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Inheritance and benefits

18 replies

Carrotsandbroccoli · 25/08/2021 17:05

I wonder if anyone can offer accurate info on this situation. There’s a lot of angst involved and certain family members are behaving very badly, but I just wanted to get the basics right in my head.

My partner’s parent died. The estate was meant to be divided between the three children. However, one sibling has a serious illness that affects ability to live independently/manage money etc. Therefore, in what now seems like an appalling error of judgment, the parent left two thirds to the other sibling (not the ill one, not my partner) with the understanding that they would manage it all and help the ill sibling spend wisely etc.

The sibling who is supposed to be helping the ill sibling has made it very, very difficult for the latter. They are basically saying they can only transfer a very small amount to their ill sibling per year (approx 5% of the total due to that sibling). They are refusing to budge, despite the ill party needing very specific things that are currently unaffordable.

The behaviour of this person is clearly appalling. But they are trying to justify it by implying that their benefits will be affected if they suddenly start giving away large amounts of money.

Surely this can’t be true?? I know they receive benefits for their disabled child, and probably also carer’s allowance (this is where I am a bit unclear). But if an inheritance were to affect these benefits at all, wouldn’t it be the massive chunk of money that lands in the account in the first place that causes a problem rather than the subsequent usage of that money to purchase things for a sick sibling??

What’s more, I didn’t think inheritance actually affected disability allowance in any case? Can anyone shed light here?

Just to clarify, none of the money is due to me or my partner, so we have no vested interest besides trying to make sure the ill sibling gets their due.

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SevenOldLadies · 25/08/2021 17:09

When you say “implies their benefits will be affected”, is there any way that the non-ill sibling might mean that the ill sibling’s benefits might be affected, rather than their own?

Jng1 · 25/08/2021 17:14

Was the money tied up in a trust for the ill sibling? If so, then there should be terms laid out and trustees appointed etc.

If it was just a lump sum left to the non-ill sibling with a 'verbal agreement and understanding' then it is a mess!

Carrotsandbroccoli · 25/08/2021 17:19

Well, that was one of the original considerations as to why a lump sum wasn’t paid to that sibling, esp since housing costs are involved.

But I don’t think that’s what they mean here - for example, ill sibling needs a couple of quite expensive things to make home life easier. If difficult sibling just paid for them out of the designated money, could that possibly be a problem? It would literally be paying for goods/services to a third party.

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Carrotsandbroccoli · 25/08/2021 17:35

@Jng1

Was the money tied up in a trust for the ill sibling? If so, then there should be terms laid out and trustees appointed etc.

If it was just a lump sum left to the non-ill sibling with a 'verbal agreement and understanding' then it is a mess!

Oh it’s definitely a mess, I can assure you! And I fear that the sibling in charge of the money is not going to use it as agreed Sad
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SpiderinaWingMirror · 25/08/2021 17:37

No it would not be an issue. I doubt it would be an issue if they gave them money either.

Carrotsandbroccoli · 25/08/2021 17:39

@SpiderinaWingMirror

No it would not be an issue. I doubt it would be an issue if they gave them money either.
Thank you for this. That is what I suspected.
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toomanyhobbies · 25/08/2021 17:44

If the ill sibling is getting housing benefit, universal credit council tax reduction then yes receiving large sums of money regularly in to their account or a large lump sum would affect their benefit.

Capital under £6k is disregarded, everything from £6k - £16k a tariff income is taken. Anything over £16k will mean they are not entitled to any of the benefits mentioned above.

CornishTiger · 25/08/2021 17:49

If they are saying it will affect their benefits the carers allowance and dla for child is not affected by capital.

If they are worried about the benefit of the person they are giving the money to then it’s doesn’t matter hugely if they stay under the capital limit.

Of course they could buy the equipment in their behalf too.

CornishTiger · 25/08/2021 17:52

How much inheritance are we talking

User5827372728 · 25/08/2021 17:55

@SpiderinaWingMirror

You are giving wrong advice.

A large lump sum of inheritance will affect benefits

Nosilayak · 25/08/2021 17:56

I'm interested in this as we might, one day, be in a similar situation. My dh is one of three brothers. Eldest brother has lived in a mental health unit since the age of 18 (he is now 60) and will never come out. Fil was advised by a solicitor that because eldest brother inheriting would drastically affect his benefits, to make a will leaving two thirds to one brother and one third to the other with the understanding that the brother being left two thirds looks after eldest brother, visiting him, providing him with spending money, buys clothes, cigarettes, treats etc for him for the rest of his life. Fil has chosen youngest brother to do this as my dh has his own mental health issues and wouldn't be able to handle the situation. However, what worries me is that the youngest brother lives a very long way from where eldest lives and has a history of hardly ever visiting him. Who will make sure he sticks to his word and takes care of eldest brother financially? It's not really my problem as it's my in laws and I don't want any extra money from the will or the responsibility of eldest brother when I have my own dh to care for. I suppose we have to trust that youngest brother sticks to his promise.

Akire · 25/08/2021 18:00

In cases like this it needs to be left in a trust fund but that is expensive sort and needs someone look after and only can be used certain narrow things. I’ve told my parents not bother leaving me anything if not in trust fund as I just have use for living expenses and might as well be used by my working siblings to make difference to their lives. Nothing illegal in this. But if I have any money it will make no difference at all.

dontstealmymagnolias · 25/08/2021 18:02

As a pp pointed out, of course it will affect their benefits (I'm assuming that they are unable to work and in receipt of means tested benefits). The sibling is also correct in saying that large or regular payments being deposited into ill sibling's account is problematic - that will or could be considered 'income' by DWP.

Smudgeis13 · 25/08/2021 18:11

Any income or monetary gift which comes from a voluntary source e.g. family member/charity is disregarded by DWP. Therefore no effect on a means-tested benefit.

Carrotsandbroccoli · 25/08/2021 18:16

Many thanks for all the replies.

To clarify, I think it was established that the ill sibling cannot receive large sums of money - his specialised housing etc would be in jeopardy.

But the sibling who has the money only receives DLA and carer’s allowance I believe. And those, from what I’ve gathered, aren’t affected by an inheritance? And even less affected, presumably, by paying for equipment for a sick relative?

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CornishTiger · 25/08/2021 18:19

Exactly this ^^

CorrBlimeyGG · 25/08/2021 18:21

DLA and CA are not means tested, so that one can do what they like with their money, or any money held in their name.

People on means tested benefits can receive cash gifts from relatives without it being classed as income. Only if the gifts take them above the capital limits will it then affect their benefits. Physical gifts such as a new bed or medical equipment would not be classed as income or capital, so not affect their benefits at all.

I'd get confirmation of the above from CAB. It would make it clearer if you label the siblings A, B, C as your post gets a little confusing!

Carrotsandbroccoli · 25/08/2021 18:24

@CorrBlimeyGG

DLA and CA are not means tested, so that one can do what they like with their money, or any money held in their name.

People on means tested benefits can receive cash gifts from relatives without it being classed as income. Only if the gifts take them above the capital limits will it then affect their benefits. Physical gifts such as a new bed or medical equipment would not be classed as income or capital, so not affect their benefits at all.

I'd get confirmation of the above from CAB. It would make it clearer if you label the siblings A, B, C as your post gets a little confusing!

Thanks. And good call on the ABC thing!
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