Disclaiming an Inheritance …

lola96
lola96 Online Community Member Posts: 11 Listener
edited February 24 in Money and bills

Hi, my daughter is due an inheritance which has and is causing friction from a family member. She is also in receipt of ESA IR which I’m aware she will lose.
Does anyone know if it is possible to disclaim the inheritance and I don’t mean diverting it anywhere.. just completely disclaim whereby I think it goes back into the Estate which I’m not bothered about. My question is, would DWP see this as Deprivation of Capital if I took this decision on behalf of my daughter .. my mental health has been greatly affected by this whole situation which seems to be going on and on.. I would appreciate advice thanks ..

Comments

  • poppy123456
    poppy123456 Online Community Member Posts: 64,463 Championing

    If the inheritance takes her capital above £16,000 ( I think it will based on your previous threads) then not accepting it will be deprivation of capital and she'll still be treated as having the money. If all of her ESA is Income Related this means it will stop, regardless of whether she accepts it or not.

    Same applies to housing benefit and council tax reduction if she claims either of those.

  • lola96
    lola96 Online Community Member Posts: 11 Listener

    Thanks Poppy.. it looks like we will have to accept the inheritance then as whatever way I go it will look like Deprivation of Capital.. I feel hemmed in about this situation and it’s a learning curve. If someone wants to leave a bequeath in a Will that is on means tested benefits.. they really need to set up a Trust in the Will before their death. Otherwise, it causes the situation that we find ourselves in now…. As well as dealing with unrest from a family member.
    Thanks

  • ethelmama
    ethelmama Online Community Member Posts: 2 Listener

    Hi. Interesting discussion here. I'm advising a friend whose father is due to receive an inheritance which will push him past £16k. He has been unable to work for a long time due to multiple mental health issues and addictions, so a large inheritance would be an absolute disaster for him. Could a case be made to the DWP that a deed of variation is actually necessary for his wellbeing? Thanks!

  • MW123
    MW123 Scope Member Posts: 1,140 Championing
    https://forum.scope.org.uk/discussion/comment/993645#Comment_993645

    The DWP does not have a direct role in approving or denying a Deed of Variation, as this is a private legal matter between the beneficiary and the estate. However, it will assess how any inheritance or trust arrangement affects your friend’s father’s entitlement to benefits. Given that this is a complex area of law where errors can have significant consequences, I strongly recommend your friend seeks professional legal advice.

  • neil12345
    neil12345 Online Community Member Posts: 56 Connected

    My advice is take the inheritance. Buy a decent car like 8 grand ish sell it later for cash or just keep withdrawing the money £100 or £200 per week and say u had gambling issues alcohol issues drug issues. Buy some furniture. Reclaim when u get below 16.000 grand . Just depends how much inheritance your getting. If alot Buy an house if u don't all ready live in one . I got 30 grand I Reclaimed benefits within 6 months. I bought motorbike and sold it for cash later on . I did gamble alot to unfortunately.

  • ethelmama
    ethelmama Online Community Member Posts: 2 Listener
    https://forum.scope.org.uk/discussion/comment/993660#Comment_993660

    Thanks very much for your answer. Yes, makes sense. I don't think I meant get approval from the DWP for the Deed of Variation, rather, go ahead and do it with the estate and lawyers etc, but when the DWP comes knocking and says that constitutes Deprivation of Capital and that benefits should be cut off, the family will be able to put forward the case that had he kept the £70k it could have ended up with dire consequences, eg overdose, while the steady small income of Universal Credit just keeps him going slow and steady. Along those lines anyway.

    I'm just reading between the lines that the guidance says it "could" constitute Deprivation of Capital in the eyes of the DWP, rather than "definitely will". So there seems to be room for making an argument here.

  • MW123
    MW123 Scope Member Posts: 1,140 Championing
    https://forum.scope.org.uk/discussion/comment/993721#Comment_993721

    I understand your point. It’s unfortunate that a trust wasn’t set up by the testator for your friend’s father before their passing, as that could have helped manage the situation more effectively. The DWP is known for taking a strict stance on Deprivation of Capital, particularly when such a large sum is involved.

    While arguments about wellbeing could be taken into account, your friend would need to provide strong supporting evidence, and there’s no guarantee the DWP would accept it. It’s undoubtedly a complex situation, and seeking professional advice from a solicitor would be crucial to avoid any potential complications for your friend’s father in the future.

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