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Can you pay inheritance into a trust fund that is already set up without it affecting your benefits?

sheZZa

My cousin receives PIP, ESA and Housing Benefit. If he received any inheritance from his grandparents (100,000) can he pay it into a Trust Fund that is already set up without it affecting his benefits? He would like to buy his house with the inheritance if possible.

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sheZZa

@woodbine
Thanks got your answer. I thought as much. Due to disability and mental health issues, someone needs to look after the money for him. I will double check with CAB.

Adrian_Scope

Hi @sheZZa. Did you manage to speak to CAB or Welfare Rights?
While it is in his account his income-related benefits will stop. However, if he uses it to purchase a house he then lives in, once his total savings/capital go under £16,000 he would be entitled to income-related benefits again. Do you know if any of his ESA is contribution-based?

sheZZa

@Adrian_Scope
hi Adrian. Yes I’m did get advice from a solicitor who said that it should be paid into a Beneficiary Trust and that way his benefits will be protected.

calcotti

sheZZa said:

@Adrian_Scope
hi Adrian. Yes I’m did get advice from a solicitor who said that it should be paid into a Beneficiary Trust and that way his benefits will be protected.

They need to be very confident that the solicitor understands benefits law.
If the grandparents are still alive and the question is about how they write their wills then setting up a trust would appear to make sense. If grandparents have already died then setting up a trust retrospectively will I think be deprivation of capital. However please note I am not a lawyer!

sheZZa

@calcotti
The grandparents are still alive and sought advice from a solicitor who suggested a beneficiary trust.

calcotti

That may make sense then. I assume the point of the trust will be that claimant is not in control of the money so it is not counted as his. (Have to confess I am slightly puzzled as to why having had legal advice you came to an Internet forum to see what is amateurs thought!) Good luck getting it all sorted.
The guidance for income based ESA and capital is here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/932378/dmgch52.pdf
Paragraph 52180 onwards deal with trusts, 52236 onwards deal with discretionary trusts.

sheZZa

@calcotti
Thanks for your help.The information from the solicitor was sought around about the same time as I asked here. I also like to double check and ask others who may have found themselves in the same situation. I find it helpful l to hear from other people’s experiences and not only one source hence asking here.

calcotti

No criticism was intended. Best of luck.

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