Inheritance, buying a house and the savings threshold

zoejane76

Hi , first time posting but after a little advice please. I have been lucky enough to have inherited a large sum of money . Currently my son and myself live with my father but I am looking to use all the inheritance to purchase a property for us both outright. This would mean my savings would go back under the £16k threshold. Would this been seen as acceptable to use the money to purchase a property or not please ? Any advice I’d be very grateful of 🙂

zoejane76

just to add my son is in receipt of PIP and I also receive carers allowance and UC as my son is autistic

Kimi87

Buying a home won't be considered Deprevation of Capital, but with your circumstances I suspect as soon as the money hits your account this will need to be declared to UC & end your claim.

You would then need to start a new UC claim once the money has been paid out for the house.

It might be possible for the money not to go into your account, such as it staying with the executor and going directly to pay for the new property.

Your son's PIP & your Carers Allowance wouldn't be impacted.

zoejane76

Kimi87 thanks so much . I am the only executor so unfortunately the money will have to go into my account but I will let UC know as soon as it does. I really appreciate your help 🙂

Kimi87

Legally the money belongs to the estate of the deceased until everything is settled and the beneficiary(ies) receive their inheritance.

You'd then tell UC when distribution is made and you receive your inheritance.

I suspect your situation might be different but below are my current circumstances.

I'm administering my mother's estate on a sole basis with myself & sibling as beneficiaries.

I've opened a new account (in my name) to administer her estate with so as not to mix finances, keeping records of money in & out of the estate (spreadsheet) plus all receipts.

I will declare to UC when distribution is made.

Because legally the inheritance is mine, but the estate funds are not.

Some prefer to fully inform UC as soon as they become executor/administrator, others follow my position.

You could always try speaking to a trained benefits advisor locally.

https://advicefinder.turn2us.org.uk/

MW123

@zoejane76

Your son’s PIP and your Carer’s Allowance won’t be affected because savings aren’t counted for either of those.

Using the inheritance to buy a home you’ll live in is completely allowed. The sooner you can move ahead with the purchase, the shorter the period you will be without UC. The home you live in is ignored for UC purposes, so once you’ve bought it, it will not be counted as capital.

If you’re left with more than £16,000 after buying the house, UC won’t restart. If you’re left with between £6,000 and £16,000, UC will reduce your award because of capital.

I would also point out, in relation to the advice above about an executor holding onto the funds, that an executor cannot lawfully “hold onto” a beneficiary’s inheritance. Executors are fiduciaries, which means they are under a legal duty to follow the terms of the will, comply with probate law, and act in the beneficiary’s best interests. They are not permitted to delay or retain funds for reasons outside those duties.

Once the estate has been fully administered and is ready for distribution, the executor must release the inheritance to the beneficiary.  You will need to report it to UC once the estate is ready to distribute your inheritance, because at that point you’re legally entitled to the money, even if it hasn’t yet reached your bank account.