Care Fees

Also, check if your council has a Money Management team. They manage the money of vulnerable people who can't manage it themselves. They should be able to give you advice and work with whichever department is demanding the fees. The service might have been a victim of the cuts in your area, not sure if it is a statutory service or not.

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The pension trustees have discretion as to who and how they pay the lump sum. I suggest you contact them and explain the nature of your daughter's disability, then ask them if they will pay the lump sum into a "vulnerable person's trust". You could be the trustees and as it would be a discretionary trust your it would not be means tested by the council and she would keep her benefits. The trustees could however use the fund to pay for holidays etc. VPTs also have tax benefits.
Do take proper legal advice on this.

By 'the Council' this will mean some, probably junior, admin assistant who is just following procedure. I suggest you find out who runs that particular department and tell them to put a hold on their demands until this has gone through probate. Also if your daughter lacks the mental capacity to deal with then you must point that out too.

Given your daughter's position has she not an advocate appointed to help her with this?

I'm not sure is she entitled to a disabled living allowance ,would she be eligible for an advocacy service and or the oversight of an independent reviewing officer the other thought is would Mencap have any ideas..Not that I am any expert however I used Work in the foster care Sector.and heard about the role of some of these,people.who seem to have a perspective of the service user.