Benefits and Inheritance Quandary

markchadwick

Hi there,

My granddad passed away recently and has left all of his money (around £55k) to his four children: one being my dad. I have been told that after probate each of his children will inherit around £12k each; which leads me on to my problem.

My dad is currently on benefits (I think he gets DLA as he's disabled) and has told me that if he receives any money above a certain amount, he has to declare it to the social. Also, if it is above £6k (I think), some of his benefits will be stopped until the remainder has been used up and then his benefits return. This basically means that half of the money my granddad intended for my dad will be taken away and used by the Government. My dad has told me that he doesn't want the money anyway as his intentions would have been to give it directly to his own children or leave it in trust for them.

So my question is this: is there any way my dad can avoid the money he has inherited from my granddad affecting his benefits and simply pass the sum onto his children or will the Government take half of what he's due to get?

dmg24

It really depends on what benefits he is receiving. If it is just DLA, this is not means tested, so it would not be affected.

3plus1

If your dad's siblings agree, I think they could apply for what is known as a "deed of variation", ie. they could have the will changed so that his share goes to someone else and he wouldn't receive the money himself. If he intends to pass the money on to his children rather than spend it himself, this could be a useful option.

Hope that's a useful starting point for you and your dad.

markchadwick

The Deed of Variation looks to be exactly what we're looking for.

Thanks a lot!

dmg24

You should be aware that this could be seen as Intentional Deprivation of Capital, if he is on means tested benefits.

glossgal

markchadwick wrote: »

This basically means that half of the money my granddad intended for my dad will be taken away and used by the Government.

No, what they will be doing is 'taking back' half of their money because your dad will have this from somewhere else (in their eyes). Can see how this is frustrating but unfortunately thats how it works. If I asked you to lend me a tenner when I'm stood waving a £20 note around what would you think?! (flippant example granted but YKWIM)

Actually, if dad is on pension credit ie over 60 then even a £6 k inheritance wouldnt necesarily stop him getting the benefit.

healy

Dave30 wrote: »

False. The will clearly states your grandads siblings i.e 4 children. It needs no agreement between your dads children! It is the beneficiarys (your grandads children) that ALL have to agree to ANY variation of the will. A solicitor will be needed. However, on means tested benefits, this will be seen as diverting money to avoid benefit reduction. CAB is the best to approach on this as they deal with benefits before you decide to do anything legal that diverts the money.

A sibling is a brother or sister NOT a child.

[Deleted User]

healy wrote: »

A sibling is a brother or sister NOT a child.

This is correct, sorry Dave but your "False" is actually True.

Oldernotwiser

As your father's disabled, could he not use half of this money on things to make his life easier? I'm thinking of stair lifts/mobility scooters/bathroom adaptations. I don't think that if he spent it in this way that his benefits would be affected and he would still have his £6,000 savings left as well.

(Someone please correct me if I'm wrong on this.)

bigbill

£12,000 will reduce his Income Support by £24 weekly, if over 60 and on Pension Credit it will reduce by £12 weekly.

Is it really worth the hassle to try and deliberatly deprive himself of money in order to keep a few pounds weekly in IS or PC?

lightrider

I hope I'm right in continuing this thread rather than starting another but my question does seem to be directly relevant.

I'm in a similar situation and wonder if it would be classed as Intentional Deprivation of Capital if the will was changed to favour siblings before the person dies. I am disabled and on long-term benefits and simply wish to plan ahead as wisely as I can. At present my mother's will is split equally among her (grown-up) children but as a family we could redistribute.

I don't wish to scam the government so please don't attack me. Rather than using any inheritance as a direct substitute for my benefits in the short-term, I would prefer to have the potential to get off benefits in the long-term.

Thanks for any advice you may offer.