Can you pay inheritance into a trust fund that is already set up without it affecting your benefits? — Scope | Disability forum
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Can you pay inheritance into a trust fund that is already set up without it affecting your benefits?

sheZZa
sheZZa Member Posts: 244 Pioneering
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. 

Comments

  • woodbine
    woodbine Community Co-Production Group Posts: 7,132 Disability Gamechanger
    PIP won't be affected anyway, any income related benefits would stop, putting the money into a trust would (in my opinion) be deprivation of capital in order to claim benefits, they could of course seek advice from a DWP DM to confirm this
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  • Cressida
    Cressida Member Posts: 976 Connected
    edited January 2021
  • sheZZa
    sheZZa Member Posts: 244 Pioneering
    @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.
  • woodbine
    woodbine Community Co-Production Group Posts: 7,132 Disability Gamechanger
    @sheZZa ah you didn't mention that, welfare rights would be also somewhere you might want to check.
    Be extra nice to new members.
  • Adrian_Scope
    Adrian_Scope Posts: 8,552

    Scope community team

    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? 

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  • sheZZa
    sheZZa Member Posts: 244 Pioneering
    @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.
  • woodbine
    woodbine Community Co-Production Group Posts: 7,132 Disability Gamechanger
    Just to pick up on Adrians point if the ESA is cont.based with an income related top up then the cont.based part wouldn't be affected, solicitors aren't very often the most knowledgeable people when it comes to benefits, welfare rights would still be a good idea or speak to  DM at the DWP?
    Be extra nice to new members.
  • calcotti
    calcotti Member Posts: 5,271 Disability Gamechanger
    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!
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • sheZZa
    sheZZa Member Posts: 244 Pioneering
    @calcotti
    The grandparents are still alive and sought advice from a solicitor who suggested a beneficiary trust.
  • calcotti
    calcotti Member Posts: 5,271 Disability Gamechanger
    edited January 2021
    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.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.
  • sheZZa
    sheZZa Member Posts: 244 Pioneering
    @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
    calcotti Member Posts: 5,271 Disability Gamechanger
    No criticism was intended. Best of luck.
    Information I post is for England unless otherwise stated. Rules may be different in other parts of UK.

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