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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think sister needs to declare inheritance

98 replies

CanIhavedessertfirst · 02/02/2018 20:29

Ok, this is a bit of a looooong story, so bare with me.

My sister lost her dad in November (we have different dads) and inherited £27,000. He had a council property and she has now acquired the tenancy and, as it was her father's home, she wants to say there for the foreseeable and I think it's most definitely the security she needs.

We have now lost our grandparents and are both set to inherit a sum of money each, adding to the capital she will have.

My sister receives esa and also housing and council tax benefits, she has always lived at home and never had such a large amount of money. She is by no means stupid, she is very careful with budgeting and saving, but I think she's being a tad naive in this situation.

I met with her today and she said her step mum (also received £27,000) has been spending her share so that she doesn't have to declare it to the dwp (am I wrong in thinking they will find out eventually?). My sister hasn't spent her share (she's a little more savvy) but hasn't told the dwp she has come into money. Today the tenancy was signed over to her and the housing association are aware her dad has passed away. She said she had to show bank statements, etc.

I worry she has done the wrong thing and she is going to end up in trouble. We have only just started speaking again, after almost a year (family stresses and shit) and neither of us speak to my mum, so basically I am the only family she has left. I don't know what to do, because I feel like I'm not in any position to tell her what to do (she's 26) but equally I know this probably counts as fraud. She says her dad and his solicitor were clever and that may be true, but she's my little sister and I worry.

Can anyone give me some advice? My husband thinks I should mind my own business and let her deal with any fall out, but I don't want to let her down by knowingly letting her get into shit.

OP posts:
Flockoftreegulls · 02/02/2018 21:44

*ESA

retirednow · 02/02/2018 21:46

Has she said she's not going to declare it. She has inherited 27k plus a sum from grandparents. Why does she want to be a benefit fraudster, they will find out and then what.

Allergictoironing · 02/02/2018 21:46

I inherited a fair bit a few years back when I was on JSA, and once I know it was possible to be over the £6k limit where the reduction of benefits kicks inI checked with the adviser at the job centre regarding what I could spend. He advised me that I could pay off debts, do any necessary house maintenance and take a moderate holiday before I was considered to be "deliberately depriving of capital". Luckily the debts and urgent maintenance (garage roof had actually collapsed Shock took me to just below the limit.

hadthesnip · 02/02/2018 21:47

@nofunkingworriesmate. I expect what your solicitor did was to pay HMRC any Inheritance tax that was due, This situation is completely different, The sister now has a lump sum of money that is sitting in her back account. As other people have pointed out, a lot of benefits are means tested & if you have more than £16k then some are reduced or stopped. Or do you think its fair that someone could receive as much as £200k and still claim benefits ?

Stickerrocks · 02/02/2018 21:48

Unfortunately the stepmum's attitude is exactly why benefits claimants get such a bad press. Everyone knows that the majority of claimants get the benefits they deserve, but she sounds as though she's delighted to be beating the system and getting one over on the rest of us who will continye tosubsidise her lifestyle.

lalalalyra · 02/02/2018 21:49

discuss that savings over £6000 will impact on her ESA

Only if she's on income based ESA.

HateIsNotGood · 02/02/2018 21:49

O apologies OP it's just you said in a previous post that you weren't too sure what executor and probate means. I think you have done your best already to point out to her about the benefit pitfalls. I'm more curious that she was allowed to retain the tenancy to be honest. Her stepmum's expenditure of her mother's inheritance is completely irrelevant to your sister.

£27k will affect her entitlement to HB/CTB and ESA with the savings thresholds for entitlement being different for HB?CTB and ESA. The Inheritance/savings do not affect any any DLA or PIP, nor any Tax Credits which themselves are Income-based.

Please do check at some point that she has declared her inheritance/savings to the relevant authorities but I wouldn't be overt in your concerns as you don't want to unbalance your tenuous relationship. But, as long as she declares within a reasonable time frame, like yourself and your over payment of Tax Credits, at worst she will have to repay the overpayment.

Original poster
CanIhavedessertfirst · 02/02/2018 21:50

I think reporting her wouldn't be something I could do to my sister! It's so much harder to look at it logically when you know what should be done, but equally understand why they aren't doing the "right" thing. More when it's family.

I'm glad I know a little more to be able to give her some facts, and I think after that I will let it be. I hope she does the right thing, but I also understand why many choose not to.

OP posts:
Springiscoming123 · 02/02/2018 21:50

basically if she is on means tested benefits (sounds like she is) she has to inform each benefit

this makes me cross that when people come into a large some of money they still expect to be able to keep all of their benefits,she will be able to still have a good back up once she meets that figure

MountainDweller · 02/02/2018 21:50

She does need to declare it. My Mum is in this position - currently gets pension credits but a small inheritance is taking her over the 16k savings limit. So she will basically have to live on her savings until she has below 16k again. Unfortunately spending it (in a more extravagant way than she usually lives, eg taking a world cruise when she normally holidays in the U.K.) counts as deliberate deprivation of income and if she was found to have done this the would be financial consequences.

butterfly56 · 02/02/2018 21:50

Agree with backaftera2year
The money needs to be declared now.

Canyouguess · 02/02/2018 21:52

I’d keep £5999 and put rest in pension.

Canyouguess · 02/02/2018 21:53

You are permitted to have savings under £6k with no impact on benefits at a

£6k - £16k - your benefits are decreased

£16k - no benefits

Original poster
CanIhavedessertfirst · 02/02/2018 21:54

@HateIsNotGood oh, sorry - I understand executor, but probate not so much, just that it is a legal part of the inheritence process.

Tbh I was suprised at the tenancy as her house is leased by a council housing association, who are known to not really give a damn (told me black mould wasn't harmful to ds2, when I found it on his moses basket). It's a year trial though, so she has to prove she can afford it... no irony intended

OP posts:
Canyouguess · 02/02/2018 21:54

Yes child tax credits more certainly ARE affected by savings

smurfy2015 · 02/02/2018 21:59

When i lodged a cheque from the proceeds of my parents house which was divided with my sibling in my bank i had to bring a letter from the solicitor to state where the proceeds of this lump sum had come from. That was on a Tuesday i lodged it. On Friday i posted letters off to housing and income support as i was on then to say my circumstances had changed.

I got a reply from them the following wednesday and £ had hit the bank on Tuesday and i had to pay back income support and housing benefit in relation to the date i told them that my circumstances changed which was the monday.

So i paid back for the 48/72 hours that the money was first sitting in my account. Totally right for me to do.

I understand where you are coming from op Flowers re the loss of your grandparents as well

Its not just money there are emotions too because in many cases we would rather have the person alive instead

ArielsDingleHopper · 02/02/2018 22:00

Firstly, I'm very sorry for you and your sisters losses. It's a difficult situation to be in, to be out of touch for so long and then be thrust together under difficult and sad circumstances. You seem to be taking a typically big sister approach, and trust me, us little sisters don't always want to listen. It'll cause trouble if she doesn't declare it, sooner or later. She'd be better off speaking to someone with official knowledge - dwp or a financial advisor. Keep in touch though, so she knows you are on her side, not trying to get her in trouble, like some silly people have suggested!

Original poster
CanIhavedessertfirst · 02/02/2018 22:01

@MountainDweller that is when I don't agree with the system. I think it's the right thing to declare it, but one extravagance should be allowed

OP posts:
missymayhemsmum · 02/02/2018 22:02

Having the money shouldnt affect her tenancy, presumably its been signed over to her as shewas already living there so had a right to succeed, but will affect her benefits as she'll be expected to live on the inheritance and pay full rent. Why not suggest she goes to CAB for proper advice about her options? This inheritance is her opportunity to maybe start a business, work part time if she's able, study or whatever instead of living on benefits for the forseeable, or else she'll just live on the money until its gone and hen be back to esa.

Livelounge · 02/02/2018 22:06

Gives me the fucking rage when people do this! All the "mind your own business" posts -ffs!

Springiscoming123 · 02/02/2018 22:06

really,why should somebody have one extravagance,she will be able to bring the sum down by paying debts etc(maybe spend some on her new place),it 's greed to not declare and more common than people think

i say this as somebody on benefits myself

Original poster
CanIhavedessertfirst · 02/02/2018 22:08

@smurfy2015 most definitely! I feel emotional anyway, and I don't want her to have another thing to deal with, as she jas lost 3 people in less than a year, but equally I don't want to lecture her and make her feel like she has nobody! I'm lucky to have a husband and 2 children to take my mind off things to a certain degree, but today she said she hadn't spoken to anyone since her dad's funeral in December, so I don't want to become the enemy by trying to make her do the right thing.

@ArielsDingleHopper haha, she's pretty much never listened to advice (or instructions) but I hope that, given how serious this could get, I hope she has gone home and did a little bit of research today.

OP posts:
Wauden · 02/02/2018 22:09

She says the solicitor was savvy... even solicitors have to be within the law...

Original poster
CanIhavedessertfirst · 02/02/2018 22:10

@missymayhemsmum she was down as living with him, and they've signed it over as a temporary thing, so she said today. I never thought about CAB, but that will likely be the neutral ground she could do with.

OP posts:
saladdays66 · 02/02/2018 22:19

Probate automatically inform DWP and council etc.

I don't think this is accurate, babyspider - probate is just proving the will. They may inform DWP etc about the dead person having died - but they certainly won't inform DWP about money going to beneficiaries.

OP, you have had good advice here. I'd strongly advise your sister to declare the money. It's fraud if she doesn't - and everyone in the UK has to pay more tax to fund more benefits whenever someone does that.