Inheritance for child when the parent is on benefits

[moneyisnotfunny]

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.

Now I'm cross. This grief stuff is weird but if he'd been a decent father and thought about his children I wouldn't be needing to do all this thinking now he's dead. I've got a lot of anger towards him in general but a lot of sadness too. It's a right mess he's left behind.

@moneyisnotfunny I don’t think you need to set up a trust. What you need are saving options that pay a good interest rate.

Things to bear in mind:

• no more than £85k in one bank/building society. NS & I is the only exception.
• longer term savings products make it easier to manage e.g. 3 or 5 year terms.
• MoneySavingExpert has a section on best rates for saving accounts.

Use trusted websites like MSE and Money Helper the Government Organisation https://www.moneyhelper.org.uk/en

As well as an ISA, you could also set up a pension; the government will top it up, so its very tax efficient. If you, say, put in £2880, they top up to £3600 (not exact sum; just off top of my head). My son has both a Stocks and Shares ISA, and a SIPP pension.

You could also invest in NS&I Growth Bonds and Index linked certificates.

If she gets a lump sum you can probably just open an account in her name and you would be the signatory for it until she turns 18. The simplest option would be a child savings account with a bank or building society. You probably don't need anything more complicated than this.

As the signatory you can withdraw money for her benefit before she turns 18. When she turns 18 she can access the money and you cannot.

I'd be sure to talk to her about the best ways to use this money before she turns 18. Things that will help her long-term, such as a house deposit, or to support a degree or apprenticeship which will help her career.

UC have finally responded and said that the money would not be classed as mine as long as there is a letter stating the money is for Dd and what that money is for ie dependents pension which of course there would be.

Great news !

Great News @moneyisnotfunny Such a relief for you

It will be great news if Dd actually gets anything. It's looking like nothing of the estate which is just the house will go to her or her eldest sibling but to the ex wife who will give it to her Dd. The death benefit has already gone to another family member who intends to g

Posted too soon. Intends to give most of it to the middle Dd. The eldest and youngest are being well and truly left out.

If the death in service benefits have already gone to another family member then I'm very surprised to hear that. I'd write an ask the trustees of the pension scheme why this was paid out ignoring the existence of your DD who is a minor and dependent on the money from her father. That seems a very strange decision

Can I do that? They should have received my letter in the last few days informing them of DD's existence and that of her oldest sibling. Can anything be done now that it's been paid?

it all sounds a complete mess. Nothing should be paid out without all potential beneficiaries being identified.

Normally they have a duty to pay things correctly and so should correct any errors . I don't know the scheme details and I don't know what the statement of wishes said in terms of beneficiaries. But if they decided to not follow the wishes but did not do the proper analysis or research on the family situation then I think there are grounds for complaint.

You can complain to the Pensions Ombudsman (I'm assuming Death in service is covered by the pension scheme in this instance). Normally you'd have to follow their complaints process first.
I'd write a letter saying that you understand the death in service benefits have been paid and you would like to understand why the only dependent child was not catered for and you would like this formally investigated as a complaint.

No will, he only died in August, but money has already been distributed?!

Someone's pulling a fast one...

I seriously doubt that anyone has been given a grant of representation in that short a timescale!

The in service death benefit is paid quickly. The information online says so. The dependents pension can take 12 weeks though!

Someone, OP, is relying upon you being a doormat and a walkover.

Your child, as an under age dependent, has to be provided for.

There's still the dependents pension. I've applied for that for Dd. That's separate to the death benefit and can only go to Dd because the other dc are too old.

It's insane how quickly the in service part is paid.

It is normally paid quickly so dependents are not left without money whilst dealing with bereavement.

The death benefit has gone to a family member who is in no way dependent but I appreciate that normally this would go to a spouse or child.

The DiS may be paid quickly but the trustees have a duty to make sure they understand the picture before paying it, due diligence. If they did not ask the simple question "how many children did he have" then they have failed their duty and they have an obligation to remedy this.
You absolutely should complain

I'm on it. Thank you. It looks like this will destroy the relationship between the children.

Well if the older adult child accepted the money and never mentioned the existence of your DD, then shame on them. I'd say then they are not the sort of person you want your DD having a relationship with.

It's not the older child, it's another relative who was nominated to receive the death benefit and has already received it. His plan is to give most of it to the middle daughter and keep some for himself. I doubt he mentioned the existence of the two other children. Dd and her sibling are now dependent on the good will and morals of the middle Dd and her mother. I don't have much faith to be honest.