Page 10 | Inheritance for child when the parent is on benefits

moneyisnotfunny · 2024-08-31T13:11:44+00:00

Nc and some details changed for this. My young daughter is going to inherit around £30K from her late father once the estate is sorted out through probate. I am a single parent carer on benefits and am concerned about how to handle this situation. The money will be very much my daughter's and I have been told that it is to cover her maintenance up to when she reaches adulthood. Because it is maintenance, there needs to be a way of releasing the maintenance amount per month to me for her every day living expenses. If the full amount went into my account then my benefits would stop and the money would run out long before Dd hits 18 and we would because off as a family. I hope that makes sense. How can I keep her money safe and in her name but released monthly to help for her day to day things? Is this possible? It's around £300 a month that she got and this is the rate it would continue at afaik. I will be asking for it to be paid into an account in her name. Multiple Junior ISAs? Premium Bonds? She is 8 and any account will have to be overseen by me as her only parent/guardian. TIA.

Andwegoroundagain · 31/08/2024 20:51

moneyisnotfunny · 31/08/2024 20:47

This makes more sense in terms of the family wanting to ensure Dd has something because the house won't come under intestacy rules.

Sounds like it and sounds like they are trying to be decent, which is lovely. Hence my advice either way speak to the solicitor handling the estate. They can explain all of this to you without you seeming money grabbing or whatever. They can just explain how rhe estate is being divided

TimbuktuTimbuktu · 31/08/2024 20:54

So probably the most important thing is that you make sure that your daughter gets her share of his pension entitlement.

Most pensions have provisions to make a claim for dependent children even if they haven't been named.

If it's a public sector employer it could be very significant and my understanding is that it can be used to support living expenses whilst they are still a child but you'd need to check.

Another2Cats · 31/08/2024 20:59

anonhop · 31/08/2024 16:29

It's not too complex. A lot of people are commenting based on myths/ what they think should be fair & not the actual law.

As there was no will, the estate HAS to follow the intestacy rules:

No spouse = the estate is split evenly between the children. Therefore, your DD gets 1/3 of the estate and the other 2 children get a third each. Your DD is a minor and therefore cannot agree to a deed of variation involving her share, so this is not an option.

The other 2 children (who I assume are adults) can do what they want with their own share, including giving you money every month to replace maintenance. However, this must come from their share & not DD's.

DD's share must be held in trust until she is 18, when it must be handed over to her in full. You may not touch this money/ use for maintenance. This also must be 1/3 of the estate (assets held in his name - any outstanding debts, liabilities) and not just £30k.

As you will not be receiving any money maintenance or otherwise, your UC will not be affected. If the other family members wish to send you £300 per month from their own share as a gesture of kindness, I'm not sure how UC views regular gifts.

Hope that makes sense, but speak to a solicitor over Mumsnet. A lot of people have no idea what they're talking about!!!!!

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"You may not touch this money/ use for maintenance."

Just a small point, but it can be used for the benefit or maintenance of the child. The trustee can apply as much money as they see fit for this purpose.

Until she is 16 any money from the trust will be given to the parent to use for the benefit of the child.

Another2Cats · 31/08/2024 21:06

HollyKnight · 31/08/2024 16:40

Just backing up what many others have said - your daughter should receive a third of his estate after funeral expenses and debts are paid.

Whether the house makes up part of the estate depends on how it was owned.
If he and his ex owned it as "joint tenants", it means they both owned it completely and therefore she automatically owns the whole house now. It will not be part of his estate.
If they were "tenants in common", it means they own different shares of the house each and therefore his share becomes part of his estate.

As for your daughter, you cannot use her inheritance for maintenance. It is her money. It should be held for her until she is 18 years old.

"As for your daughter, you cannot use her inheritance for maintenance. It is her money. It should be held for her until she is 18 years old."

I'm sorry, but HMRC disagree with you.

TSEM6121 - Legal background to trusts & estates: early payment of a minor's share under the rules of intestacy

Under a statutory trust each child of the deceased receives a share of assets on reaching the age of majority (TSEM6125), or on marriage if that is earlier.

Trustees can provide for the maintenance and education of a minor beneficiary. If there is not sufficient income, they can make advancement from capital.

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem6121

TSEM6125 - Legal background to trusts & estates: no valid will - age of majority - HMRC internal manual - GOV.UK

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem6125

Another2Cats · 31/08/2024 21:22

Dotto · 31/08/2024 18:02

Having read your replies more thoroughly now OP, you need to make it clear to whoever is named on the Letters of Administration (like equivalent of an executor for those who die intestate - without a will) that as your child's legal guardian, you would like to receive a copy of the estate accounts of assets and liabilities, and how these are being split. If your child isn't receiving their full 3rd of her father's assets you can ask the probate registry to intervene. You do not need your own solicitor, but I would advise asserting yourself now, as it would be very easy for your daughter to be treated unfairly / fobbed off..

@moneyisnotfunny Things have moved on from your OP with the extra information that you have given us. Dotto very clearly explains in a simple way what you need to do now.

I think this is a very good point:

"You do not need your own solicitor, but I would advise asserting yourself now, as it would be very easy for your daughter to be treated unfairly / fobbed off."

JohnofWessex · 31/08/2024 21:24

Your ex and his wife may well have bought the house as joint tenants.

BUT if they divorced the financial settlement would have divided the proceeds of the sale

so its the financial settlement you need not the Land Registry

Original poster

moneyisnotfunny · 31/08/2024 21:29

@JohnofWessex the finances were never finalised. I'm not sure how that was allowed but it was and the house remained in joint ownership with each paying 50% of the monthly payments until the mortgage was fully paid about 6 months ago.

OP posts:

JohnofWessex · 31/08/2024 21:33

Hum, professional advice needed then

Testina · 31/08/2024 21:40

JohnofWessex · 31/08/2024 21:24

Your ex and his wife may well have bought the house as joint tenants.

BUT if they divorced the financial settlement would have divided the proceeds of the sale

so its the financial settlement you need not the Land Registry

Do you have any experience of divorce?

That simply isn’t what happens in very many divorces. Formal offset balance of assets, Mesher orders, informal agreements…

Testina · 31/08/2024 21:41

moneyisnotfunny · 31/08/2024 21:29

@JohnofWessex the finances were never finalised. I'm not sure how that was allowed but it was and the house remained in joint ownership with each paying 50% of the monthly payments until the mortgage was fully paid about 6 months ago.

It was allowed because there is absolutely no requirement to submit a Consent Order to obtain a Decree Absolute. (in England, I can’t speak for other jurisdictions)

HollyKnight · 31/08/2024 21:45

Another2Cats · 31/08/2024 21:06

"As for your daughter, you cannot use her inheritance for maintenance. It is her money. It should be held for her until she is 18 years old."

I'm sorry, but HMRC disagree with you.

TSEM6121 - Legal background to trusts & estates: early payment of a minor's share under the rules of intestacy

Under a statutory trust each child of the deceased receives a share of assets on reaching the age of majority (TSEM6125), or on marriage if that is earlier.

Trustees can provide for the maintenance and education of a minor beneficiary. If there is not sufficient income, they can make advancement from capital.

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem6121

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The money is not in a statutory trust nor will it be. The money should be in a bare trust. The OP can ask the trustees for money from the Trust, but there are certain rules that must be followed. "Maintenance and education" does not mean day-to-day costs. It's for specific things like school fees. She can't just use the child's money like child maintenance.

Avidreader12 · 31/08/2024 21:54

Why do people assume money is in trust there is no will creating such an arrangement please OP don’t take this thread at face value there is so
much incorrect advice on here

Another2Cats · 31/08/2024 21:55

HollyKnight · 31/08/2024 21:45

The money is not in a statutory trust nor will it be. The money should be in a bare trust. The OP can ask the trustees for money from the Trust, but there are certain rules that must be followed. "Maintenance and education" does not mean day-to-day costs. It's for specific things like school fees. She can't just use the child's money like child maintenance.

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Are you perhaps confusing trusts set up under a will with those set up under intestacy? There is a difference.

In England & Wales, when minor children benefit under intestacy then a statutory trust arises.

A bare trust is created if an outright gift is made to a child in a will.

Another2Cats · 31/08/2024 21:57

Avidreader12 · 31/08/2024 21:54

Why do people assume money is in trust there is no will creating such an arrangement please OP don’t take this thread at face value there is so
much incorrect advice on here

The reason is that this is what happens when a person dies intestate and a beneficiary is a minor.

BeachRide · 31/08/2024 21:59

MontyDonsBlueScarf · 31/08/2024 19:29

You may ultimately need a solicitor, but for now, you have so few facts that a solicitor is unlikely to be able to help. This is what I would do now:
1 Find out who is handling the estate.
1a If it's a solicitor, write to them and tell them about your daughter. The solicitor will let you know what your daughter is entitled to.
1b If it's the two other children or some other unqualified person acting for them, register your daughter's interest with the Probate Registry as others have suggested. They will eventually let you know the size of the estate.
2 When you know how much is involved, start thinking about whether you need legal advice on how it should be paid.
3 In the meantime contact the pension trustees and let them know about your daughter. The next step will depend on what they say.

I would not be assuming any ill intent on the part of his family. No-one thinks straight when they are bereaved. Still less do they think up cunning and complex plans overnight. The indication is that they are trying to do what they see as the right thing. I would work on that assumption till it's disproved. If this was straightforward there wouldn't be so much conflicting advice on here.

I have experience of a cunning and complex plan concocted by the family of a deceased person a week after his unexpected death. Luckily it failed and my friend inherited the entire estate in the end, as was his legal right.

Avidreader12 · 31/08/2024 22:06

Another2Cats · 31/08/2024 21:57

The reason is that this is what happens when a person dies intestate and a beneficiary is a minor.

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i would like to see to see the legal evidence you are making this assertion with. The estate hasn’t been through probate we do not know even if there is money owing to beneficiaries your making huge assumptions.

Original poster

moneyisnotfunny · 31/08/2024 22:08

The only assets to my knowledge are the house and the pension. Possibly life

OP posts:

Original poster

moneyisnotfunny · 31/08/2024 22:12

Sorry the cat nudged my hand.
The only known assets are the house and pension with possibly a life insurance policy although considering his poor health I'm not sure he'd have had life insurance. There is no will. No provision made for any of his 3 dc. The house appears to belong to the exW. He had debts that need to be paid off.

The only thing I can see here that would possibly go to Dd is a child pension because I don't think there's anything to divide up according to interstacy rules.

OP posts:

HollyKnight · 31/08/2024 22:18

Another2Cats · 31/08/2024 21:55

Are you perhaps confusing trusts set up under a will with those set up under intestacy? There is a difference.

In England & Wales, when minor children benefit under intestacy then a statutory trust arises.

A bare trust is created if an outright gift is made to a child in a will.

Show quote history

Regardless, she can't use the money for day-to-day costs. That money is legally and morally the child's now, not her dead father's. The child isn't responsible for taking over her father's previous maintenance responsibility. She isn't responsible for paying the bills or buying her own food and clothes.

HollyKnight · 31/08/2024 22:25

moneyisnotfunny · 31/08/2024 22:12

Sorry the cat nudged my hand.
The only known assets are the house and pension with possibly a life insurance policy although considering his poor health I'm not sure he'd have had life insurance. There is no will. No provision made for any of his 3 dc. The house appears to belong to the exW. He had debts that need to be paid off.

The only thing I can see here that would possibly go to Dd is a child pension because I don't think there's anything to divide up according to interstacy rules.

If that's the case, your daughter isn't inheriting £30k. Any money they give you will affect your UC. If you want to avoid that, they will need to put it into a trust or into a savings account in your daughter's name. It can not be in your bank account.

Silvers11 · 31/08/2024 22:31

neilyoungismyhero · 31/08/2024 17:40

She's already said there is no Will. His relatives are responsible for sorting out his estate. They want to continue paying the maintenance to his child at the rate he was paying. This is the issue she has. Got it?

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Yes I have 'got it'. Before you decided to be so rude, maybe you should have checked the time I posted my question and the time the OP said there was no Will?

That post was made by OP while I was typing mine, so it didn't show up on my screen until after I posted mine. Got it ?

Original poster

moneyisnotfunny · 31/08/2024 22:33

I will ask for any money they want to give to be put in trust
I'm not sure how the pension for dependent children is paid.

OP posts:

theduchessofspork · 31/08/2024 22:37

moneyisnotfunny · 31/08/2024 22:12

Sorry the cat nudged my hand.
The only known assets are the house and pension with possibly a life insurance policy although considering his poor health I'm not sure he'd have had life insurance. There is no will. No provision made for any of his 3 dc. The house appears to belong to the exW. He had debts that need to be paid off.

The only thing I can see here that would possibly go to Dd is a child pension because I don't think there's anything to divide up according to interstacy rules.

@moneyisnotfunny

I don’t think you can assume the ex owns the whole house - why are you assuming that?!

Original poster

moneyisnotfunny · 31/08/2024 22:43

@theduchessofspork the house is jointly owned. There was no financial settlement on divorce. There is no mortgage in the house.

OP posts:

Original poster

moneyisnotfunny · 31/08/2024 23:08

My head is spinning after all these replies. I didn't expect so many responses and feel more confused because it's gone from being about a potential 'inheritance' of £30K to interstate rules and child pensions. Thank you for taking the time to respond. I am going to see what I can find out next week once I have the time and privacy to make phone calls when Dd is back at school. I don't expect her to receive a single penny but if there is anything that can be held in trust for her then that will be the best unwitting gift her absent father can give her. I'm sure he resented every penny he gave me in maintenance over the years. He'd be turning in his grave knowing she might get more.

OP posts: