We're all full of sympathy on this thread I see this morning
If my son had been killed in action, I'd also have wanted that money to go towards something concrete, not be slowly frittered away on day-to-day living expenses that would have been covered by the state if my son had not died serving his country. It's a shame these payments are not exempt, as other payments can be. It's also of course a shame her son didn't make a proper will. Isn't it possible to vary a will after death if you, the person inheriting, agree to it? Did he not make a will at all and it just went to the next of kin?
I'd have thought with a good lawyer there was a pretty easy way round this eg buying a house as suggested, setting up trust funds. But she sounds like this has all got on top of her and it is irrational grief talking
I don't see why we can't make death-in-service payments for members of the forces who die in our name, exempt as sources of income for benefits purposes. I see money wasted in worse ways by our government, like sending young people off to die on wars fought on dubious legal grounds, for instance