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Leaving money in your will

(29 Posts)
Cathie72 Thu 02-Jan-20 15:46:27

My daughter and husband are in the Benefit system due to very difficult health reasons.Hopefully this will change but may not.I wish to leave them money in my will but this will mean they will lose their Benefits and once my gift is used up they may not be able to go get their Govt support as before.Does anyone know of a method to leave them so much a year for several years so they can accept the money without losing Benefits as the amount would be under the level they are allowed to accept or haveeun savings.I presume a Trust would need to be set up.What would that cost?Is there a simpler way?

M0nica Thu 02-Jan-20 16:08:31

Ask a solicitor. they are the only people that can advise you in this situation. Make sure you see one who specialises in wills and trusts.

Cathie72 Thu 02-Jan-20 16:12:05

Thank you I find it hard to get my Lawyee to state how much this sort of thing would cost.I want to do the same for grandchildren rather than leaving large sums of money.

Namsnanny Thu 02-Jan-20 16:18:18

I agree with Monica, professional advice should be more reliable.

I'm having g a similar problem and I'm thinking of looking in to taking out a pension in the person's name.
Apparently it can be done for children.

At the moment I know very little, but maybe you could look into it for your family?

Tedber Thu 02-Jan-20 16:35:49

I suppose what you are really asking is how do you become a benefit cheat? 😩 But a solicitor may know some loopholes.

I always thought married couples wealth was joint property anyway? So would have thought that would affect your husband’s benefits? Maybe not?

anniezzz09 Thu 02-Jan-20 17:04:44

Do check this out (for instance on gov.uk or CAB) but usually you can gift £6000 per year to another person without that affecting their tax threshold.

I'm not sure how that amount would relate to benefits income. Probably some kind of trust as you say would sort out your situation. Do get some independent advice from a financial advisor. A good start might well be the CAB who give all sorts of help.

That's a bit of a side swipe Tedber given the ways people in the UK snaffle money away, especially those who have more and can thus pay for high level advice and supposed legal loopholes, it's a bit much to accuse someone of trying to be a benefit cheat when they are trying to help their children just like all those who have plenty of money which they haven't necessarily worked for!

Sadly the Conservative way is to blame and vilify those less fortunate, including the sick, disabled and homeless.

GrannyLaine Thu 02-Jan-20 17:18:50

Your post was making very good sense anniezzz09....... until you in turn made the sweeping generalisation...
the Conservative way is to blame and vilify those less fortunate, including the sick, disabled and homeless
angry

MadeInYorkshire Thu 02-Jan-20 17:56:00

I am afraid that is true GrannyLaine, we are 'useless eaters' and the Govt gives not one toss about us!

@Tedber - ugh another one tarring everyone with the same 'feckless' brush!

These benefits are affected by savings -
Income-based Jobseekers Allowance.
Income-related Employment and Support Allowance.
Housing Benefit.
Income Support.
Pension Credit.
Universal Credit.

I think that if you are on Contribution Based benefit then there is no limit, but please don't take that as gospel!

This may help

www.moneyadviceservice.org.uk/en/articles/how-do-savings-and-lump-sum-pay-outs-affect-benefits

GrannyLaine Thu 02-Jan-20 18:04:35

So you think anyone who votes Conservative is tarred with that particular brush MadeInYorkshire?? I really resent that implication. More sweeping generalisation.

Scentia Thu 02-Jan-20 18:07:30

I do believe if they are on any kind of means tested benefit then there is a limit to how much they can inherit which I think is about 16k I think this is the same if it is paid in instalments or in a lump sum.
If their benefits are not means tested then inherited money will not be taken into account.

Cathie72 Thu 02-Jan-20 18:26:56

Thank you all for very helpful replies. My aim is not anything to do re Benefit cheating or tax evasion just trying to give them a little extra each year to help them day to day eg Spreading out a £20,000 gift over 25 years.I am by myself and would like to do the same for my grandchildren .Giving then an annual income and the only way may setting up pension plans.I hear so many stories of younger people inheriting and splashing out unwisely. Just trying to sort out options.

Doodledog Thu 02-Jan-20 18:30:50

It's pretty much the same question as arose on the thread about someone's husband giving his daughter money when he was alive, isn't it?

GrandmaJan Thu 02-Jan-20 18:39:53

Would the Citizens Advice Bureau be able to help? Their advice is free and I think they can get you access to other advisors.

Bobbysgirl19 Fri 03-Jan-20 00:31:38

That is not entirely right Anniezz. My understanding is that the maximum amount a person can gift in a tax year is £3000 before it affects any Inheritance Tax threshold.

mumofmadboys Fri 03-Jan-20 07:53:51

I don't think this has anything to do with Inheritance tax. The OP can leave 325 K and 650K if she is a married person ( or widowed) without paying inheritance tax. She is talking of a much smaller sum and wanting to leave it to her DD and SIL as a small annual income.

jacq10 Fri 03-Jan-20 08:42:34

This shouldn't cost more than it would to use a solicitor to make a will. We set up a trust fund for DGS - think it was under £200. The only advice I would give is not to have a solicitor as a trustee. This can come at a high cost and if the nominated solicitor leaves the firm a new trustee has to be appointed and there will be fees to be paid. A friend found this out unfortunately.

anniezzz09 Sat 04-Jan-20 12:18:58

You are correct Bobbysgirl, perhaps the £6000 per year was in the past? Whatever, this page is very helpful, what a complicated business it is:

www.moneyadviceservice.org.uk/en/articles/gifts-and-exemptions-from-inheritance-tax

GrannyLaine I'm afraid years of Conservative government, now to be continued and the comments one frequently sees on this forum are what informed my view of Conservative policies. The vilification of those less fortunate and the revival of a maxim of the 'deserving poor' is alive and well!

kircubbin2000 Sat 04-Jan-20 12:54:20

There won't be inheritance tax for small bequests.

Hetty58 Sat 04-Jan-20 13:01:50

I really object to the idea of taking advantage of the benefits system in this way.

I'm a taxpayer and I really don't mind paying into the pot for those who need it. In fact, I'm a firm believer in a fairer society and think we should all pay more tax.

What I don't like is paying for people who don't need my support. If your capital exceeds the allowed amount, you are quite able to support yourself - and should do so!

Tedber Sat 04-Jan-20 17:33:49

Totally agree Hetty58. The benefit system is supposed to be for people in dire straits who need it. IF they get on their feet, by whatever means, then the benefit stops! People trying to find 'loopholes' when leaving money ARE trying to cheat the system, no matter what they claim. I just don't 'get' the people that feel 'entitled' to benefits no matter how much money they have? It is ME (and you and all) that work hard to provide these people with the money in first place!

So going back to OP....she WANTS to leave money to her daughter and husband but doesn't want them to lose their benefits? In my view THAT is precisely why the government cracked down on the benefit system in first place! (and I am not a Tory) Sadly many people who actually did deserve it were caught up in it and were penalised.

Like you I have no objection to helping people in genuine need but...please? IF you get money, then admit it! It is only same as if they 'earned' it! except they haven't had to get up at 6 a.m in cold mornings lol.... They can still have some money in bank and claim (which is probably more than I have even working lol)

Davidhs Sat 04-Jan-20 18:32:20

Many Benefits are means tested so any bequest you give will be taken into account, small gifts of cash to help with day to day living costs should not be any problem.

As you are thinking of trusts, that would work if it was for the children, maybe and only maybe you could set up a private pension fund that paid X thousands a year, any financial advisor should be able to guide you on this.

Cherrytree59 Sat 04-Jan-20 18:45:38

Not sure re legal side, but what about material gifts instead.
New washing machine, car, furniture.

Just wondering if gifts or an inheritance of jewellery, antiques and paintings count?

Barmeyoldbat Sat 04-Jan-20 19:00:01

Its easy to say and judge Hetty when you are not on benefits. If the couple receive a small lump sum and have to lose all their benefits, then when the money is gone is a very short time, probably about 6 months or so then they will have to reapply, jump through hoops and wait goodness how long before they get any benefits.

Cathie72 has stated that it because of health reasons, so who are we to judge sitting in our ivory tower of good health and wealth.

Cathie, my daughter receive benefits for being disabled, EESA and PIP she also receives a small monthly pension £250 from her husband and it doesn't seem to effect her benefits, including housing benefit. It does effect however, how much she has to pay for care, but thats OK. You could buy them all a small pension but check first.

M0nica Sat 04-Jan-20 21:45:26

Am I right in thinking that the sum of money involved is actually quite small, tens of thousands rather than hundreds of thousands?

Savings over £16,000 exclude you from UC, but savings of £6,000 are excluded.

I do not know the age or life expectancy of the OP but wouldn't the simplest thing be to gradually pass the money to her DD and spouse in small amounts as and when they need it,while she is alive until it is reducd to, say, £10,000 and then leave it to them as a cash sum. I assume that they have no saving at present. Their UC would be reduced, but not stopped until the amount fell to £6,000 and that would have them back on full UC with £6,000 safe in the bank.

How old is your DD or her husband. Are they near pension age? I ask because permitted capital limits there are higher, although I do not quite understand how this applies to the new style pensions.

You could put it in a trust to pay them the invested income and pass the capital over when your DD reaches pension age.

The problem is, that if the amount is small, the cost of setting up the trust will be £300 or more and then you need a trustee to administer the trust (not your DD or her DH), probably it will need to be a solicitor and that could cost another couple of hundred £ a year, so a lot of a relatively small some will be lost to ongoing legal fees.

I would say give them any money you can afford as and when needed while you live and leave them the lump sum when you die. The costs of running the trust over 5 or 10 year, if the amount is small, will probably exceed anything they would lose in UC if their savings went over the UC or pension limit.

TrendyNannie6 Sat 04-Jan-20 21:49:12

Anything like this I would ask a solicitor