Inheritance protected so that benefits can still be claimed

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Can inheritance of around £200,000 be somehow protected so that benefits can still be claimed if provision is made in a will to hold that inheritance in some kind of trust? The claimant will never work for various reasons.

The lump sum doesn't have to last them for the rest of their lives or until State Pension Age. They live on it and then claim means-tested benefits again when that sum goes under £16K. There are actually quite a lot of things you can do with that money which don't upset the DWP. For example, you can do reasonable work to your home and buy things for your home (a new bathroom would be fine, but gold plated taps wouldn't), you can have a holiday (two weeks in the USA is fine, but probably six months in Barbados isn't). You can buy a car (a reasonable car is fine, but a Lamborghini would probably cause problems). You could go to bingo once a week, but going every night and spending £50 each time would probably cause a problem. You can donate a reasonable amount to charity and/or buy membership of something such as the National Trust etc.

If the DWP do decide you have actually squandered your money, they won't allow you to claim benefits until such time as they think you would have reasonably spent that money.

The point is that the system should be flexible to allow for the fact that someone with a substantial disability is going to burn through the money a lot faster than someone without. For example, the means testing you’re suggesting kicks in twice. Once with the DWP and once with Local Authority funded care. If you need care at home the average cost here is around £900 - £1000 a month. £200,000 isn’t going to last long at that rate, and when it’ gone, the means tested benefits don’t begin to cover what it actually costs for a decent life with a disability. It’s not a question of holidays in Barbados or gold plated taps. It’s having enough to make ends meet with the extra cost your disability brings - just on a daily basis.

Very many disabled people have never worked and don’t qualify for contribution based benefits. And even the higher rates of PIP plus CA only come to around £250 a week. Not a lot when you’re talking substantial disability. And if dad is claiming UC, carers allowance of £76.75 is deducted £ for £ and replaced with carers element - £42.75 per week, meaning that they are £34 per week worse off.

I get your point, but I wasn't actually talking about Local Authority funded care, only DWP means-tested benefits. It only kicks in twice in certain cases. Many people only claim means-tested benefits and don't have/need care in the home. Depending on the amount involved, Local Authority Funded care can often continue free of charge as the financial threshold is lower, so in many cases it's only the DWP benefits that are affected. Even when both are affected, the claimant just waits until they have are below the relevant thresholds and then applies again. It is a kerfuffle, but it does save both the DWP and Local Authorities some money and seems the only 'fair' way to do it. And care at home is quite far-ranging. It can go from one half hour visit a day, plus some housework each week, to four double-up visits a day. It just depends on the disability and the level of care needed. Many people with disabilities (of which I am one) have a reasonable quality of life; sadly many do not. As we all know, carers are grossly underpaid, hence the profession often attracts a poor quality of staff, but that is a subject for another topic.

i have read 80% of comments but im confused i admit.I thought the thread was about a carer who owned a house outright but was going to recieve 200K in an inheritance and wanted to keep what benefits they were on and im guessing means tested

basically wanting the full 200k and keeping their benefit so why is most of the thread talking about the lives/future/trusts of someone disabled and that person is not the one going to recieve 200k

if im wrong i apologise its just a rather unclear thread im afreaid

I agree. I am not sure why the thread got taken off course and people began talking about a disabled person receiving an inheritance. I believe it is the carer who is receiving the inheritance, so should notify the DWP and stop claiming means-tested benefits until such time as their savings go below the £16K threshold. There maybe a way to put that money directly into a trust, but once it hits the claimants bank account, it is deemed to be theirs.

There is an interesting point I would like to make about inheritance though. This is a documented case. A middle-aged claimant received an inheritance (say £50K as can't remember the exact amount) and wanted to leave most of it to his son as an early inheritance and just take £500 for himself. The money went into his account and he immediately transferred all of it, apart from £500, into his son's bank account. The trouble was that it went into his account first, so when the DWP found out, they decided to take him to court. The judge said that it was not at all unreasonable for the man to want to give the money to his DS as an early inheritance, but he should have got the solicitor to draw up a Deed of Variation so that they majority of the money went directly to the son and only £500 went into the father's account. That would have been perfectly legal. Of course, it wouldn't be legal to put it in some random person's account as he probably wouldn't be leaving them an inheritance. Unfortunately, because all the money went into the claimant's account, the judge had to sentence him accordingly.

I've skimmed the thread but, like others, I'm confused about what exactly the scenario is.

Is the person inheriting the disabled person or their carer?

What benefits are currently in payment to (a) the disabled person and (b) the Carer.

Is the inheritance actually cash in hands of the recipient or has it been left in trust?

Income is taken into account as well as savings for LA funded home care though. So someone may well be below the savings threshold, but would still contribute to care fees because of their income. Where we are, the LA counts the care components of PIP/DLA as income as well as AA and pension credit and that’s actually pushed a relative’s contribution up considerably.

Yes, absolutely. I was just saying, for example, someone who has a fully-funded home care package might not necessarily have to contribute anything to the cost despite receiving a substantial inheritance. I do know of someone who was in this position about 16 years ago and even they were surprised that following a revised financial assessment, they still didn't have to make a contribution.