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.

We - and more importantly OP - doesn’t know that.

You need a solicitor.

There could be many sources of money for your late partner's estate eg bank accounts, investments, death in service lump sum, death in service child pension, value of house if any ( a % after pay out to ex wife if held as tenants in common or the whole value if held as joint tenants), life assurance ( with or without a trust), proceeds of any previous pension schemes since 18 which may also pay out a lump sum and /or a pension for your daughter.

There could be quite a lot of research needed in addition to quite complicated administration and legal niceties. The appointment of trustees eg needs careful thought, solicitors charge whereas you or a relative may not but that does not necessarily mean the latter are better if ignorance means mistakes are made which might cost your daughter in the future.

It is not uncommon for parts of an estate to be forgotten (eg orphan assets) as any insurance company / investment house etc will tell you. Hopefully he will have been reasonably organised and have a list of assets either at home or with a solicitor etc.

My children received an inheritance from their grandmother about 12 years ago. It was a smaller amount, about 5k each. I was a single parent on tax credits at the time. The money came with no stipulations about how or when it could be spent.
I had it paid into bank accounts in their sole name, and then supervised their spending of it over the next few years. It was used for sensible things like school residential trips and new laptops, which I wouldn't have been able to afford.
I didn't declare the money to the TC, I didn't see a reason to. It was theirs not mine.

@moneyisnotfunny

This is how it would be handled in the US, but obvs may not apply in the UK. If I were you I'd get legal advice.

Situation: Child receives inheritance/cash gift, parent is on 'benefits' (aka 'Welfare' in the US)

The bequest would be put in a trust in the child's name with a third party trustee (usually a lawyer, banker, or trusted relative/friend). This is to show that the child is the 'owner' of the money and the parent has no direct access to it. The trustee disburses funds for the child's needs directly to the provider (school fees, medical needs, bills for clothing etc). Funds as above disbursed to the parent directly 'for the benefit of the child' must be accounted for with a paper trail. In some States a pro rata share of household expenses can be sent to the 'householder' to cover the child's 'food and shelter' and is excluded as income to the parent. In other States, it is counted as income and deducted in full or in part from the parents Welfare benefit. In the US, each state makes its own rules.

One thing, since there is no actual will, unless this actually goes through the courts as an 'Estate Intestate', this might not legally be classed as an inheritance. So if, for instance, that money was in a joint account with another person (ie the deceased's spouse or parent) the 'ownership' would belong to the other account holder and the money would be considered a 'gift', not an inheritance.

Again, I know the UK benefits and legal systems may operate under different rules, but I've found them similar in many instances. This may just give you a 'guideline' to ask about when you see a solicitor.

Edited to add; the above usually applies to LARGE sums of money, not to small bequests.

@moneyisnotfunny this is a difficult situation and I can understand your confusion as most of us don’t have knowledge of inheritance laws until we are grieving.

My suggestions are practical:

• This link to the gmt website sets out the rules when there is no will https://www.gov.uk/inherits-someone-dies-without-will
• This link is to the Probate Registry website and the form you can complete to be notified when probate is granted https://www.gov.uk/government/publications/find-a-will-or-probate-document-form-pa1s

I suggest you apply to be notified that probate has been granted. When you get this then you need to act asap as there are time limits.

The grant of probate will state who the administrator is and, if used, the name and address of the solicitors. At this stage write to the administrator/ solicitor and ask about your DDs inheritance.

The grant of probate will also set out the value of the estate so you should have a rough idea of your DDs share. This is not maintenance but must be kept for her to inherit at 18.

It can take many months, a year + to get the grant of probate so don’t worry if it seems to take a long time.

I am not an expert but your DD maybe entitled to some of her Dad’s pension as she is under 18. Pension funds may look at who needs the money.

At this stage I would keep in touch with the family and keep it friendly as when they start to work it through they may realise your DD is entitled to 1/3rd of the estate.

Your daughter is entitled to 1/3 of the state as their is no will (apart from pension & life insurance that goes to his middle child as he stated before his death)

The ex wife will get half of the house if her name was on the deeds

It doesnt matter what the family say
This will be held in trust till your daughter is 18
You can not access it
Its very simple

yeah, has anyone ever actually been helped by the cab? Any time I or anyone I know has tried to use them you’re either turned away, scoffed at, get someone who just looks blankly at you or they just can’t help 🤷‍♀️

As I understand it, in England, even if the finances were not settled between the deceased and his XW at the time of the divorce, her remarriage would prevent her from making a financial claim at this stage on the basis of that marriage. So the ownership of the house the deceased lived in is pretty key. It would be unusual for a couple who have been divorced for 20 years to still own a house together as joint tenants, but not impossible.

OP, I think you have three sensible steps here:

1. apply to be notified of when probate is granted
2. check the land registry for your ex's property to understand ownership
3. consult the legal helpline, if any, provided by your house insurance.

That’s exactly what I’m saying, the will should have stated this but there was no will, so it’s irrelevant.

No one is inferring, or trying to infer, that you re scrounging from the state! But this money has been left to your DD and unless there is a will - there isn't, and unless he stated please use this money in lieu of the maintenance as I can't pay as I'm dead - clearly he didn't, then this money is not for you to use at all. It's hers.

@moneyisnotfunny Could you put the £30K into Premium Bonds in your DDs name. The current interest rates mean that the odds of winning are good, especially with that meaningful amount invested, so with any luck your DDs investment will grow. It's money you weren't expecting but the last thing you want at this time is stress, complexity and uncertainty. PBs are a very safe and stable investment and if ever you need the money you can always cash in any amount of the investment.

It sounds lovely his other kids and ex wife want your d to have this money but I'd be cynical that it's not a pay off as they know she's entitled to a lot more..

And under tax credits that was allowed.

Under UC if you hold money for your kids you really need to declare it and then fight if they say it's yours. It shouldn't affect your claim but that's their decision not yours.

So much speculation on this thread but @Andwegoroundagain has good advice. You will then have a very clear idea of the size of the estate and make a decision on how to proceed.
Good luck @moneyisnotfunny and even though some 'advice' may be suspect on here there is also some excellent advice too.
Hugs to you and your daughter who no doubt are struggling with your recent loss.

Surely you ask the people who want to give your DD this money, to set it up as a trust, so its kept for her until X age, or possibly X amount is paid into her building society or kiddy bank account every month/quarter/year...

That part isn't particularly complicated.

Seeking to find if she is in fact entitled to more of his estate would be.

THE POSTER WILL NOT GET ANYTHING

The daughter will get 1/3 of the state apart from anything that has been left to a specific person like the pension , life insurance and
half the house (that the ex wife gets)

NOONE will be able to access it.
The child can access it at 18

Its actually amazing that the family think they can dictate who gets what and how its paid
It does not work like that at all

Told by whom? Written in will? Or verbal wishes by late father? If verbal wishes, this means nothing.

What does the will actually say? If left to daughter, without any stipulation as to what the money is for, then op can’t touch it as it’s not her money.

If the house remained held as joint tenants she will get all of it.

If they're tenants in common then the percentage of their respective shares is likely to be recorded.

I actually think you're looking at short term financial pressuresfir yourself and not considering long term for your daughter........IF she can claim a third of the estate why wouldnt you facilitate that for her future?
Sounds like they are trying to buy you off tbh with promise of immediate cash.

Do you have a mortgage? Could you pay off the equivalent amount off the mortgage and then reduce your monthly payments by £300? This shouldn’t affect your benefits then going forward

@moneyisnotfunny

Ah I see, if he isn’t married then yes the kids inherit everything in equal shares. This is now it works:

https://www.citizensadvice.org.uk/family/death-and-wills/who-can-inherit-if-there-is-no-will-the-rules-of-intestacy/

Here’s some info on setting up a trust for your daughter

https://www.evelyn.com/insights-and-events/insights/trusts-for-children-explained

It does sound that there may be some attempt to do your daughter out of her inheritance.

I suspect this is partly because your ex and his ex wife owned the houses jointly, and she’s worried your daughter will force a sale.

Given you know some money is coming to your daughter, you need to go and see a good local solicitor (look up the reviews) they will tell you what the fees will be to get details of the ex’s estate and set up the trust - they’ll defer the fee till the estate is settled

this is how it works:

https://www.citizensadvice.org.uk/family/death-and-wills/dealing-with-the-financial-affairs-of-someone-who-has-died/

You can decide with the solicitor what you want to do about the house he jointly owned with the ex-wife - if she can’t afford to buy your daughter out, you can force a sale fairly immediately, or you could agree a couple of years grace on the grounds your daughter will not need all the estate until she turns 18.

Get quotes from 3 solicitors - it won’t be astronomical as it’s all quite straightforward.

Obviously you should approach this neutrally, but it does seem clear the other kids are planning to take your daughters money, so do act swiftly via the solicitor.

OP hasn’t said that anywhere…

Notwithstanding the fact that it would be highly irregular for a divorced couple to still own property two decades after they got divorced.

It must be so frustrating for OPs when people post things that have been made up.

It’s the OP’s daughter’s money not hers. Can you not read??

Sorry, just read there’s no will. So as others have said, money will be divided according to law.

@PoopedAndScooped that’s wrong. You don’t know that the pension will go to middle child. If it’s a DB pension nomination, the trustees of the pension scheme have all the power they need to vary from that. It’s just an expression of wish, nothing legally binding on the trustees. They are very unlikely not to award something to an 8yo child who was (as evidenced by the active maintenance) a financial dependent.