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Forum Home  →  Discussion  →  Benefits for older people  →  Thread

Legal and Beneficial owner of capital

WR Adviser
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Welfare rights worker - Community Law Service, Northampton

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Hi

I have a client who has held £30k for her (adult) children, which was gifted to them by their late grandmother.  Client has held this money since the 1980’s and been on PC/CTB/CTR for years.  PC recently conducted IUC and stopped all MT benefits and created overpayment due to the capital.

Client states the money is not hers - it is for her children.  There is no will or documents to support this. The children now have the money as client felt this would remedy the situation (clearly it hasn’t as we now have notional capital to deal with as well).

Does anyone have any cases about ‘unofficial’ trusts or the beneficial ownership of capital which could assist?

Thanks

Mike Hughes
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Senior welfare rights officer - Salford City Council Welfare Rights Service

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“Held” how is always my first question.

Second question - is it prove-able it was never touched until being given to the children? Goes some way toward intent.

Third - get statements on who believed what. Partner of the adult holding the money? Friends? Family? The grandchildren? The bank? Did she get advice? Who helped with the PC etc. application? Did she declare it to them?

And so on…

Plenty of case law which I’m sure you can find via a search through threads and the case law section but in reality it’s all initially going to be about how it was held and evidencing the intent e.g. you can argue legal ownership/beneficial ownership etc. on current accounts but if, for example, the money was in an ISA in the Mums name then there’s no way around it being her money and not the childrens.

grant
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Welfare rights adviser - Sefton CAB

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You say she’s “held” this money since the 1980’s. That means she has “held” it for at least 26 years. Normally one would expect a gift to grandchildren to be handed over on either the 18th or 21st birthday.

Can your client explain why it wasn’t and what the “terms” of the “trust” were understood to be?

Sorry to be difficult but I think your client has a problem here.

Welfare Rights Nottinghan City Council
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Nottingham City Welfare Rights Service

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Hi Sarah,

The real question is who is the benefical owner of the capital. If she has kept it in bank account and never touched this for several years despite being on a low income then this would seem to be evidence that this is not hers.

Her principal argument is that the money was held in the bank account (preumably) in trust and that she was not the beneficial owner as she was carrying out the wishes of her mother to leave the money to her children The fact that the money is in the bank account does not mean that it belongs to the client it is the beneficial ownership that matters.

There is an evidential requirement on her to show that she was holding the money for someone else and in the burden of proof is on her see CH/2233/2007.  Where the commissioner notes:

‘Since that was on the face of it an ordinary beneficial account which he was able to (and did) operate and use for himself, the onus is of course on him to show that in truth it was money not belonging to him but held on trust for somebody else ... [and] he may be able to do this if he can demonstrate by evidence that at the time he received it this was money belonging to his sons from the estate of their late aunt, and was not intended as a gift to him or to be used for purposes of his own; but it is for him to satisfy the tribunal of this.’

This was however remitted as there needs to be a clear attempt by the tribunal to decide who the money belongs to.

It is also clear that this does not have to be in writing.There does not need to be a written trust this is stated by Judge Wikley in CH/510/2010. Here is stated:

... although it may be evidentially very helpful, there is no legal requirement for a declaration of a trust over monies to be committed to writing. Indeed, there are no technical formalities at all and it may be doubtful how realistic it is to expect a written declaration of trust in the context of a family relationship such as this.’ (paragraph 38)

The fact that one existed can be evidenced by verbal evidence to the tribunal see CSJSA/411/2009 Judge Gamble holds that, in considering whether there is a trust, the correct starting point is the common law presumption that any money in an account belongs to the account holder. However, Judge Gamble goes on to say that this presumption can be rebutted by any evidence to the contrary, in including verbal evidence. As a result, Judge Gamble says that the tribunal was wrong to decide that it was necessary for the claimant to show that a trust had been created in favour of his mother-in-law.

So in short to set out the law there seems nothing from a legal point of view in preventing a tribunal from accepting the money was her children as long as they accept her story about why she had money. The fact that she has not spent it despite having modest resources herself would seem to indicate evidence that she did not think this was her money and was carrying out her mother’s wishes.  This should go in her favour.

A colleague of mine had a simelar case where money was held by a client for her disabled adult son in a bank account in her name and the tribunal found that she was not the benefical owner. It all really revolves around the credibility of the clients evidence.

Hope this helps

Rob s
NCCWRS

elaineforrest
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Benefits specialist - Dumfries & Galloway Citizens Advice

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Surely the issue here is why she was bequeathed money for her adult children to use, and then she held on to it for nie on 20 to 30 years. She only then gave it to the children when DWP stopped her benefits. How long would she have held on to it if DWP had not discovered the capital. There is no paperwork or evidence of the deceased’s wishes. The decision by DWP seems sound to me on these bare facts, unless she has a very interesting argument for holding the capital for 20 or 30 years.

WR Adviser
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Welfare rights worker - Community Law Service, Northampton

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Thanks all. I realise it’s a tricky one and I think all the posts have confirmed what I thought. Just checking I hadn’t missed anything obvious.