Mum received inheritance but is on ESA & PIP

[FullofSurprises]

I need some help regarding inheritance and wondering if someone can point me in the right direction.
My mum has come into inheritance after her lifelong partner passed away and left her in his will.
She has long term illnesses and has been on ESA and PIP for quite some time.

Originally she wanted to just gift me the money as she did not want to lose her benefits but we've found out today it's not as simple as that, and that even she were to give the money away she would still be classed as having the money.

How can this be right? She never asked to be on his will and I know she would never have accepted this had she of known this would be the outcome.
She is worried now and really doesn't know what to do.
Does anybody know a way around this?

If she has the money she should live off that rather than benefits.

Like superstar I'm in the support group on contributions-based ESA, and have been for many years. I get reassessed every so-many years in case my condition has improved, but if the assessment keeps me in the support group the ESA continues.

You need to find out exactly what your mother is on, as it's possible all this worry is for nothing.

I thought as much @Glamazoni it seems that you are forced to accept it and then controlled as to how you can spend it. How frustrating.
I believe DWP have access to probates as they're made public so I've read. They would only need to see she's on the will to class her as having gained that money even if a deed of variation was done.
Which is why the solicitor has most likely told her today that transferring it to another person isn't as simple as that and that she still has to make DWP aware. I think she has probably gone Jobcentre today to do just that.

PIP will not be affected. She will lose the income related element of ESA but retain the contribution based element. If she has to go back on means tested benefits at any point she’ll have to apply for UC.

@PerkingFaintly @Butterer I have a feeling she isn't on this. As she's been awarded for life and I don't think she receives assessments but I'll double check that in case I'm completely wrong.

The inheritance threshold for paying inheritance tax is £325,000.

Why can't OP's mum gift her £3000 every year, and then if she doesn't die for 7 years, its viewed as a 'gift' and thus part of the exemption for inheritance tax.

She'd still be allowed large purchases such as a new boiler for her home, energy efficient double glazing throughout, a car to aid mobility and reduce social isolation etc. She won't expected to live on gruel.

Deed of variation to the will. Takes all of the beneficiaries to sign it. So long as the Will hasn't been distributed should be ok. Different if the money / property is already in her hands. Have you been to see a solicitor? Some will be ultra cautious in their advice but I don't see that a properly executed deed of variation could be challenged. I thought dla wasn't means tested though?

forums.moneysavingexpert.com/discussion/5776181/can-a-deed-of-variation-leave-benefits-unaffected

This is 2018 but all answers say you cannot do it.

I agree that a solicitor’s advice seems sensible.

You can pay for it now which is great!

Likewise what about private therapy and support? She could have this daily. There are lots of small providers who do this sort of thing.

She’s in a great position and they could help her see that.

@willitbetonight because it would be classed as deprivation of capital. So DWP will still look at it as though she received that money even if she gave it away.

@JamieLeeCurtains thanks. Would she be able to buy herself a flat? Or would that be too much? She currently lives in a council flat and she hates it. But if buying a flat would be too much then she's out of options there.

@Butterer I don't think she would agree to being joint, she was already being funny about it when it was suggested her and my sister have joint accounts. I think a separate account and standing order is a good idea though. I'm going to ring her tonight to see what she has to say and I'll query about the ESA thing.

This is from one of the links in the post above for a law firm:

When shouldn’t you use a deed of variation?

There are some situations where a variation of a Will or intestacy would be unwise.

• Means-tested benefits – if a beneficiary is receiving or applying for means-tested benefits and he or she re-directs their inheritance to someone else, this is likely to breach the disclosure rules. It could make them ineligible for certain benefits or even liable to prosecution, in some cases.

I think the issue may be that if OP’s mother comes off benefits to live on the inheritance, once that money has been spent, she will then have to go through the arduous application process again. She is also unlikely to be put back on ESA but will rather have to claim universal credit. I can see how that would be daunting for anyone, but especially if she has severe mental health issues.

Thank you for that @Gogogadgetarms I think that third post down sadly is relevant to my mum. She gets old style ESA I think, which means she will now be worse off when she eventually runs out of money and has to reclaim again. How sad.

@ColdTattyWaitingForSummer exactly that. This is what she is worrying about.

This:
"If she’s inheriting a 5 figure sum that’s more than £16000 then she’s getting between £17000 and £99000 and she doesn’t need benefits."

She will also have PIP so she won't be poor. Giving it away to remain on benefits is deprivation of capital.

As others have said bank account with regular amount transferred to her current account and then set up direct debits/standing orders for all regular bills.

Exactly, ColdTattyWaitingForSummer.

Disability benefits have been fucked up very badly in recent years (all under the constant demand for "reform", shouted most loudly by the people who had least knowledge of what they were demanding reform of).

Almost every change or contact with the DWP creates the risk of something breaking catastrophically. There's simply no trust in the system. It's all very well that the theory is she comes off ESA and then go back on an adequate benefit once the inheritance runs out, but in practice she risks ending up with nothing to live on at all, and it's perfectly reasonable that she is scared of this.

Anything she does now to divest herself of the money - whether it be a deed of variation, donating to the local donkey sanctuary, or putting the cash on a rocket and firing it into space - could be taken by the DWP as deprivation of assets.

While it's shit that what was supposed to be a nice gesture on the part of your DM's partner is going to disrupt her life in this way, you would be better resigning yourself to the fact that this is going to happen and working out how you're going to deal with it rather than wasting your time looking for a loophole that doesn't exist.

Why is her not claiming ESA till the money runs out a problem? Why would you want to get round it?
She keeps the PIP, she lives off the inheritance till it gets to the allowed amount and goes back on ESA.
What’s the problem?

What’s the problem?

The problem is the disability benefits system is fucked. The cogs simply don't turn as they should.

I am not 100% sure about this as I looked up similar info a few years ago now, but I think it is possible your mum could still receive ESA, even with the inheritance. What would happen is they would take off a certain amount for e.g. every £500 pounds over the £16000 limit. If the total for ESA was brought down to zero because of the amount your mum has received, she would still qualify for ESA, she just wouldn't receive any money. I hope that makes sense. I think the best thing to do would be to speak to the CAB, they will be able to advise you best.

As others have said, PIP is not means tested so you don't need to worry about your mum losing that.

If she gets contribution-based ESA in the support group, then it isn't a loophole.

It's more akin to collecting her state pension early, because she's no longer able to work.

The basic state pension isn't means-tested either. Millionaires get it.