Executor worried brother’s inheritance share could affect benefits and leave him vulnerable

[Gitsandshiggles123]

Dad has died and left his house to myself, sister and my brother. I’m the executor of his will.
My brother has various needs and would be classed as a vulnerable adult. He has a care worker and struggles with day to day life. He’s married but I feel this is just a marriage of convenience to suit his wife.
He’s on various benefits and has never been able to hold down a job.
My parents always stuck their heads in the sand regarding my brother. They wouldn’t listen to my sister and I when we told them that just leaving him a 3rd of the house would not help him financially because it would affect his benefits.
So now dad has gone my sister and I are both really worried how we can help him. He’s involved with some ‘friends’ that we feel would take huge advantage of him.
Does anyone have any advice? Obviously we are going to consult a solicitor but just trying to find out first as much as possible. Thanks

I think some benefits aren't affected by any savings you may have.
But obviously if you have significant savings, you don't need to rely on benefits.
He might be able to refuse his inheritance, but that could possibly be seen as deprivation of assets.
I suppose it depends what benefits he claims?

I'm unsure what benefits he claims. We aren't very close, he's also a very volatile person, so much so it's difficult to discuss anything with him without him losing his temper and either storming off or crying.
He wasn't a nice person growing up, then got involved with drugs for quite a few years. He has since found religion and this has helped him become clean.
But even he has admitted in the past he is worried 'they' will want his money once he gets the inheritance. I just worried he could become homeless and worse. We just want to be able to protect him going forward.

For clarification, IANAL, but I found a similar scenario online and this was the response from an online lawyer...

If your brother is willing to cooperate with you and has capacity to understand and enter into a legal variation then you could consider what is known as a Post-Death Variation. This essentially involves varying the will after death to redirect the inheritance into a trust. This requires the agreement of all beneficiaries who would be affected by the change so presumably particular here your brother. A deed of variation must be executed within two years of the death to be effective for tax purposes otherwise it will counters a disposal which might (or might not) have consequences such as capital gains tax consequences.

If a deed of variation is agreed upon, you could set up a trust such as a discretionary trust or, if your brother qualifies, a disabled persons trust, which can potentially have some tax advantages which specifically address your brother's circumstances, potentially stipulating conditions for the release of funds (e.g for education, health care, housing) that support his well-being and long-term stability.

I can't vouch for the accuracy of the above, but it may be worth talking to a solicitor to see if you could do something like this?

I'm not sure you have much choice here. He's legally entitled to his share of the inheritance so you can't withhold it from him. Short of hiding the money from the DWP there's probably no way to stop this from affecting his benefits.

We would never deprive him of what is his legally or do anything illegal by hiding any money. We are just wanting to find out if there is anyway we can protect him as worried as well as losing his benefits he could be taken advantage of.

Why would a man on benefits unable to care for himself be considered a good call as a "marriage of convenience" by his wife?

OP, I think you need to speak to a solicitor to see how this money can be safeguarded for your brother, so that he can benefit from it, but his grabby friends won’t be able to. It will almost certainly require your brother’s co-operation, though, so perhaps you need to find out what would be possible before speaking to him.

Without going into details regarding his marriage, let’s just say she didn’t live here before they got married…..

If he receives pip then it won't affect that, as disability benefits are not means tested. If he receives universal credit then yes it will affect that, as he would have more than £16k in savings, so would have the means to support himself. Which is the right thing to do, as taxpayers shouldn't have to fund someone with a huge stash of cash in the bank.

As it is a house being sold, would it be enough to fun him buying a 1 bed flat, so he has secure housing? Then he would benefit from the money and it wouldn't be at risk of predatory "friends".

Unfortunately not enough to buy anything. Obviously we are concerned about how this would affect him.

Can’t he just live off the inheritance then restart benefits? Save the taxpayer a load of cash? The alternative is you sisters get loads more money and he keeps getting supported by the state. There was another post on here recently where a woman was saying she didn’t want to use her inheritance as it would stop her benefits. This really isn’t what benefits are for, and is why the country is going bankrupt from all the welfare. No one wants to use their own money to live.

First of all my sister and I would not receive any of his money. Nor would we want to.
Secondly it’s the vulnerable side of the situation regarding him receiving the money. Of course I don’t think having money in a bank account while claiming benefits is the right thing to do. I’m concerned about how he would cope or being taken advantage of.
I’m annoyed my parents didn’t set up a trust to protect him.
He needs safeguarding. He’s extremely anxious now and spiralling into depression.

Exactly this. It really annoys me when people who come into money try and squirrel it somewhere to prevent benefits being stopped. If you have money you don’t need the benefits until the money is gone.
In this case there’s the added issue of ‘them’ (whoever they are) taking advantage and getting the money from him but if he’s a grown adult with mental capacity, the top and bottom is it’s up to him.
you could help by ensuring his direct debits are set up for his bills. See if he’d agree to you having access to his banking to monitor if any indications of being taken advantage of, but at the end of the day, how the money is spent is up to him, and dare I say it, his wife , as whatever her motives she is is next of kin.

Probably because trusts cost money. There are taxes/charges to pay and legal fees. For a relatively small amount of money it simply isn’t worth it.

the answer is that yes it may affect some means tested benefits. As it should if someone has assets. But they will restart when the money has been spent.

If it’s that small an amount of money then it’s unlikely to significantly affect benefits but it’s never wise to assume benefits will continue/restart. OP needs to speak to a lawyer.

In which case, you need a Deed of Variation and a Discretionary Trust that your and your sister are the Trustees of. This way you can control the funds. There are costs involved. The other option is that he grants one of you financial Power of Attorney, but that would be quite onerous, especially if you aren't close. If you want to preserve the funds to secure his old age, you could look at putting it into a pension, but that depends on how old he is currently.

Even if he agrees to a variation of the terms of the will, it is still deprivation of assets and the whole mess will have to be unpicked. Quite correctly his means tested benefits will be stopped.

Correct which is why i said there would be legal fees. It’s technically probably possible to do it yourself but I wouldn’t (and I’m a lawyer). Then you need someone to manage the trust.

This is a situation where someone with potentially tens of thousands of pounds wants to be able to continue claiming means tested benefits paid for by tax payers. Nobody should think this is ok.

Is the money enough to buy him a small flat outright?

That would still effect their benefits, but it would only be the housing element, which they wouldn’t need anymore because they were housed.

You’d need his agreement and involvement obviously, but once purchased the money would be quite well protected from impulsivity, drugs etc because of the executive function required to sell a flat….

Just to reiterate the points being made by several posters, any deed of variation will still be counted as deprivation of assets. He is required to notify about his change of circumstances.

So, what can he do instead?

Presuming that he is in receipt of Universal Credit (UC), then he needs to spend the money as quickly as possible in a manner that the UC Decision Maker will think is acceptable.

If you have more than £16,000 in total then you will not be eligible for UC. If you have between £6k and £16k then your UC will be reduced on a sliding scale.

He needs to bring the amount he has down below those figures. But he has to do it in a way that is not counted as "deprivation of capital".

If you spend the money "extravagantly or imprudently" then they will count it as though you still have the money. Or, even if you spend it prudently but a significant purpose in spending it was to be able to carry on getting UC then they will consider that you still have the money.

So, you have to spend the money as you might if you weren't on benefits.
If you have any debts or a mortgage then it is perfectly ok to use the money to pay off your debts, that is fine.

The UC Regulations also say that it will be ok if "they purchase goods and services and that expenditure was reasonable in the circumstances of that person’s case." [UC Regs, Reg 50(2)]

So, for example, if you were to buy a newer, more reliable car, that would likely be fine (unless maybe you're buying a Porsche or something like that) or actually buy a car if you don't currently have one.

In contrast, if you were to buy a second car but you are single and can provide no reason why you might need two cars then they likely wouldn't count that as reasonable.

Likewise, if there were any essential repairs that needed doing on your house then that would be fine as well. Perhaps the roof is leaking or the boiler is broken? Or you need to deal with damp or the house needs rewiring etc.

Or if your home is short of reasonable quality furniture, fittings and equipment, it could also be perfectly reasonable to spend a reasonable amount improving poor living conditions. Do you need a new fridge or freezer?

But that likely wouldn't include buying the very top-end most expensive things.

Likewise, it may be reasonable to take a reasonable holiday, but probably not an extravagant one. Maybe even a visit to his wife's home country if it has been a long time since they were there?

It is very difficult to give examples of what would be counted as "reasonable" as different UC decision makers may vary and it will depend on your individual circumstances and your previous spending patterns.

You should also keep receipts and a record of how you spend any of your capital (even if you lose entitlement to benefits — but may claim again in the future) as evidence to support your case if you are questioned.

In summary, any large items of expenditure: new furniture, family holiday, repayment of debts etc may be accepted as reasonable expenditure, which you would have made, had you not been receiving benefits.

This will then bring your capital down below £6k and you can then reapply for benefits.

Doesn't his wife look after him? She is his next of kin.

It all depends on how much it is . Guidelines are available online to see what his threshold is . You are allowed to have a certain amount of savings especially if he is married .

If your brother agrees you or your sister could become PoA. You would invest the money in an account only the PoAs can access and each month transfer a set amount to your brothers current account to cover his living costs. This would stop him being scammed.

This needed saying.

I think you need legal advice. I also think you need to consider the two issues separately. The impact on benefits is a separate issue from the potential vulnerability from others if he suddenly has a chunk of money in his account. You are right to be worried in both counts - but the issue of possibly being exploited is the most serious as it does make him very vulnerable.
There may well be options to protect the money for him - harder to do so and retain all his benefit eligibility.
would he sign a POA form? If not. You will need some kind of Trust I think.