Inheritance effect on benefits

Hello Alan,

I am sorry to hear of your recent loss.

I would advise you to seek a legal opinion. I have known three very different examples of where a trust has helped with this kind of situation, but each situation is individual. Trusts are can be complex and such actions could lead to a deliberate deprivation of assets claim by the DWP. It is beyond the scope of this site to advise.

One of those examples was similar in some ways to yours. The money was not paid by the executors to the potential beneficiary until he had taken advice. That way the solicitors were able to modify the will and have the money paid into the trust rather than to him.

Catherine

Hi Alan,
I am also sorry for your loss. It is always difficult coping with bereavement especially if you have to resolve money issues. Catherine is correct, setting up a trust could well be if assistance here, and legal advice us crucial.
The limit for means tested benefits is £16,000 - if you inherit more than this, this will remove your entitlement to means tested benefit. Pip is not means tested so you are right to say this will still be paid. If you use your inheritance on necessary expenditure, which will include rent, food, car expenses and reduce the amount under £16k, you can reapply for means tested benefit. It is possible to use the money for other items- disability gadgets or appliances may be allowed, vital house or car repairs have previously been allowed as well. Debts that need to be paid off may also be OK. It is important to keep receipts for everything. As long as DWP can see that payments are for legitimate purposes, it is likely that they will be allowed. The reason why I mention this is to avoid allegations of 'deprivation of capital'. This means if you appear to have frittered money away buying ridiculous or unnecessary items DWP will say you have deliberately spent money to be able to gain benefits. However, by keeping receipts and just making normal payments, as outlined above then you are unlikely to infringe this rule. If you have to pay £800 for rent each month, with normal food costs and eg car expenses, then it is likely that your capital will soon arrive under £16k. However, it is important to get detailed advice from an advisor eg at local CAB or advice centre, giving all details and they will be able to advise fully. This is quite a technical area.
I hope this helps, and wish you all the best in the future.

LL26