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Life insurance payout & benefits
Cl. recently widowed & has 3 yr old daughter. She has received a substantial life insurance payment - 50% for her & 50% for her daughter. (Cheques received but not yet paid in.) Each of the payments is more than £16K. She is currently on HB, CTR, CTC & IS. She has enquired about the possibility of putting the money into trust.
I have advised I can see no way of doing anything with her own share, so her HB, CTR & IS will stop. Her daughter’s share will have to go into some sort of trust. If Cl.‘s share reduces later to less than £16K she will need to re-claim HB etc. Would any income from daughter’s share be treated as Cl. income in assessing benefit? I’ve a vague recollection that it might, but don’t have access to CPAG at the moment.
Any advice or other views welcome. Thank you.