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Inheritance advice

EmLou1

A family member is currently receiving means tested benefits as well as disability benefits. They have been told they are to receive some inheritance in the way of cash as well as a property, which they would need to sell.

2 questions….will this inheritance affect their benefits? If they lose their benefits would they be able to claim again at a later date if they needed to?

One other concern….my family member spoke to the company who holds the Will and was told that they could have the inheritance put into a trust fund that they could access when needed and this way it wouldn’t affect their benefits. This doesn’t sound right to me. Is that even legal?

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Alex_Alumni

Hello @EmLou1 and a warm welcome to the community

Thanks for reaching out with your query.

To answer your questions, it depends on how much inheritance they get. You can read information on Inheritance, lump sums and benefits on Scope 's website, but the key take away's are:

Savings will affect the following means-tested benefits:

Universal Credit
Income-based Jobseeker’s Allowance (JSA)
Income-related Employment and Support Allowance (ESA)
Income Support
Pension Credit
tax credits (Child Tax Credit and Working Tax Credit)
Housing Benefit
Council Tax Support

The DWP sets a limit of £16,000 in savings to be eligible for:

Universal Credit
Income-based JSA
Income-related ESA
Income Support
Housing Benefit if you’re under State Pension age

If your savings are:

under £6,000, your benefit claim is not affected by your savings
between £6,000 and £16,000, you lose some of your benefit payment
more than £16,000, you’re not eligible

Every £250 over £6,000 counts as if you had:

£4.35 of monthly income for Universal Credit
£1 of weekly income for Income-based JSA, Income-related ESA, Income Support and Housing Benefit

I hope this is all making sense for you, please do let me know if not.

In answer to your second question, I'm not sure that's sound advice, I would certainly seek advice from a professional though as I'm no expert. A good place to search is Advice Local.

Please ask if I can help any further, and I'll see what I can do

Alex

EmLou1

Thanks for your quick reply. From what I’ve read and from what you’ve said I think this is going to be a problem for them. The property they are inheriting will need to be sold and the proceeds split with other family members. It’s possible they will receive over £100,000 so their benefits will stop. However nice that sum is it won’t last them a lifetime and they will no doubt need to claim again in the future, if they can.

I think they need to get some legal advice before accepting this inheritance.

Thanks again for your help

EmLou1

They receive PIP, ESA, housing benefits and council tax benefits. Their partner also receives carers allowance and Universal Credit

Alex_Alumni

You're welcome @EmLou1 do let us know how things go if you can. I hope they can get the advice they need soon.

If you fancy, you can have a look around the forum, you can find all the latest conversations in our recent discussions category, all the different topics in our categories page, and you can meet and chat with other members over in our virtual coffee lounge too.

Enjoy your evening

poppy123456

EmLou1 said:

One other concern….my family member spoke to the company who holds the Will and was told that they could have the inheritance put into a trust fund that they could access when needed and this way it wouldn’t affect their benefits. This doesn’t sound right to me. Is that even legal?

Unless it states in the Will that the money is to be placed into a trust then doing so now will be classed as deprivation of capital and they'll still be classed as having the money.

You haven't said which benefits exactly they are claiming, so it's difficult to advise.

If they are claiming PIP this isn't means tested. If they are claiming either contributions based ESA/JSA then this isn't affected either. Same as tax credits, that's not affected.

If any of their benefits are means tested then savings/capital of more than £16,000 will mean entitlement will stop.

Once their money drops below £16,000 they can reclaim means tested benefits.

Very difficult to advise though without knowing exactly what benefits they claim.

calcotti

EmLou1 said:

They receive PIP, ESA, housing benefits and council tax benefits. Their partner also receives carers allowance and Universal Credit

PIP is not affected.
CA is not affected.
Assuming they live together I infer that the ESA is contribution based or new style ESA in which case it will not be affected either (the amount will be £117.60/week) if this is the case.
Council Tax Benefits and UC will end if capital exceeds £16,000 (threshold for CTB could be lower as each council can make their own rules).

EmLou1

poppy123456 said:

EmLou1 said:

One other concern….my family member spoke to the company who holds the Will and was told that they could have the inheritance put into a trust fund that they could access when needed and this way it wouldn’t affect their benefits. This doesn’t sound right to me. Is that even legal?

Unless it states in the Will that the money is to be placed into a trust then doing so now will be classed as deprivation of capital and they'll still be classed as having the money.
You haven't said which benefits exactly they are claiming, so it's difficult to advise.
If they are claiming PIP this isn't means tested. If they are claiming either contributions based ESA/JSA then this isn't affected either. Same as tax credits, that's not affected.
If any of their benefits are means tested then savings/capital of more than £16,000 will mean entitlement will stop.
Once their money drops below £16,000 they can reclaim means tested benefits.
Very difficult to advise though without knowing exactly what benefits they claim.

Thanks for the info.

Their ESA is income based, so I believe they can only have savings under £6000?

We just didn’t know if inheritance was treated differently, that’s why I’ve asked for them.

They want to get legal advise but can’t afford it so they are just going by what the Will people have told them but it sounded dodgy to me!

poppy123456

EmLou1 said:

poppy123456 said:

EmLou1 said:

One other concern….my family member spoke to the company who holds the Will and was told that they could have the inheritance put into a trust fund that they could access when needed and this way it wouldn’t affect their benefits. This doesn’t sound right to me. Is that even legal?

Unless it states in the Will that the money is to be placed into a trust then doing so now will be classed as deprivation of capital and they'll still be classed as having the money.
You haven't said which benefits exactly they are claiming, so it's difficult to advise.
If they are claiming PIP this isn't means tested. If they are claiming either contributions based ESA/JSA then this isn't affected either. Same as tax credits, that's not affected.
If any of their benefits are means tested then savings/capital of more than £16,000 will mean entitlement will stop.
Once their money drops below £16,000 they can reclaim means tested benefits.
Very difficult to advise though without knowing exactly what benefits they claim.

Thanks for the info.
Their ESA is income based, so I believe they can only have savings under £6000?

You said here that their partner claims UC and carers allowance.

EmLou1 said:

Their partner also receives carers allowance and Universal Credit

Do they live together as a couple? If so then the ESA can't be Income Related and if they are claiming UC then their rent will be paid as part of UC known as housing element, unless they are living in temporary or supported housing.

EmLou1

Yes they live together and I’m only going on what they’ve told me about which benefits they both claim

poppy123456

EmLou1 said:

Yes they live together and I’m only going on what they’ve told me about which benefits they both claim

Then they've given you incorrect information. They can't be claiming Income Related ESA at the same time as UC. One of them could be claiming Contributions based/New style ESA and then they both claim UC as a couple. Rent would be paid as part of their UC claim.

For every £250 or part there of over £6,000 there would be a £4.35 per month deduction in their UC. Savings of more than £16,000 would end their UC completely.

CTR as advised may have different savings/capital rules so the maximum amount maybe £6,000.

Carers allowance and PIP are not affected. Neither is New style ESA.

denise1964

Is there an assumed income from inheritance and if so how long before I can claim , example is 32,000 expected to last 2 or 3 years. Will I have to produce receipts.

poppy123456

denise1964 said:

Is there an assumed income from inheritance and if so how long before I can claim , example is 32,000 expected to last 2 or 3 years. Will I have to produce receipts.

There's no guidance on how long it should last. Of course if you buy the most expensive things then they may ask questions when you come to reclaim benefits, such as Universal Credit.

Not all benefits are means tested, which ones are you claiming exactly?

denise1964

we have been receiving other benefits that are not means tested, however we now need to reclaim and it will be universal credit instead of income related ESA and child tax credits will stop as soon as universal credit claim is made, so if we are turned down, due to time it should last then we lose £65 a week. My concern is that we will be told it should last in lieu of any benefits we may have received over the last 18 months and will include the fact we had an income from the ESA and child tax credits and carers benefit.