Inheriting a small amount that will take me over my means tested savings limit

kasi2024

Hi I am looking for any insights and guidance around inheritance for disabled people on means tested benefits .My mother is due to leave me 20 k in her will .I,am on ESA ,PIP HB If I receive this inheritance to my bank account it will exceed my benefits savings limits .I’ve been advised to go to a solicitor and set up a trust .I have a spinal cord injury ,and it’s all a bit much .What do you advise ? My concern is if I inform the benefits offices ,20 k would not last long paying rent in London and living expenses after 6 months I would have to go through the stress of re-applying for benefits.Is declaring it to the benefits dept the wisest thing ?And what are the details of setting up a trust .I’ve read the links on his website  they are great , just wanted to hear from other disabled people who have been through this .Thanks .God bless .Carl 

poppy123456

If your mum has passed away already and she didn’t set up a trust fund that was mentioned in the will then setting up a trust fund later would be treated as deprivation of capital. You will then be treated as still having those savings and your means tested benefits will still end.

You must report the changes once the money goes into your bank. 

If any part of your ESA is contributions based this will not be affected and will continue as normal. It’s only Income Related benefits that are affected. 

For council tax reduction some local Authorities have a maximum savings limit of £6,000 before entitlement ends. 

Unfortunately that’s the rules of means tested benefits and you can just hide the money. 

kasi2024

Hi poppy thanks for your comment ,but I was asking advice about setting up the trust while my mother is alive ,

poppy123456

You didn’t make that clear in your first post. Unfortunately I won’t be able to advise on that. 

I’d advise you to get some expert advice from an agency near you. 

kasi2024

Thanks Poppy I,ll do that .In my original post I stated that “my mother is due to leave me “ “which means she,s still alive ,I am aware of the means tested benefits laws ,but I’ve only just been told about ,”trusts for disabled people “ I was asking in my original post ,to hear from other disabled people who have been in this situation ,and how there parents went about setting up a trust .

surfygoose

My parents recently did that and set up the trust for me. They went to a solicitor. They asked at the local solicitor for the person who specialises in disabled people trust fund. The solicitor did do a video call with me. He said I didn’t have to talk to him but that he likes it if he gets to meet the person. It wasn’t scary. He only asked me about what things I like doing and what is important to me. I told him I like to always have a phone to stay in touch with my friends and that although some of the furniture and equipment I need is funded, I might like my own money to be spent to get something that looks nicer. He had already asked my parents those things as well, for instance like they’d told him I often think I might like to go on holiday but that it’s usually a waste of money because I get anxious and won’t go, so they told him I might be better having the money spent on day trips. Mum and dad said it was quite simple to set up because there is already a power of attorney in place for me so the people that have the power of attorney for me agreed to be trustees for the trust fund. So it was explained to me that it would work that after mum and dad are gone, if I needed something or wanted something, I should phone one of my trustees and say for example that I need new clothes and they would decide if that’s a wise thing to spend money on, then they would contact the solicitor and he would release the money to buy me what I asked for. I think it cost maybe £1500 or £2000 for my parents to set it up. I can’t remember. I know they said it was easier because they already had a Will in place and powers of attorney set up. Also the meeting they first had with the solicitor, just to learn about it all, he did for free.

poppy123456

Due to leave you inheritance could have also meant she had passed away, that’s why I said “if” 

surfygoose

I forgot to say, the solicitor did tell my parents that if they hadn’t have had anyone to name as trustees, or if my trustees had to back out or passed away before me, then the solicitors can put trustees in place themselves. It’s just that those trustees would not know the person so well. They would still do their best to act in the person’s best interests though. It’s just if you do have people you know and trust to be trustees then they know best what things you might want or need. Either way, the main solicitor keeps an eye to check that everything is being done properly. The solicitor mum and dad spoke to told them that he went in person and checked at a care home where someone had asked to buy a new chair for his bedroom, and he found that it had been put in the communal area and everyone was sitting in it. The solicitor told the home that was misuse of the trust money and the chair got moved in to the person’s room like they had wanted, so it does sound like good protection having the trust fund.

kasi2024

Hi Surfygoose ,Thanks for sharing your story .Very inspiring .I think you covered all the information I was concerned about .

kasi2024

Ok ,brillant surfygoose The details you,ve shared are great ,So am I understanding it correctly ,that for my mum to change the will ,to a disabled persons trust fund ,she would have to go to a solicitor and specify who the trustees are ,and what the specifics are of future expenses I.e money for new wheel chair ,holidays abroad ,(cloths ,phones,furniture ,health therapy’s ?

surfygoose

I think she doesn’t actually have to be specific about what the money should be spent on because you can ask your trustees for what you want when the time comes whenever you need to buy something if you know for yourself, or if you need more help then they can decide for themselves to get you what you need. I think the solicitor likes to hear the sorts of things you like spending money on and what’s important to you in life simply because it gives them an idea of who you are and helps them be able to protect you from potential abuse. It sounded when the solicitor talked to me himself like he just wanted to know what things make me happy so he’d have a better understanding of if the trustees were looking after my interests well. He said really if both trustees agree with what the person asks for then there shouldn’t be a problem getting it. I know he said that the two trustees needed to agree or else they would have to talk to the solicitor. He said it’s generally easy though, and for instance you could just phone your trustees and say you needed a new wheelchair or even something fun that makes quality of life better like a games console or needing to pay for you and a carer for holiday. It’s just about them safeguarding that the money is spent well and not squandered away and is definitely improving your quality of life and not being abused.

BTH

Wise advice from surfygoose, good idea to allocate trustees you 100% trust like family members, you can always sack them if your not happy.

kasi2024

Brilliant Surfygoose,thank you so much ,your explanations are brillant 

kasi2024

Yes BTH,Surfygoose,s advice has been down to earth and insightful ,now I am getting some understanding of trusts my next job is to Try and help my 90 year old mother to change the will to a trust 

BTH

That's a difficult one re ya mum, I heard that you have 52 weeks to set (DPT) disabled trust fund once you actually receive the cash. This will give you time to set it up with a solicitor. Inform u/c that the money is going into a trust fund keep them informed once its set up. I would take some free legal advice. Renaissance legal  has a good article re this topic.

kasi2024

Thanks BTH interesting ,I’ll have a look for that renaissance legal article .

poppy123456

BTH said:

That's a difficult one re ya mum, I heard that you have 52 weeks to set (DPT) disabled trust fund once you actually receive the cash.

That's not correct because this doesn't apply to inheritance. It only applies to compensation for personal injuries. 

As I advised in my first comment, the will needs to include details of the trust fund and the mother needs to do that before she passes away. 

JonnycJonny

I asked the very same question yesterday in this category - see 'Disabled Person's Trust' - & got two very useful comments in response.

Best wishes

surfygoose

Yes I agree, I haven’t ever heard of one being allowed to be set up after the person passes away, as the person leaving the money is the one that has to set it up. If the money is in trust then you would never have received the inheritance because it doesn’t go in to your bank account, it goes in to trust. It is never actually your money directly as you have to ask for permission from your trustees to have the things you want and they decide to approve it or not, of course always acting in your best interests. I haven’t heard of trusts that people can set up for themselves but I guess there may be different circumstances. I think if someone inherited and they didn’t have a trust set up in advance, but they were still needing that level of support with managing their finance then it would just remain as their inheritance in their own account but an attorney or deputy would be put in place to manage their bank account and make best interest decisions for them. Otherwise inheritance to a person, disabled or not, would just go to their own bank account and they would choose how to spend it by themselves.

BTH

I would always take professional legal advice to point you in the correct and legal direction. 

surfygoose

Absolutely and thankfully as it can only be set up through a solicitor, the solicitor has to give full information and advice about it before anyone commits to setting anything up.