Disclaiming an Inheritance …

lola96
lola96 Community Member Posts: 11 Listener
edited February 2025 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 Community Member Posts: 64,456 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 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 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!

  • neil12345
    neil12345 Community Member Posts: 59 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 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.

  • davidsk
    davidsk Community Member Posts: 3 Listener
    https://forum.scope.org.uk/discussion/126062/disclaiming-an-inheritance

    Hi, I’m really sorry you’re going through this — it sounds very tough.

    Yes, it is possible to disclaim an inheritance, meaning it would go back into the estate. But unfortunately, the DWP may still see this as deprivation of capital, even if the money is never accepted, especially with means-tested benefits like ESA (IR). It could affect your daughter’s benefits.

    It’s definitely worth getting advice from a welfare rights advisor or Citizens Advice before taking any action. They can help you understand the risks based on your situation.

    Take care — you’re not alone in this.

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