My dad wants to open a bank account in my name?

[cheekymonk]

Hi all,
My Dad has recently been made redundant and seems likely to receive between 10 to 20k he is not sure yet. He has separated from my Mum and lives with his own Mum. He wants to open a bank account in my name for all the money to go into, mainly so that the money is for my sister, mine and my ds's and his own use and noone else's (he feels both my Mum his ex and his Mum are expecting a payout and he currently pays the mortgage on the house mum is living in so feels that this is enough). He thinks it will be easier for us once he dies ,
He is currently making a claim for ESA as he has been signed off for 3 months too.

Is this all above board? My Nan did it for my sister and I and there were no problems but Dad has asked me to look into it to check it is all kosher so to speak!

The amount of savings he has could affect his claim for benefits. Not sure if it's over £8k or £16k?

I'd go to the CAB with your Dad and ask them exactly what he can do that is legal and what would not be.

Thanks cargirl. The ESA he is going for (was incapacity benefit) is based on his national contributions so hopefully that side of things is ok. Yes CAB are a good option.

I just think it's good to make sure it's all done well and to everyones benefit. For example if it's all in your name then you would be liable to pay income tax on it (if you earn enough!)

It be worth him splitting it 4 ways now between himself and the 3 of you.

Dangerous move cheekymonk. Incapacity Benefit (as was) is not means tested however it can be a 'gateway' benefit to other benefits he may need which are means-tested.

What about Council Tax benefit, Housing benefit, NHS Prescription Exemptions etc - he may need to apply for these and they are all means tested, , so he would have to declare the redundancy pay or lie.

Plus the efect 'his' money would have on your eeligibility for anything you may have to claim for in the future.

If the only reason he's doing it is so he can hide it from his mother and ex then he's better to stand up to them and tell them that it's money he will need for living expenses in the future - not a windfal.

If he wants to shelter it legitimately then set up a discretionary trust with you and your sisters as trustees.

Thanks wetaugust- some useful advice.

well, technically it is his money to give away and once he has given it away then that is that. however, i starts withdrawing money as a source of income then he would need to declare that on an as and when basis to the benefits agencies involved.

there is a limit on how much money you can be given without declaring it i believe to the tax man and there may be inheritance tax implications if he were to pass away within 8 years (i think)

As long as he doesnt intend to claim any means tested benefits, he can gift the money. However, if he needs to claim benefits then they will still treat him as having the capital even if he has gifted it under the deprevation of capital rule (they are very strict on this rule)

He is allowed to have under £6k in savings, between £6k and £16k benefits will be reduced, over £16k he wont qualify.

Thanks all xx