he will no longer be able to receive benefits. He would not be able to live on his income.

Is there any way to safeguard someone in this situation with undiagnosed needs? Although he lives alone, he does not have to deal with money as his bills and rent are paid for by the council and this change will be very difficult for him to understand.
Can the money be put in trust for him if he lacks capacity to some degree? It was not written in the will of his father as he did not have the foresight or knowledge to do this. My FIL also does not have the knowledge or understanding of this and I am trying to ascertain what can be done.

Thanks in advance.

Spoonie_Turtle

The first facts to ascertain are which benefits exactly does he claim? 

Only means-tested ones would be affected (e.g. Housing Benefit, Universal Credit, Council Tax Support) whereas something like PIP would not be.  Living in a council flat should not be affected either. 

If he claims ESA then it will be necessary to ascertain what type; if it's all income-based that would be affected but if any of it is contributions-based then that part would not be affected.

To my knowledge the main way to make sure someone's means-tested benefits are not affected by receiving a large inheritance is for it to be willed into a trust, but I don't think it's disregarded if put into a trust that's not specified by a will.  

However even if his benefits are affected and he has to live off his inheritance, then once it drops below £16,000 he'd be able to claim means-tested benefits again anyway.

Aside from benefits there will hopefully be able to advise further about what kind of arrangements there can be to help if he lacks capacity to deal with finances himself.

HillStreetBlues

MrsAlford said:

Can the money be put in trust for him if he lacks capacity to some degree? It was not written in the will of his father as he did not have the foresight or knowledge to do this. My FIL also does not have the knowledge or understanding of this and I am trying to ascertain what can be done.

With any means tested benefit to protect that benefit the deceased must have stated in should go into a Trust or the IRB should be protected  . It could be via a will or other provable method.
As clearly his father expressed no such intention then putting the money into a Trust won't stop the loss of income related benefit until under the £16k upper limit.

itsthelittlethings

He shouldn’t lose his flat but would have to pay his rent if this is paid by UC or HB.

MrsAlford

Thanks all.

This is what I suspected would be the case. I will have to dig a bit deeper into the benefits he receives and go from there. If he can keep the flat, this will at least make things a little easier!