AIBU to worry I will never be able to use inheritance money?

[WanderingStar26]

An inheritance one, kind of.

I am a single parent, I have a disability which limits how much I can work, I live in a HA house, my youngest child is 16 and going to college in September.

I’ve been aware of the fact that I have had the buffer of UC for years, as well as working PT, but that will be coming to an end (or at least massively reducing) when my youngest finishes education. I have been really trying to up my earnings (I’m self employed), and I’m doing better than I was but it’s difficult health-wise, and I’m definitely not going to be able to get a mortgage anytime soon.

Today my DF announced that he was selling one of his properties and splitting the money between his 4 DC. My three siblings all own their own properties, so that’s really handy for them as they can pay off a chunk of their mortgages. The stipulation to this money is that it can ONLY be used for property, so if I can’t buy then I won’t get it, basically.

It’s very generous of him but realistically I’m not sure how I will ever be able to make use of the money? I repeat, he will not let me have it unless it’s going towards a property purchase. Which is fair enough I guess as he doesn’t want to see it wasted. But I don’t see a realistic chance of me buying a property, ever, sadly, much as I’d love to.

He said he will put my share in an account and when I need it I can have it. But I’m mid forties now, my health seems to be going downhill and despite me really doing my best, my income isn’t ever going to be at a point where I can get a mortgage.

I’m not sure what to suggest? Maybe ask him to put it in a trust so it might benefit my DCs in future? I’m just worried that if it sits in a random account then eventually I might have problems retrieving it from the wicked stepmother (a whole other thread), and best case scenario will end up losing a chunk of it to inheritance tax. My DF is 73.

It sounds like you really need to have (another?) conversation with him. Is that feasible?

I haven’t been in this situation but I’ve been in a situation where generous presents are offered that come with costs attached and I can’t afford to take them, and it is difficult. Somehow you end up framed as the one in the wrong, and it’s quite frustrating.

What would you do with the money if there were no strings attached?

I like the trust idea.

But I guess if you recieved the momey you wouldn’t be entitled to benefits?

You and/or your father need competent legal advice.

Post in Legal Matters here as a first step.

NB: What kind of sum are we talking about?

That’s a good question. I suppose my instinctive response would be to invest it so that I have a bit more security when I’m older. Though I’m aware it’s not really a life changing amount or something I can retire on. But failing that, having it there for the DC to be able to use for a deposit seems like a good idea, although I doubt my eldest will ever be buying a house.

I wouldn’t, which is absolutely fair enough but it would get eaten up pretty quickly with just living. And it’s not an option as he will not let me just have it.

Sorry, that’s a key bit of info! It will be somewhere between £60-70k.

Have you explained this to him?

Yes, I’ve said I won’t be able to get a mortgage. He just said he would put it in an account ‘for now’, until I needed it. But I can’t see my situation changing, unless some kind of miracle happens.

Is there any properties reasonably local that are around the price of the money you will have but they will need refurbing. Could you buy it and refurb it over time bit by bit?
Will you be getting any other inheritance at any point or is this it?

Sounds a bit shit of him.

maybe come up with a written down plan and sit down with him explaining the numbers and why it won’t work for you. But show a plan of investment so he can feel secure you won’t lose your support and he won’t feel like his money is “wasted”

xxx in an ISA
xxx in shares
xxx in kids names ?

Will one/more of your siblings not get a mortgage with you and then hold the property as tenants in common and you hold 90% and they hold 10% (for example). Then you draft wills to say that on their death that their portion goes to you?

What if your Dad bought a relatively cheap property with you? You’d own part of it and he’d own the rest. Maybe you could gradually buy the rest from him?

I like Estoy’s idea too.

It is possible to buy a house outright for this price in the uk, though perhaps not in a place you want to live. Could that be an option? Or if you’re not going to be getting UC in the future, could you buy somewhere and rent it out to pay the mortgage? Much harder than it used to be but still possible?

Property around here isn’t cheap, so I don’t think I’d be able to even do that. And I don’t think I’d be able to keep my HA house if I owned a property, even if it wasn’t livable in? Plus I’m not sure where I’d find the money to do it up.

Re other inheritance - I don’t think I’ll get any more in terms of a lump sum from my dad. He’s now married to a career divorcee who will make sure we get as little as possible. He has an industrial property which will never be sold and the income from renting that will be split between us all, but I’ve no idea what the numbers look like there. I will inherit from my DM, but I’ve no idea how much. Definitely less than £200k. And she’s only 70, I hope that won’t be for a long time.

I've recently inherited some money from a parent. It's small as inheritances seem to go, but would be in the realms of 'put it towards a house' were that an option. As things are, I'm losing so much in benefits that it'll only be a couple of years before I qualify again. Like you, I feel this is fair enough!

Anyway, I found out as much as I could about the rules around acquiring funds while claiming. There used to be a loophole involving trusts but, as I understand it, that has now been closed. I think your dad could open a trust for his grandchildren - you'd need to check.

Honestly, the best place to start asking is the DWP. There may be something useful on the moneysavingexpert forums, and you could get advice from Benefits & Work (membership about £20).

Sounds like you need a long, clear, explanatory chat with your dad. Wishing you a satisfactory conclusion.

It sounds to me like he is trying to be fair and equal to all but that his intention - though misguided in its quantum - is specifically to help you. Ie he wants to earmark a contribution to get you on the property ladder without being unfair to the other siblings. Have you considered that angle? Maybe that’s all he can release and he is genuinely trying to help you.

I have one brother who may be able to do that, although I know he’s already pretty stretched with his own mortgage.

Shares and ISA's are still classed as savings and will affect her benefit entitlement.

I guess your only option is to request he puts your share aside or for your children in his will

Could he gift the money - via a trust - to your children?

Thank you, yes I definitely need to do some research on the best way forward. I’ve just thought - my eldest DC (22) claims UC and PIP and is unlikely to ever live independently. So I guess money in trust for her would also be a problem as it would take her over the UC threshold. My youngest I think will be ok, she can’t wait to get out in the world and is quite driven to earn money.

Yes I think this could be the case.

Could he put in in a pension fund for you? It’s being used for the future then and not being ‘squandered’ on day to day living. It is very unfair on you that there is this stipulation

Sounds like you're really trying your best in life with being a single parent and trying to increase your hours. Agree with everyone else, your dad needs to be told your predicament and how your case can't be treated the same as your siblings. It's not a life changing sum of money you're getting but substantial enough to make a difference. I can see why you feel frustrated.

But if you’re eldest is also in the same situation he might have the same reservations.