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Inheritance and Discretionary Trust

lola96

My daughter is due a direct inheritance which was left by her late grandmother . She is on ESA IR and PIP . I am aware she will lose ESA. If this inheritance was placed into a discretionary trust for her future, would DWP see this as DOA .. I’m trying to do what’s best for her.. my other thought was to put the money towards a more suitable property. I don’t want to do the wrong thing. I have spoken to a lawyer in regards to a discretionary trust but she’s very much ‘ I need to make you aware that DWP may see this as DOA’ but she feels she has a good argument . I feel it’s left up to me to make the decision but don’t want to do something that’s not legally right and give me more hassle. has anyone else had to deal with something similar.. I’m finding this very difficult to deal with and I’m on my own .. I don’t have anyone to talk to about it. I’d appreciate some thoughts ..

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Comments

Kimi87

I see you've received previous advice about using the inheritance to buy a property.

Discretionary trusts formed pre death (as part of a will) are not seen as DOA.

In this case a trust is being considered post death, as a way of retaining entitlement to ESA, which is deliberate deprivation of assets.

So post death is too late in my opinion.

lola96

Thanks for your comment. My concern is post death is too late but I do wonder why a lawyer is sure she can win an argument with DWP in regards to the trust. I am trying to do what is best for my daughter hence the reason I thought putting money towards more suitable property was beneficial for her long term. A friend mentioned a discretionary trust so I thought I’d check it out. As I said I don’t want to go down an avenue which will get me into trouble. I also worry in case buying property will be classed as DOA. I feel very anxious about this whole situation as it’s brought a lot of hassle.

poppy123456

Putting the inheritance into a trust now will highly likely been treated as DoC and your daughter will still be treated as having that money. It would have needed to be set up prior to the death of her grandmother.

Even if she uses it to buy a property as soon as the money goes into her bank she will need to report the changes because there will be no disregard while she finds a property to buy. Therefore her ESA would still end.

Her PIP won't be affected.

JonnycJonny

As I understand it, a Disabled Person's Trust set up pre death may have enabled your daughter to retain her means tested benefits ( money would not have been paid directly into her bank account but spent by the trustees on her disability needs ) - unfortunately, any trust set up post death would most likely be seen as deprecation of capital by the DWP.

lola96

Thanks Poppy and Jonny for your advice. I shan’t go down the road of a DT then but I do think buying a more suitable house is required. Something with little garden and no stairs. It’s just worrying as to whether doing that would be classed as DOA in the eyes of DWP. I just don’t know what you can and can’t do and what is deemed acceptable.

poppy123456

Buying a more suitable property will unlikely be treated as DoC. However, as I advised capital will not be disregarded in the meantime.

lola96

My daughter hasn’t yet received the inheritance but I will inform DWP as soon as she gets the money. Am I best to email the DWP rather than speak to someone on the phone … to inform them of change in circumstances.

I fear anything coming back on me and I want to do the right thing in all aspects of this. Thanks again Poppy

poppy123456

It's better to ring them rather than write to them because they don't often respond to letters. If all of her ESA is income Related then it will stop with capital of more than £16,000. Same applies to any other means tested benefits she maybe claiming such as housing benefit and Council Tax reduction.

When you ring ESA if all of her ESA is Income Related make sure you ask for NI credits to continue.

lola96

Thank you Poppy for your sound advice. I’ve been very unsettled about this whole issue for some time. I appreciate you taking the time ..

poppy123456

You're very welcome.

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