Inheritance and benefits matter

[nb47]

Hi All

I am retired and in line for a six figure inheritance. Some of my benefits are means tested (for example I receive direct payments from the council for care in my home) and I would like to pass over my entitlement to inherit to my adult children, with of course the permission of the other executors and beneficiaries. This matter is at the earliest stage, the application for probate is about to be made.

Am I correct in thinking that as long as I don't make the mistake of taking the money and then passing it to the children then I am acting lawfully?

Regards and Thanks

NB

A deed of variation can be made within two years of the testator's death and if all beneficiaries are adults, so that they can consent to the variation.

First came to my attention on the death of the Princess of Wales, which was of course just to avoid paying IHT rather than to avoid loss of benefits, so much less pearl clutching going on about it.

Perfectly legal, all good.

Our tax and benefits system is so skewed towards the rich, think of Amazon and other large multinational companies paying zero company tax in this country. Part of the reason this continues unchallenged is the way attention is focussed on the very small amounts of benefits saved as in this case rather than in the big numbers which really would make a difference.

We can't afford to pay nurses and health care workers a decent wage to do the essential work they do but we can afford to waste billions on contracts for a test and trace system and PPE that was not fit for purpose.

But you haven't pre deceased the Testaor, they died and named you in their Will, if you died before them then your children would have inherited the money but you didnt die so you inherit, when you die your children inherit whatever you have left them in your Will. Do you actually genuinely not need the money or are you just trying to avoid losing your benefits.

I think it’s a really shitey scummy thing to do.

So basically you’re looking at ways you can ensure that other taxpayers subsidise your children inheriting a large sum of money?

Hello @nb47

I haven't read the full thread (where there seems to be an awful lot of finger wagging going on) but LMS Re [2020] EWCOP 52, a case from last year, may well be helpful to you.

It's a decision in the Court of Protection which hinges on the testator's wishes. If the testator wanted you to benefit from the bequest rather than for it to reduce your dependence on means-tested benefits, and the court thinks she would have changed her will had she known, then a variation may well not be regarded as deprivation of assets.

An article here: www.weightmans.com/insights/deeds-of-variation-and-deprivation-of-assets/

@KittenCatcher

But you haven't pre deceased the Testaor, they died and named you in their Will, if you died before them then your children would have inherited the money but you didnt die so you inherit, when you die your children inherit whatever you have left them in your Will. Do you actually genuinely not need the money or are you just trying to avoid losing your benefits.

Let me explain.

If a beneficiary chooses the 'disclaim' option, then the will is considered from that moment AS IF the beneficiary pre-deceased the testator.

If the person has died and the will is in place then you cant do anything about it

You will be treated as having the money regardless if you give it to your family or keep it yourself
Even if all the executors agree to this you will still be treated as if you have had the money

My friend was in a similar position and asked her parents to change the will several years ago bypassing her and any inheritance going to her children
This is perfectly legal as she is not in the will as a beneficiary and is only an executor
My friend opened up a separate account for the beneficiaries inheritance to be paid into so that she could distribute the money to the beneficiaries

However not all benefits are means tested so if you get PIP you won’t lose that
But HB UC ESA if it’s based on your income
Council tax you will no longer be able to claim

[quote FreedomDrops]Hello @nb47

I haven't read the full thread (where there seems to be an awful lot of finger wagging going on) but LMS Re [2020] EWCOP 52, a case from last year, may well be helpful to you.

It's a decision in the Court of Protection which hinges on the testator's wishes. If the testator wanted you to benefit from the bequest rather than for it to reduce your dependence on means-tested benefits, and the court thinks she would have changed her will had she known, then a variation may well not be regarded as deprivation of assets.

An article here: www.weightmans.com/insights/deeds-of-variation-and-deprivation-of-assets/[/quote]
yep, I saw that case. I believe the Court of Protection is in place for those unable to make their own decisions for whatever reason. I am not sure how precedents set in that court affectthe other courts because of course the average adult plaintiff will be considered an able decision maker.

It's possible you may get away with it, however it's morally pretty repugnant. However think hard about your future years. My mum has paid for her private carer for many years. Because she funds it herself she gets exactly what she wants when she wants and has been treated amazingly by her carer. If she needs more hours then no trouble at all. If you give this money away you may well regret it.

If you think this is all okay, morally and legally why are you asking us. Why not just accept the money to improve your situation and then give some away to your children.

The DWP also know when Probate Is accepted and they can and do check wills

At the moment for you it’s not a problem as you don’t have the money but once it hits your account you do need to inform them within 1 month is normal time scale

My brother told my parents he didn’t want to be left anything in their will for similar reasons and so what would have been given to my brother would go to his daughter
As it’s all done legally in a will and was done several years ago my brother not inheriting anything isn’t an issue

@MrsLarry

OP, if you do this then I really hope it catches up with you and you get what you deserve. The benefits system in this country is crumbling before our eyes. People are fighting for the benefits they rightly deserve while people like you, with the clear morals of a scrapyard dog, take take take. You should be ashamed.....though I doubt you will be.

Sorry, but I have to agree with this, there are so many people out there who are in genuine need of benefit money, yet you are happy to take advantage of the system. It is a terrible attitude to have.

Wow... Just wow. You want to pass your inheritance on to your kids because you don't want to use it to pay for your care? You want us to pay for your care when you have just passed up a 6 figure sum?

The DWP also know when Probate Is accepted and they can and do check wills
At the moment for you it’s not a problem as you don’t have the money but once it hits your account you do need to inform them within 1 month is normal time scale

It would need to be done by a deed of variation.
@nb47 would not receive the money. I think she knows that.

@nb47, definitely one for legal advice, especially on the effect of the LMS case, given the amount involved.

If you get advice from a solicitor and they can find a legal way for you to do this you won’t be looking over your shoulder waiting for someone to shop you for the rest of your life. It is actually worth paying properly for the advice for peace of mind.

Just trying to find out on here if you can circumvent a likely deprivation of assets is no subsitution for advice from a qualified advisor. You might be told you can’t do it, in which case you have a six figure inheritance to spend. Just pay the fees so you can relax one way or another.

When you fill nine financial forms for benefits ( finance assesment ) it asks if you are going to be the beneficiary in a will. So have you been saying no ?

I found one reference, OP -

uk.practicallaw.thomsonreuters.com/a-122-8211?transitionType=Default&contextData=(sc.Default)&firstPage=true

Elsewhere, I found an assertion rather than any firm case law in an extract from another article with slightly different circumstances -
'While a disclaimer has a retrospective effect, applying from the date that the entitlement arose, with the person disclaiming the inheritance not legally being a settlor, the local authority is again unlikely to accept such an action as anything other than deliberate deprivation of assets. While this could be challenged by you on behalf of your mother, the process is extremely long and tedious and you are unlikely to be successful.'

Depending on what advice you receive, I suppose you might want to scenario plan what happens if the LA decide a disclaimer was a deliberate deprivation of assets and stop funding your social care. If you rely on the support, do you have the resources to fund this and fund an appeal or will your DC do this? Or provide the care themselves?

And yes, if in England, there are requirements for Solicitors to breach client confidentiality in some circumstances, including in relation to certain crimes, proceeds of crime and money-laundering. Some lawyers in foreign jurisdictions find this surprising.

@Unsure33

When you fill nine financial forms for benefits ( finance assesment ) it asks if you are going to be the beneficiary in a will. So have you been saying no ?

Which benefit applications ask you that question? It's not been on my form.

It would be irrelevant anyway because a lot of people don't know if they're in a will, some people could be thinking they are and find out after someone's died they weren't, some people could genuinely believe that aren't because of relationship breakdowns and not having any contact.

And then the amounts someone will inherit will vary so much, from a couple of hundred to millions. I don't understand what the point of asking someone if they've been included in someone will be at the point of applying for benefits. And then there's people who don't have wills, like a great uncle of mine and great great nieces and nephews ended up inheriting some money.

I think what the OP is trying to do is wrong. If someone has access to six figure sums that should be used to find their lifestyle and care needs instead of the tax public.

Tax payer *

@KaycePollard

So basically you’re looking at ways you can ensure that other taxpayers subsidise your children inheriting a large sum of money?

In the way the Royal Family did, to avoid IHT.

I'm guessing they have a tad more in reserve compared to OP.

If it's good enough for the royal family; it's good enough for the OP. The rich and government of this country are so corrupt; I don't blame any 'ordinary people' for also doing this type of thing.

@loantopil

Regardless of whether it is possible or not, perhaps have a think about whether it is morally acceptable to do this when you're receiving benefits and care payments. Perhaps use the six figure inheritance to be financially responsible for yourself?

I would normally agree with you, however, once you stop getting benefits I believe it can be very difficult to get them again.

I'm not saying its the right thing to do, but if this is the low 6 figures, say 100k, that wont last a lifetime

That is not strictly true. Solicitors are human beings at the end of the day and there a certainly a few who would consider contacting the authorities anonymously in a fit of pique

As they should when they have a client trying to pay them to enable them to commit benefit fraud.

HowRudeolfYou
this is the financial assessment form following a care needs assessment by local authority social services.
to decide how much help a person can get to pay for their care needs, and if/how much the local authority will contribute.