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.

So many nasty pp’s on here.
My friends relative with Down’s syndrome gets £900 a month in benefits.
Not much to live off is it?
Wasn't so bad when her parents were alive to care for her but now a person who needs almost 24 hr care is relying on siblings to take her in. And any respite for those siblings is really expensive so a trust fund enables you the taxpayers to pay less not more because without the siblings taking their sister in then ss would have to take over.
You haven’t got a clue.

I also don't want the stress of having to come off benefits then reapply for them all again a short time later.

I do think this is a key point in all of this. It is a lot of work to get things like PIP.

@TeenDivided thank you for understanding.

This.

Hi OP. Seek legal and financial advice. It will cost, but not as much as structuring things wrong.

The other day there was a person posting that lives in a council house that was inheriting a house an planned to let it for an income whilst retaining the council house. That appalled me. So would a situation where someone able, and on out of work benefits had a large stash of money, but this really isn't like that. To be honest, a trust/deputy arrangement is probably a correct thing here even ignoring eligibility for state benefits given that the person doesn't have capacity to make large financial decisions. Good luck.

Not if its declared, its not and dealt with by legal means.

There are means tested and non means tested benefits for those with disabilities and those caring for them.

It’s right that the non-tested benefits not be affected by having £200,000 in the bank, but also right that the means-tested ones are.

But PIP isn’t means tested, is it?

@Juliet55 i fully understand, it is a nightmare getting them in place in the first instance.

Then if you did have to come off and then reapply later, you also have to prove 9 times out of 10 what you did with the money and provide detailed proof and receipts as my friend who received a back payment from dwp for years of being paid incorrect amounts. They didn't want to accept that purchasing a cooker, carpeting an unfurnished flat and other necessary purchases and made out she had spent it for the sake of it to get her under the limit for benefits. She is the most honest person I know and that flat was literally bare and she had moved from her parents house in her late 40s (as they'd cared for her) with nothing. It was an incredibly stressful time and made her poorly. The dwp are an awful system to have to deal with.

But actively getting it in the first place (and keeping it come reassessment) , for seriously ill and disabled people, is a nightmare. Even when most appeals/tribunals are granted when it gets that far.

That's the difference between a beneficiary with disabilities and the carer. The thread has been skewed because posters are approaching this from a disabled person's point of view. If the father is the carer and is set to come into 200K, of course the question of HIS benefits is practical.

His son, presumably, and quite rightly, will be in receipt of his own benefits.

It is stated the house is paid off. This doesn’t mean it is free of cost. Houses cost money to maintain. This is a big issue that Mencap flag up when people talk about leaving their family home to their disabled child. In 20 years time who pays for the new kitchen? What about when the boiler conks out and needs replacing? The windows rot? Or the miniature firs in the rockery grow to forty-foot monsters? You can’t just phone the council and get them to fix it for free. It takes a substantial sum to maintain a house over a lifetime if there is no other significant income.

That is precisely how interest is paid on a savings account.

I’d love though to see your calculations that show that depositing £200,000 for a year in an account with an APR of 6% doesn’t yield you £212,000 at the end of the year.

As I suspect you’ll struggle with the maths, I’ll do the first but for you which is to tell you that if applied monthly 6% per year equates to 5.841% per month.

It’s amusing, as an interest rates trader, to have people on here tell me I don’t understand interest rates as they themselves get their numbers wrong.

Yes, but the suggestion was being made that PIP would have to be reapplied for. It wouldn’t, it’d be unaffected by the inheritance.

Yes but it would have to when the time for reassessment came around which adds to the stress and mental load alongside those that would be needed to be reapplied as well as showing they didn't must waste the money. I believe that was what she meant.

Apologies for the random tag but my phone won't let me delete it @juliet

There is more to being in receipt of Carers Allowance and/or the carers element of UC. These lift the benefits cap, remove the obligation to work and attract other sources of income ie grants. Plenty of people claim full disability benefits themselves and then Carers on top. The definition of caring has been stretched beyond belief by the DWP, and any caring that is carried out is never checked
Severely disabled people having compensation or inheritances held in trust isn't the issue. It's the sheer burden of the benefits system with its constant expansions and levels of fraud that is. Plenty of people are receiving a fortune in benefits, plus priority for social housing etc. Carers benefits should only be paid in respect of those in receipt of the higher levels of PIP, DLA and AA, quite possibly at a more generous level, and full respite care should be available. Carers are quite often broken by their obligations caring for severely disabled people and die of exhaustion before their loved ones do. They need more support

If an adult is able bodied and need to go into a care facility, their home and assets will be used to pay for this, as in my Mums case, until there is £16k left. Why would someone with a disability be able to remove their assets from the benefit equation?

Nope, I had £40,000 in inheritance from my grandmother held in a trust until I was 25. Couldn't access the money but couldn't claim benefits as a single 21 year old mother as even money in trust is included in universal credit calculation. I had to write a long letter asking for it to be released early so I could afford to live. Luckily on spent £10,000 before I was back on my feet.

Now I think he should set it aside in a legal way

Tgis country is rubbish, health education, policing, local authorities going bankrupt

and yet this govt is spending billions a year on this pathetic state

so take what you can is my opinion

especially if you are a career being paid an absolute pittance by the pathetic govt for sacrificing your career and life!

That’s awful OP. I’m assuming you’re talking about yourself. It’s a shame you can’t work but y it can’t have £200k and claim benefits. You need to buy a property outright and see a financial advisor to see how you can make the money work for you. You can still claim PIP.

Depending on the age of the person she's leaving it to I think it might be possible to buy an annuity which would give them an income. The income from the annuity would clearly still be taken into account for means tested benefits but might well be welcome.

Op we have a close relative who is disabled and has been in care funded by local council all of their adult life. Have sought legal advice on how money can be left to this loved one without it being taken by the authorities and their advice was - spend the money before you die, don’t leave it!

Excellent post from @Thewizardbinbag who completely nails the issue in a nutshell.

But surely as a beneficiary of the trust they'd still have an interest in the property?

Either way it's taking the piss to stay on benefits when you've got that amount of money stashed away. Some people who earn just enough to NOT be able to claim benefits would just have to eat away at that chunk of money. And they're not being supported by the tax payer. So infuriating.

I am not an expert, but my understanding of discretionary trusts is that they are discretionary - it is somewhat up to the trustees who gets to benefit and when.