Inheritance and state benefits

[CAPP0]

I suppose this is SP&L more than any other board, so:

You've been living on disability benefits all your adult life, and due to those disabilities are genuinely incapable of working. You receive housing benefit as well as income support and whatever else anyone else in your situation is allowed to claim.

Your parents die, and there is adequate provision for you in their wills for a modest home of your own to be purchased for you.

The conditions of the wills state that you don't have the option to take the inheritance as a cash lump sum. If the trustees/executors agree with you to go ahead with the purchase of a property on your behalf, do you:

(a) move into the house, stop receiving housing benefit, but continue to receive the other benefit income which you are currently eligible for, or

(b) do the DSS come after you and say "sell that house and live off the money, and come back to us when it's all gone" - or something similar?

Or is there a (c)?

Question posed to me yesterday which I don't know the answer to!

[Steviesam]

On the quiet buy a BTL and keep the benefits.

[CAPP0]

Steviesam said:

On the quiet buy a BTL and keep the benefits.

Actually trying to find out the correct position!

The person concerned wouldn't be capable of managing that even if they wanted to.

[anomiepete]

I would imagine that you continue to receive your benefits up to the point of completion. At that point Housing Benefit eligability would stop.

That may well be the only change unless there was also cash left. In that case means tested benefits may be affected but non means tested benefits would not.

[James_B]

I may be wrong, but I believe that the DWP would treat the claimant as still having the cash that was used to buy the house and so would stop all means-tested benefits.

[ellroy]

There are specialist trusts that can, with good legal advice, sort this type of issue out.

You need to go and get specialist help on this one, the internet is not the place.

A solicitor dealing with high end medical negligence type cases would generally have a good understanding of the sorts of issues you’re talking about.

[Peter911]

CAPP0 said:

I suppose this is SP&L more than any other board, so:

You've been living on disability benefits all your adult life, and due to those disabilities are genuinely incapable of working. You receive housing benefit as well as income support and whatever else anyone else in your situation is allowed to claim.

Your parents die, and there is adequate provision for you in their wills for a modest home of your own to be purchased for you.

The conditions of the wills state that you don't have the option to take the inheritance as a cash lump sum. If the trustees/executors agree with you to go ahead with the purchase of a property on your behalf, do you:

(a) move into the house, stop receiving housing benefit, but continue to receive the other benefit income which you are currently eligible for, or

(b) do the DSS come after you and say "sell that house and live off the money, and come back to us when it's all gone" - or something similar?

Or is there a (c)?

Question posed to me yesterday which I don't know the answer to!

(a)

I cannot see why there should be any issue with that, and any reason why you/they wouldnt choose this option.

[Oakey]

d) you buy a home with the approval of the executors, then sell it. They can't control what you do with it afterwards, unless the property will be in someone elses name?

However, now you have a ton of cash in the bank so you're no longer eligible for housing benefit.

I can't understand why you just wouldn't live in your own home rather than continue claiming housing benefit.

[Countdown]

Oakey said:

I can't understand why you just wouldn't live in your own home rather than continue claiming housing benefit.

Not everybody has the same morals as you (or I).

Playing Devil's advocate... what would the difference be between

(i) Somebody manipulating their inheritance in order to ensure they maximise the benefits they continue to receive ;

Or

(ii) Somebody making sure they give away their assets before they move into a care home to avoid having to self-fund?

[Echo66]

Peter911 said:

CAPP0 said:

I suppose this is SP&L more than any other board, so:

You've been living on disability benefits all your adult life, and due to those disabilities are genuinely incapable of working. You receive housing benefit as well as income support and whatever else anyone else in your situation is allowed to claim.

Your parents die, and there is adequate provision for you in their wills for a modest home of your own to be purchased for you.

The conditions of the wills state that you don't have the option to take the inheritance as a cash lump sum. If the trustees/executors agree with you to go ahead with the purchase of a property on your behalf, do you:

(a) move into the house, stop receiving housing benefit, but continue to receive the other benefit income which you are currently eligible for, or

(b) do the DSS come after you and say "sell that house and live off the money, and come back to us when it's all gone" - or something similar?

Or is there a (c)?

Question posed to me yesterday which I don't know the answer to!

(a)

I cannot see why there should be any issue with that, and any reason why you/they wouldnt choose this option.

Indeed. Had similar happen with my Grandmother a fair while ago.
House belonged to my grandfather, left to her with caveats reg her marrying again & not selling it as it was to be left to my mother & uncle.
My grandmother had several strokes the last of which left her incapacitated, LA couldn't look at the house as an asset as it was still in her husbands estate & the caveats on selling were there. They tried to grab it for sale to finance her car, grandparents solicitors were easily able to tell them to do one.

To me this seems a similar circumstance, if the money left to the person is solely for a house purchase & nothing else, then the LA couldn't very well go after it to force a sale - unless we're talking something way beyond what the person would reasonably need to live in.

[austinsmirk]

quite commonplace for me ( I work in housing), thus we house a lot of people with cash/capital and pending sales of houses.

you assume they have an income (i.e rental) from the property regardless- stick them on full rent etc and assume no benefits.

of course this can be re-evaluated when actually sold and receipts seen.

[konark]

The executors can buy a house for the claimant which he will then own and will stop claiming Housing Benefit, though still be eligible for other means-tested benefits. i.e the house you live in is disregarded as an asset.

In a subsequent sale, with the intention to buy another house, the money realised can be disregarded for 6 months whilst you complete the purchase.

The problem would be if the claimant ever needed to go into a care home, then the value of the house would be taken as an asset either by a forced sale or a charge on the title.

[CAPP0]

Countdown said:

Oakey said:

I can't understand why you just wouldn't live in your own home rather than continue claiming housing benefit.

Not everybody has the same morals as you (or I).

It's not a question of morals. This person doesn't have the proverbial pot to piss in, and neither do they have the mental capacity to carry out any form of business transaction on their own. For what it's worth, they don't have the mental ability to commit benefit fraud, they wouldn't understand what that is. They are capable of sleeping, breathing, washing and feeding themself.

The simple question is, when they become the beneficiary of their parents' will (which they will), can they be housed in a property purchased on their behalf (as opposed to their current arrangement which is a private property for which the LA pay Housing Benefit) without that affecting the remainder of their benefit, excluding Housing Benefit. I think someone has answered that further down anyway.

[CAPP0]

konark said:

The executors can buy a house for the claimant which he will then own and will stop claiming Housing Benefit, though still be eligible for other means-tested benefits. i.e the house you live in is disregarded as an asset.

In a subsequent sale, with the intention to buy another house, the money realised can be disregarded for 6 months whilst you complete the purchase.

The problem would be if the claimant ever needed to go into a care home, then the value of the house would be taken as an asset either by a forced sale or a charge on the title.

Thanks, makes perfect sense. It may well be that they either end up in a care home, or indeed sectioned, in the future, but it's the shot-medium term which we wanted to know about. Appreciated.