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Original poster

Inheritance protected so that benefits can still be claimed

234 replies

JustACountryMusicGirlInCowboyBoots · 04/10/2023 09:01

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.

OP posts:
PikachuChickenRice · 04/10/2023 22:00

JustACountryMusicGirlInCowboyBoots · 04/10/2023 20:19

Thank you to the posters who have actually read my posts and offered advice. It's become clearer from posting here that the money appears to be in trust for the disabled adult child rather than our family friend himself. That would explain the lack of provision in the will for the disabled grandchild when all other grandchildren are beneficiaries. It looks like it might be our friend that is the one missing out on his inheritance and that it's all in trust for the child. Knowing what I do of his parents this seems to be their final fuck you to him. I've suggested he makes an appointment to see the solicitor without his golden child older brother (who is inheriting directly) there and get to the bottom of things

Which solicitor - the one acting on behalf of the estate? They won't really be acting on his behalf - he might also want to take independent advice.

PocketSand · 05/10/2023 08:58

Is the family friend a trustee and is the trust specifically for a disabled person? If so this is probably been done (legally and with no fraud) in the best interests of the friend and his DC. Unless the trust is payable to the DC at a certain age (which would make no sense) it is not a final 'fuck you'. It protects benefit entitlement for both to cover basic living costs and the money held in trust can be used by the trustee on behalf of the beneficiary to make purchases (like a car for example) and to fund repairs and maintenance of his home etc.

anonibubble · 05/10/2023 17:54

I have an adult DD with mental health problems (schizophrenia, on disability benefits and UC) and this would cause a difficulty for her when I die. So I am not leaving her anything at all but leaving her "share" to her sister who will use it at her own discretion with no instructions from me. I currently pay all her bills as she is completely incapable of budgeting even over the period of 6 weeks or so between UC payments.

TeenDivided · 05/10/2023 18:01

anonibubble · 05/10/2023 17:54

I have an adult DD with mental health problems (schizophrenia, on disability benefits and UC) and this would cause a difficulty for her when I die. So I am not leaving her anything at all but leaving her "share" to her sister who will use it at her own discretion with no instructions from me. I currently pay all her bills as she is completely incapable of budgeting even over the period of 6 weeks or so between UC payments.

That's quite high risk isn't it?
Rather than leaving it in some sort of trust with her sister plus a n other as trustees.

anonibubble · 05/10/2023 18:05

TeenDivided · 05/10/2023 18:01

That's quite high risk isn't it?
Rather than leaving it in some sort of trust with her sister plus a n other as trustees.

Show quote history

No, my other daughter is a very no-nonsense but caring person. My oldest daughter has drug problems on top of everything else and needs a firm hand. And the problems with trusts is that if the beneficiary has a right to the income and the benefits people find out, it is the same as income. Also trusts are expensive to run.
This arose before when they found out there was a family trust and they pushed for us to make a distribution to her which would have reduced her benefits.

YukoandHiro · 05/10/2023 18:06

No.

Rightly so.

Rosscameasdoody · 05/10/2023 18:07

No. Not for means tested benefits. If the claimant is eligible for contribution based elements of benefits these won’t be affected. If the reason for not working is sickness/disability related, then benefits such as contribution based ESA and PIP/DLA/AA won’t be affected.

Bludyhelltobenutz · 05/10/2023 18:25

Hear hear wizardbinbag!

uncomfortablydumb53 · 05/10/2023 18:26

NO, and why the hell should it be!
I speak as someone on lifelong benefits due to disability

uncomfortablydumb53 · 05/10/2023 18:33

Sorry I misread the OP and thought it was claimant who had been left the money ignore me

Toomuchfun · 05/10/2023 19:05

I'm sure the accountants for the ultra rich would know how to do this but for middle/working class probably not. Get taxed making money and then taxed again spending it. If you save it you just get hit with 40% inheritance tax. If you think they will survive for 7 years they can gift money money now.
I mean someone who has worked and made £200,000 how could they possibly imagine getting help from the government after all the taxes they have paid.

happychops · 05/10/2023 19:29

As others have mentioned, a discretionary trust is the answer.

RedAndWhiteCarnations · 05/10/2023 19:37

Livelovebehappy · 04/10/2023 09:22

But they can live off and enjoy the £200k once received. If they need to use a chunk to live off, but also pay out for treats and enjoyment, they can do so. Then once the money has gone, they can go back on benefits?

Show quote history

Do you have any idea about how hard it to get said benefits?
i don’t know many disabled people who will willingly let go of those due to the heartache in getting them.

Changeychang · 05/10/2023 19:38

Could the person not buy a house (to live in) or buy a more expensive house and then claim benefits?

mylifestory · 05/10/2023 19:43

If they go onto the website to start a new universal credit claim it will ask you all of the questions re money, where it is etc. That should tell you what hes entitled to from scratch. Its very useful. Do not go to a solicitor, they will take you on no problem to make a big bill. Go to citizens advice, they have solicitors there and shd be able to help you on the spot or refer you to 1 of theirs. You may be able to get them on the phone, its yr best bet.

Messyhair321 · 05/10/2023 19:52

JustACountryMusicGirlInCowboyBoots · 04/10/2023 09:01

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.

Yes I think you can, if you set up a trust fund if your relative is disabled, or has needs?

ilovegranny · 05/10/2023 20:01

There are many things wrong with this country at the moment. This is one of them.

Toomuchtrouble4me · 05/10/2023 20:38

I think there is a way. My MIL inherited a very large house in Kent and she still claims benefits. Not sure which ones or how she does it, but I’m pretty sure that lots of home-owners are on benefits. So I should think if they buy a property or use it to renovate their own, they can still claim. Basically they prob need to spend it on something that won’t depreciate. Or invest in art? I’m not speaking from any experience or knowledge but I’m sure it can be done.

Toomuchtrouble4me · 05/10/2023 20:40

Toomuchfun · Today 19:05

I'm sure the accountants for the ultra rich would know how to do this but for middle/working class probably not. Get taxed making money and then taxed again spending it. If you save it you just get hit with 40% inheritance tax. If you think they will survive for 7 years they can gift money money now.
I mean someone who has worked and made £200,000 how could they possibly imagine getting help from the government after all the taxes they have paid

Why would the super rich want benefits?

Leela100 · 05/10/2023 20:40

What the actual f*

givemeasunnyday · 05/10/2023 20:56

Ozgirl75 · 04/10/2023 09:08

So they have £200k but still want taxpayers to fund their life? There must be more to this question as no one would be mad enough to think that someone with an inheritance like that should also be on benefits.

I get what you are saying, but in some countries it wouldn't affect benefits. Where I live benefit entitlement is assessed on your income, not your assets. So they would take into account any interest earned on the inherited amount, not the amount itself, although you wouldn't be able to claim an accomodation allowcance. Obviously that's not the way it works in the UK though.

Bluemink · 05/10/2023 21:07

I am glad there are a few sensible posters on here who understand the unfairness of a benefits system that decides if you have £16000 in Cash you are on your own regardless of what someones disabilities are. The issues here are relevant to many people with disabled children. The Ill informed or 'jealous' just see a lump sum of money without understanding the concept that £200K will not go far if a disabled person is unable to earn any money from work. In many cases if a disabled person inherits a family house they will have to sell it ending up with a lump Sum and a smaller house . The lump sum has to last them the rest of their lives or at least to Pension Age

I do not understand nor think it is fair that people for instance placed in the ESA Support Group should have their payments means tested. The payments in these cases should be for a persons disabilities, not just for a persons existence. So good luck to any Disabled Person who might inherit a house,which they will undoubtedly have to sell .

Thinkingofbankruptcy · 05/10/2023 21:11

anonibubble · 05/10/2023 18:05

No, my other daughter is a very no-nonsense but caring person. My oldest daughter has drug problems on top of everything else and needs a firm hand. And the problems with trusts is that if the beneficiary has a right to the income and the benefits people find out, it is the same as income. Also trusts are expensive to run.
This arose before when they found out there was a family trust and they pushed for us to make a distribution to her which would have reduced her benefits.

Show quote history

Not true. They’re very simple to run, and the beneficiary doesn’t have the “right” to the income, it’s at the trustees discretion.

Nobody can “push” a trustee to make a distribution.

dementedmummy · 05/10/2023 21:15

Yes it can be done as long as its done before the person dies. It protects the support and benefits the person is receiving but ensures that the trust pays for the stuff the benefits can't. If the will is altered after death to create such a trust, the beneficiary runs the risk that the dwp will class them as having divested themselves of assets (which is true) and reduce or take away the person's benefits. Seek legal advice on the individual circumstances would be my advice.

GrannyRose15 · 05/10/2023 21:37

Thewizardbinbag · 04/10/2023 09:14

You really think it is amoral for someone with life long conditions (disabled etc) who cannot work to be able to have a trust set up to ensure they are cared for without losing their only income?

In this country, we provide for disabled people who cannot work. But what we provide is the bare minimum and they live in poverty. Do you really want to take that away from someone who cannot work due to disability because they’ve been given some inheritance, which could actually improve their quality of life, pay for care, provide them a home suitable for their needs?

The nazis just killed disabled people. Would you prefer that? Just get rid of them so we don’t have to bother paying to keep them fed and housed and clothed. Maybe that would be more moral?

Some people cannot work due to conditions they cannot control. We do not abandon them. We support them, as any civilised society should. That is their only income; that’s all they can ever earn. They’ll never have security or savings or the money to enjoy life sometimes, not because they’re lazy but because they are not capable of earning money on their own. If their parents have managed to earn enough to leave them something; then why would you want to remove their only income rather than just letting them have a bit more comfort and a bit of security?

Show quote history

Because benefits are for people who need them. Not for people with large
sums of money in the bank.