Help! I am looking for any case law that will help in the following situation. Client has bi-polar disorder (manic depression) and her mother wanted to put the inheritance she was due to receive into a discretionary trust so it would not affect her benefit entitlement. She had made a note on a copy of her will to this effect but before she was able to implement her wishes she had a stroke and died. She and her other siblings agreed that a deed of variation to the will would be the right thing to do to ensure that their mother's wishes were carried out.

Now she is being caught by the deprivation of capital regulations and the DWP are saying that as all parties to the will have to agree a variation she did deprive herself of capital in order to gain benefeit. I am planning to argue that the intent was to follow her mothers wishes which she would have carried out herself had she not had the stroke prior to being able to do so.

Is there any case law that would help?

Mon 01-Mar-04 12:59 PM by shawn

He cannot deprive himself of capital until he actually possesses it (see R(SB)38/85, R(SB)40/85))

I do not see how agreeing to the variation of a will amounts to deprivation of actual capital. See also perghaps an analogous situation re the right to take proceedings over the marital home on divorce (R(IS)1/03)

In R(SB)9/91, the Commisioner strssed that the positive intention to obtain benefit must be shown to be a siginificant operative purpose. The burden of proof is on the AO and it is not enough for the AO to show that obtaining benefit would be a natural consequence.

The fact that your client has manic depression and her mother wanted his inheritance to be put into a trust is highly significant because mad spening sprees are a very common feature of the manic phases of bi polar disorder. His mum would no doubt want the money put into a trust even if no benefit issues were involved.

In R(IS)15/96 the Commissioner held that using monies from a Criminal Injuries Compensation payment to reduce a mortgage was not deprivation, but merely securing his future

In CJSA204/2002 it was held that keeping a promise to lend a deposit for a flat even though the sale was not completed was not deprivation as the claimants motives were not to let her son down. Your client may have enough insight into his condition to realise that his siblings are acting in his interests, and may well consider that by not agreeing to the variation,he is letting them and his mother down

In CIS40/1989 the claimant caried out her mothers wishes and gave part of the amount received from the proceeds of her deceased mothers house to her children and grandchild. The AO and SSAT found that there was deprivation but the Commisioner disagreed.

CIS40/1989 may support your case re carrying out mothers wishes, but I would also stress the fact that a discretionary trust may be the only way of protecting your clients future because of his illness (and of course put the other arguments that there is as yest no actual capital for your client to deprive himself of)

Thanks for these. It looks as if the CD about carrying out a person's wishes not being considered deprivation (I can't see your reply as I am typing this so can't quote the number) would be most relevant in this situation as that is what my client is doing. She was very close to her Mum and would be very upset were she not able to do anything possible (including agreeing to the variation of the will) that would help her Mum's wishes be carried out.

I have a pdf copy of CIS40/1989. Dont have your email address to hand but post it (with REMOVE added for security if needed) here and I will send you it