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Thread: inheritance issue

  1. #1
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    inheritance issue

    I am on ESA because of disability and in the support group because I'm too ill to work. My brother died recently and left a mortgage-free house which he wanted me to have but left no will. My divorced parents are next of kin and so will inherit jointly. They are happy to take out a deed of variation so the house comes to me. A solicitor tells us that the house will be classed as capital asset in regard to ESA so I would not be able to own it outright. She suggests it is put in trust to me. I live with my elderly mother at present and have no property or assets. As the house would be my primary residence then, it would seem unreasonable that I cannot inherit the house outright. After all, I would be eligible for ESA if I already owned a house. Any advice would be much appreciated.

  2. #2
    Senior Member nukecad's Avatar
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    The solicitor is not strictly correct.
    (I'm guessing she is a property solicitor, or professional executor, and may not too familiar with the benefits system)?

    It depends on if you will be living in the house or not.
    (You have to be actually living there for it to be your Primary Residence).

    If you are living in the house then it is your home and not counted as capital for benefits purposes.

    If however you stay with your mum and were not living in it then it would be counted as a capital assesset and any Income Related benefits would stop.
    (Contribution Based benefits would not be affected).

    If you are going to live in it then you would inform the DWP of the situation and that you intend to live in the house.
    Once the house is in your name then you would have 26 weeks to move in.
    If you hadn't moved in by those 26 weeks then they would class it as capital from when it was first put into your name.

    Not knowing your full circumstances I'm unsure why the solicitor is suggesting a trust?
    It may be the best for your circumstances.
    (Or the solicitor may just be looking to make more money in legal fees, unfortunately some will do that).
    I don't know everything. - But I'm good at searching for, and finding, stuff.

    Migration from ESA to Universal Credit- Click here for information.

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    Thank you so much Nukecad, this is a real game changer. I obviously need to look for a solicitor who knows what they are talking about. Easier said that done

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    Senior Member gus607's Avatar
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    Like Davis Cameron & many well known politicians & well off people putting all your assets in a family trust is the way to go. One man I know of sold his house (£300k) bought a smaller property & put all his money in a trust. Having no assets to his name on paper he qualifies for Pension Credit & many other means tested benefits.
    Setting up a family trust can cost £1500 easily but the benefits are obvious.
    Call me Mike.

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    Thank you so much gus607, family trust is one of the options we are considering as it would be fairer to my sister and mum too. You have certainly nudged us in that direction then. Cheers

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    Senior Member gus607's Avatar
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    Quote Originally Posted by Anice49 View Post
    Thank you so much gus607, family trust is one of the options we are considering as it would be fairer to my sister and mum too. You have certainly nudged us in that direction then. Cheers
    Only too happy to help. Please remember to seek propper legal advice. This is how the better off avoid inheritance tax. Most of the rich & famous use this to avoid tax & quite legal too.
    Call me Mike.

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    I am having trouble finding a solicitor who thinks I can inherit when on ESA if it is my primary residence. Is it possible please to give me a reference that I can quote to a solicitor to prove my position? Scope suggested the Disability Rights Handbook but couldn't give me any page numbers etc. because covid means they are not in the office. Can you help please? Many thanks

  8. #8
    Senior Member nukecad's Avatar
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    Point them to the DWPs 'Decision Makers Guidance' for ESA volume 9, chapter 52, paragraphs 52387 onwards "Dwelling occupied as the home".

    https://www.gov.uk/government/public...ce-staff-guide
    52387 The dwelling occupied as the home is disregarded indefinitely. Only one dwelling can be disregarded. However in some circumstances, more than one property can be the dwelling occupied as the home (see DMG 52397 et seq).
    Also "Premises which a person is taking steps to get possession of", paragraph 52563 onwards
    52563 Premises which people are taking steps to get possession of are disregarded to give them time to get possession and to start living in the premises if they

    1. are going to live in the premises as the home and

    2. have

    2.1 asked for legal advice about getting or
    2.2 started legal proceedings to get possession.

    The period of disregard is 26 weeks, or longer if it is reasonable, from the date the person asked for legal advice or started legal proceedings, whichever is earlier
    There is probably more in that document that is also relevant, but those two should get them on track.

    TBH though - If you are going to also inherit above £16,000 cash from your brothers pensions as stated in your other thread then all this is accademic as those monies will mean that Income Related benefit will stop anyway, regardless of where you are living.
    Last edited by nukecad; 23-09-20 at 15:36.
    I don't know everything. - But I'm good at searching for, and finding, stuff.

    Migration from ESA to Universal Credit- Click here for information.

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    Thank you. I know what to do now

  10. #10
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    Does anyone know how I would stand for putting in a new claim when my inheritance money runs out? That's been my main concern re coming off ESA. I have only just discovered that I would have been eligible for PIP for years! Maybe I should apply for that now?

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