Executor of will not paying to benefactors

[pumkinpopsickle]

I have a question if anyone is able to shed some light as I can't find much info online.

My grandfather died and left his house to his children. It's been sold, and the money is in the executors account (my aunt). The will stated that it should be shared amongst his 3 children.

My father wants his share to be sent to his children (grandchildren of deceased) directly - but my aunt doesn't want to do this for fear she isn't legally supposed to.

It isn't loads of money (about 3k) to each of his children. He is apprehensive to receive it into his account first as he has been homeless the last few years and is finally getting himself sorted but is worried that a large amount of money going in and out of his account will effect his benefit entitlement.

Can anyone shed light on this? Does my aunt have to pay the money into my fathers account directly or is she allowed to share it out on the request of the benefactor. Or if it goes into my fathers account will he loose benefit entitlement even though he's not keeping the money.

For what it's worth, we have all tried to get him to keep the money but he is adamant that the majority is to be gifted to us.

Thanks for reading.

Whatever he does could affect his benefits entitlement. If he gives the money to his children that could be regarded as deprivation of capital regardless of whether the money goes through his bank account or is passed direct to you.

Your aunt can follow your father's request safely. However, for tax purposes it will count as a gift from your father to his children so will be subject to IHT if he dies within 7 years. The safest thing would be for your father to execute a Deed of Variation. That would have the effect of altering the terms of your grandfather's will so that the money came direct to you. However, this could still affect his benefits.

@prh47bridge thank you for the reply.

I thought that would be the case. I'll pass on your knowledge, thank you.

I guess he just has to do what he's doing and see how the chips fall.

Hi pumpkinpopsickle Of course prh47bridge is absolutely correct legally.

The only point I would add as a benefits expert is that £3k would have no effect on Universal Credit (including the housing allowance)

Capital or joint capital over £6,000 is treated as providing income, known as “tariff income”, of £4.35 per month for each additional £250 (or part thereof). For example capital of £6,250 gives monthly tariff income of £4.35. Capital of £6,250.01 gives a monthly tariff income of £8.70.

The tariff income is the amount benefit would be reduced by. Until the capital is spent and the traffic reduced or nil .
So a negligible amount.

The lower limit is £6000, so any capital below £6000 is disregarded.
The upper limit is £16000, so anyone with savings (capital) over £16,000 cannot get Universal Credit.

However I do not know which benefit your father is on. So just to cover most bases..

Pension Credit doesn't look at capital until £10k .
If claiming Housing benefit with pension credit capital isn't looked at until 10k and reduced between 10k-16k at which point no longer entitled to housing until reduced under 16k.

If I have read your OP correctly, there is no need to go to the expense of a deed of variation as the amount due is below the limits. Just have your Aunt transfer to him and he can transfer to you. No laws broken.

If you want clarity and the benefits involved are different please PM me.

Thanks for the comprehensive reply @Trickyboy.

It was a big help.

He has just put the money into his account and distributed it as he planned to.

I think it has left him with about 14k for himself. So he will find out in the new year how his benefits are effected.