Legal Advice on inheritence and claiming Income support

[Fat Audi 80]

Hi Guys,

I would appreciate some advice on the following problem if possible please?

A friends' dad has recently inherited about £40k and has had a deed of deviation written by the will's solicitors to pay £20k to each of his daughters instead. The income support agency have been informed of this, but have immediately stopped his housing benefit and job seekers allowance (soon to be pension - he is 64).

Does anyone know if he is legally allowed to give this money away AND still claim benefit(s). Have the Father and Daughters done anything wrong.

Any BTDT's or legal beagles know what the score is?

Cheers,

Steve

[themaskedavenger]

You are allowed to re-direct sums not sure what the limits are.

My guess is the income support and stuff they will always err on the side of what keeps them most money.

[egomeister]

If a deed of variation has been written then surely the money is passed straight to the daughters from the estate and should have no effect on their dads financial situation?

[Fat Audi 80]

egomeister said:

If a deed of variation has been written then surely the money is passed straight to the daughters from the estate and should have no effect on their dads financial situation?

Well that's what I was thinking. He has never touched the money and has never legally owned it so I *would think* that should be that.

However I think the income support agency or whatever their current title is, have stopped payments as they don't actually know where they stand, and that is the problem.

I just wondered if anyone else had encountered this or if there was someone that could give me some "free" advice

Cheers,

Steve.

[Plotloss]

Whats probably happened is that they have details of the £40K going to him, which is above the £15K capital that means everything stops but they dont have the details of the fact that hes not recieving that cash.

Just a guess.

[dp1]

My knowledge of this is not particularly current but as I remember it's along the lines of:- Inheritance takes you over the capital limit and as it was your inheritance it's deemed to be yours. The Department then considers that you have disposed of said money so until it is established what has been done and why, it is treated as still yours. The facts then have to go to a 'Decision Maker' who will then look at the the disposal of the money. In Departmental jargon this is known as deprivation of capital.

The rational behind this is - man inherits £40k goes on holiday, buys fancy car, smart clothes, plasma telly etc - then because it's all gone continues to claim. Certain expenses are allowable - paying off mortgage, some types of home improvement (double glazing = yes, hot tub = no)

All this info is taken into account and if the disposal is ok, benefit re-instated, if not no.

This is enormously simplified, but the decision will come down to one person in an office somewhere. If the decision goes the wrong way he can appeal right up to the Seceratry of State but it's long winded.

Hope this helps - I'll see if I can find a link to the legislation on-line.

[egomeister]

I would have thought that since the money was never technically his (ie released from the estate to him) that they would have no basis for stopping payments to him (bit harsh to stop it for a future income!)

Surely this could be resolved by sending them a copy of the deed of variation showing that the money will now not be released from the estate to him, but to the daughters?

[alfaman]

Fat Audi 80 said:

egomeister said: If a deed of variation has been written then surely the money is passed straight to the daughters from the estate and should have no effect on their dads financial situation? Well that's what I was thinking. He has never touched the money and has never legally owned it so I *would think* that should be that. However I think the income support agency or whatever their current title is, have stopped payments as they don't actually know where they stand, and that is the problem. I just wondered if anyone else had encountered this or if there was someone that could give me some "free" advice Cheers, Steve.

You are basically not allowed to dispose of Capital to reduce your savings below the £15k threshhold in order to claim benefit .... if they (DWP ) deem the purpose of you varying the inheritance was to enable you to continue to claim means tested dole .... then that (quite rightly ) would not be allowed.

[dp1]

Try looking at this

www.dwp.gov.uk/publications/dwp/dmg/

Can't do fancy links - sorry.

You want volume 5, chapter 29, capital.

Hope this helps.

[Fat Audi 80]

Brilliant! thanks.

Yes, I can understand the "non deprivations part" so that does make sense, and this area is the part that my friends are trying to get their heads around.

Cheers,

Steve