My friend lives alone with 7 year old son. Lost her father to cancer last October and her mother has now been given a few months to live. Same disease.
Mother is being very practical, trying to get will updated, all paperwork in order etc. My friend and her two siblings will get approx £30k-£40k each from sale of house / estate when mother passes on.
However, here comes the issue.
Friend lives in rented accomodation and receives housing benefit (or whatever it is called) due to her low earnings (she does work). If mother dies and she is left this money, this will have an adverse effect on her benefits as she will have this money in the bank.
Now she is not one to take the system for every penny that she can get, but she does not want her mum and dad's hard earned money being simply spent on covering housing rent that she would normally get paid anyway. In an ideal world she would use it as a deposit on a house but it really won't get her much though it may be enough to get some sort of shared ownership scheme.
Is there any way round this, what would the implications be if it was left to her 7 year old son instead? Would this then totally tie up the money to he was 18 or would she still have access etc? Would this impact on benefits?
I have advised her to make appointment with DSS but in the meantime was wondering if any knowledge on here?
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"If it was left to her son would SHE have access."
Then it would not have been left to her son, would it, it would have been left to her. That sounds like benefit fraud to me.
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Have found this through googling
www.gartonsolicitors.co.uk/view.aspx?id=313
Keeping your benefits
So how can you keep your benefits and still have the inheritance that is legally yours ?
The Answer
This can be prevented by the testator (the person making the will) simply leaving the money in trust, as part of their will.
They would need to:
•have a will
•set up a trust before they die
•leave the trust and the money in it to the person on benefits
Meant to say this is in Scotland, not sure if it is any different?
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>> Meant to say this is in Scotland, not sure if it is any different?
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complex area of law, Scottish or not.
consult a specialist solicitor - worth paying for the amounts involved.
Last edited by: John H on Mon 7 Mar 11 at 09:37
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In reply to Mapmaker
I was meaning in a sort of Power of Attorney sort of way, leave the money to the son but able to be spent if for the son's benefit eg. buying a house and getting a stable upbringing rather than living in rented accomodation able to be kicked out at any lease renewal.
Last edited by: BobbyG on Mon 7 Mar 11 at 09:51
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See a decent solicitor - to sort this out should not take too long. It should cost less than £300. She will probably get about 1/2hr. "free" to explain the details.
Edit: Of course, what's done depends on what the desires of those involved is - best get this sorted out first.
Last edited by: FotheringtonTomas on Mon 7 Mar 11 at 13:46
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She needs to phone her local council Benefits Team who will advise of what she can and can't do and what they take into account as income/savings etc. If their fraud team discover she has come into some money, they may enquire where it has gone or how it has been spent. They have the power to do that and interview under caution under PACE. Sounds harsh but it's fair considering they are dealing with public money.
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While I sympathise with the OP's friend, isn't the whole point of benefits to assist those that find themselves in need of help?
Inheriting several ten of thousands wouldn't appear to put them in that category.
She could always blow the lot, immediately, and then be liable for benefits.
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If a person had earned 30/40k this year, then they would rightly be removed from the benefits system. Why would they then think that their income, however gained, should be ringfenced and that they should still receive handouts whilst in posession of the money?
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Agree with you guys, I am usually the first to shout from the rooftops if someone is playing the system.
Probably with seeing what they have went through in the last few months, knowing what they will need to go through very shortly again, it just seems a waste of their parents hard earned income to be used for a few years to cover rent and then go back to where she is just now.
However if it could be set aside and she continues to get benefits then it gives her some time to look at the availablity of shared ownership schemes and then she would stop being a burden to the state.
Difficult one, where morals and personal involvement clash!
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>> Inheriting several ten of thousands wouldn't appear to put them in that category.
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She hasn't inherited tens of thousands, that is a possible/likely eventual outcome if the mother's intentions and wishes are reflected in her will.
If the mother's real desire is to safeguard the money for the benefit of her grandchild then she is perfectly entitled to put the money in trust for that purpose. Get it done properly by will.
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Housing Benefit / Legal / Will issue - Mapmaker
