Inheritance And My Benefits

[liz69]

hi, im due to receive inheritance of 20k im all benefits including dla , im so worried im going to lose all my benefits so therefor i dont wont the money , does anyone know if i can give it all to my daughter who is just starting out in life , please help im so worried ...

[Barmaid]

You will only lose the means tested benefits.

Did the deceased die less than 2 years ago?

[sara3]

passing on an inheritance to remain on benefits is considered deprivation of resources, but as Barmaid says.. you can still get DLA as it's not means tested.

[Sharingan]

Is that still the case if you for example pay of debts with it and then take yourself under the threshold for savings?

[Barmaid]

Sara - how do the benefits people view a Deed of Variation under s142 Inheritance Tax Act 1984? That bit of legislation states that if a DoV is done within 2 years of death it is "written back" into the Will so that it is assumed to have been a disposition by the deceased rather than the beneficiary.

I accept if the OP received the money and passed it on it would be deprivation, but s142 puts a different legal spin on it because it is as if the bequest never existed in the first place.

[sara3]

I believe so Sharingan, but evidence would have to be produced.

[sara3]

Barmaid, that went right over my fluffy head!

all I know is, it should be declared and a Decision Maker can consider s142, or any other appropriate acts ;o)

[Barmaid]

Think you could be right on that Sara3. I think s142 will only apply for the purposes of the IHTA 1984 so I think it could be considered deprivation. Interesting point though.

[sara3]

obviously I've considered it on a very basic level.. money appears in an account and the DWP gets flagged, if means tested benefits are being paid.

I wish I could comment further, but I know my limits!

[sunny-dave]

I hope I don't get shot for saying this (and I do really understand just how worrying it must be to lose the benefits - especially when I know how hard it is to get them restored at a later date) ... but ...

... surely the point of means-tested benefits is to be a safety-net from 'society', for people who have no other means of support.

If you become able, whether through an inheritance, lottery win or any other windfall, to support yourself for a period of time then surely it is actually wrong to expect to be able to continue to receive the means-tested element of an benefit income?

[Sharingan]

I'm wondering what the timescale would be for the money to disappear and being able to reclaim any benefits. I mean it would be very easy to fritter the money away and then not have any left quite quickly. How do the DWP work out what is a fair amount to spend?

[bednobs]

well i have to agree sunny d - i find it rather odd that someone would turn down 20K from a relative/friend because they'd rather receive 20k from the govt/taxpayers. Anyway, as has been said before, what benefits are you actually on because DLA isn't means tested anyway

[sunny-dave]

... sorry - I've noticed we are in 'Law' - I hope that my reply doesn't derail this thread into opinions rather than factual answers.

< although I think Sharingan's question is quite appropriate >

dave

[sunny-dave]

as is Bednobs'

[liz69]

Thank you for all your comments , i totally understand what your saying sunny- dave the reason i dont wont the money is im under the mental health team and the stress of reclaiming my benefits is to much for me to cope wiith, im housebound most of the time unless i can get family to take me anywhere and my daughter has been there threw it all so it would be a nice gift for the start of her life in the big world if you see what i mean , if i couldnt give it to her then surly i dont have to accept it ...

[liz69]

he died in march this year barmaid

[bednobs]

no, if you can;'t give it to her you don't have to legally accept it. I'm not sure how the benefits agency will see this though as you are deliberately depriving yourself of assets. An answer to shar's question would i think be quite interesting

[EDDIE51]

It may be possible to put the cash into a trust fund from which you draw cash for things you need but as it is not 'yours' directly you can still keep the benefits. I have heard of lottery wins etc being paid this way so the recipients can keep benefits. Morally wrong but I don't think it is illegal .
Then again as said you will not lose the DLA as that is not means tested. So possibly you can just keep the cash and be free of benefits for a while?

[sara3]

Eddie, that would be illegal.

[themas]

Barmaid - I think I'm right in saying the Deed of Variation has to be signed by the original beneficiary, in which case liz69 would be signing away the inheritance & I'm confident that would be seen as deprivation.

Sharingan - the rules are various & can be quite complex. It's just not possible to set out anything definite because they can depend to a considerable extent on the circumstances of the claimant. For example, if liz69 is over pension credit age (at present somewhere between 60 & 65) and she uses the money to pay off her debts that would be OK. But if she is under that age & uses it in the same way it is not OK, unless the debt she pays is one which she is under a legal liability to pay immediately. Or it may be she has a very old clapped out car & has an essential need to have a reliable car, in which case she might be able to justify expenditure on a replacement. And there are lots of other circumstances that can affect what is accepted.

[themas]

Sorry - I got interrupted. If there are no "one off" type expenditure items DWP deem the savings to be used up gradually over a period on ordinary living costs, but again the amount they deem acceptable will depend on circumstances - eg much more for a family than for a single person.

liz69 - I sympathise because it can be difficult to get some means tested benefits back but you mustn't do anything which leads DWP (or your Council if you get HB/CTB) to believe you are trying to bend the system. If you do you could be in much more trouble than just having to claim benefits back. My view is that you have to accept the inheritance (even disclaiming it will be treated as deprivation), let the authorities know, keep records of what it is spent on (being careful not to splash out on gifts etc.) & then re-claim when the savings drop down to £16000. If your daughter has acted as an unpaid carer to you for some time it may be worth discussing with DWP whether they would accept that passing some of the money to her as recompense would be considered reasonable.