My sons inheritance might put me over the benefits threshold

[petemc]

Hi Folks,

 

My son (8) received an inheritance from his Auntie a few years ago. The will stated that the money was to be kept for him until he turned 18 but It seems as though his money will be treated as mine when claiming income support and housing benefit. The figure is 15k. It was not put into a trust. Do I need to put it into one in order to disassociate it from my families income? I am determined that my sisters wishes be fulfilled but I cannot afford to be penalised for it.

 

Regards to all

 

Pete

[honeybee13]

Hello there.

 

Other members of the forum know more than I do about this, but I think there may be an account you can hold on behalf of a minor. Setting up a trust can be expensive and I would hope you wouldn't need one.

 

I hope some of our experts will be along to tell you more.

 

My best, HB

[BankFodder]

It may not have been put formally into a trust but you can be sure that it is in trust and where a trust has not been specifically setup then it is called a constructive trust. If you used the money now you would actually be liable for it and as it is you have a legal duty to account for it and to make sure that it is put away prudently pending his majority.

 

I suggest that for the money you set up a young savers account in his name and put all of the money in there. Do it with the Nationwide, for instance. Be careful because they will want to know where the money comes from so make sure that they have all the paperwork and that they agree that they are happy about it before you put it into the account.

 

You had better see a solicitor and have the trust established on a proper footing for the avoidance of doubt. Definitely keep it and the interest it produces at arms length. The benefits people will treat you with scepticism so make sure that you do everything very thoroughly. You will be able to use some of the trust money to pay for the expenses - but makes sure that everything is accounted for and there are solicitors receipts for everything.

[petemc]

Thanks BankFodder

 

The money is in a young savers account at LLoyds. I will enquire with the solicitor about the procedure in setting up some kind of legal framework around the money.

 

Regards

 

Pete

[MIKEY DABODEE]

If I.S is paying for your child, then that child shouldnt have savings over 3k.......

[petemc]

Hi Mike

 

I understand what you are saying but it is not savings, it is an inheritance, held until he becomes 18.

 

I spoke with the Solicitor earlier and she said that I need to locate the probate document to prove that this was the purpose behind the inheritance. Easier said than done but I believe that the probate office will search for it for £6.

 

Thats it so far. :-0

 

Pete

[MIKEY DABODEE]

can he get at the money now? or can you?

and do you claim I.S for him or child tax credits

[petemc]

The money is in an instant access account Mike so yes, and yes his mum claims child tax credits.

[MIKEY DABODEE]

If the money was in his name and you claimed I.S for him then the I.S for him would cease as he has capital over 3k, but seeing you claim tax credits for him then it doesnt effect in that respect.

 

BankFodder has given excellent advice you will need to find the probate document.

it may be worth spending the £6 then.

 

Do I.S and H.B know about the money?

Edited February 7, 2012 by MIKEY DABODEE

[petemc]

So Mike you are saying that he is not entitled to I.S. Even though he cant access his money for 10 years.

 

 

Is this your opinion or do you know for sure? The reason I ask is that I am getting conflicting advice.

 

Cheers.

[MIKEY DABODEE]

You are stating that your wife is claiming CTC for your son,

 

so Income Support is not in payment for him anyway, I hope

 

CTC is being claimed iro of him

 

You are claiming for yourself and your wife I take it and he is on the claim, but no I.S in payment for him,

 

If Income support where to be paying for your son and

he had capital over 3k then I.S for him, it would cease under normal circumstances

 

Quote

If they have more than £3,000 capital, you will not get any personal allowance for them, but you will still get the family premium. For detailed information on this, see ‘Income and Capital "

 

 

but if he couldnt access the money then the above may not apply, but it would be up to a DM who would need to see all the paperwork

Edited February 7, 2012 by MIKEY DABODEE

[petemc]

Thanks for your comments Mike. I will need to further investigate.

[MIKEY DABODEE]

hope you get his paperwork sorted out for him

[sparky514]

Do you have a copy of the will? this would state that the money was left to him by his aunt, and that he can't touch it until he reaches 18.

[petemc]

Yes, I do. It was not written witha solicitor because her time at the end was so short so I need to find if there was a letter of probate granted, or a letter of administration,which is what happens in the event of no will (or legally unacceptable will)

[sparky514]

then you need to contact the person who applied for the probate, and they should be able to provide you with a copy. I am not sure the probate office will discuss it with you if didn't apply for probate, I think it may have something to do with the data protection act.

[petemc]

That is not possible for various reasons. I am under the impression that the probate document is a public record, like births and deaths. I have the application form here, there is no mention of privacy law. There is a check box for if you are the executor or not, so as far as I know they will release the probate document to non-executors.

[sparky514]

But someone must have applied for probate for a record to exist. Probate is not always needed, my Mum passed away in April, the will she left was a mirror will with my Dad, but only regarding the property, not her bank accounts etc. I rang the probate office and asked if we needed to apply, they said it depended on the banks involved and amounts of money. Some banks insist and some don't.