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Forum Home  →  Discussion  →  Work capability issues and ESA  →  Thread

Inheritance,  ESA and discretionary trusts

 

PippaD
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Benefits Advisor Maggie's South West Wales, Swansea

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Total Posts: 17

Joined: 20 June 2013

I need some clarification please about a client of mine who has taken advice with regards to making her will and leaving her house (her only asset) to her two adult children who are both on PIP and ESA.

Her son lives with her in the house she will be leaving and he is in the support group of ESA so I imagine that the ‘value of his part of the home will be disregarded if it is occupied as his home by a person who has LCW’.

However she has a daughter who lives in supported accommodation on ESA (support group) and PIP and HB.

If the mum dies and has a will that states they both equally inherit the house but he lives in the house will her share be seen as capital even though she cant access it? I cant see anything to tell me that it would be disregarded.

My client has told me that she is considering that the house may be part of a discretionary trust to avoid the house been treated as capital. Is this right?

I saw this in CPAG
“Capital payments are taken into account in full but income from the trust is generally treated as a voluntary payment and is ignored. The trust ASSET itself doesn’t count as capital because payments are at the discretion of the trustee. ”
BUT I cant imagine that there will be income from the trust if the son is going to be living in the property? Also I assume the house would be an asset therefore not capital so disregarded if in a will as a trust?

Am I going round in unnecessary circles here?

     
nevip
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welfare rights adviser, sefton council, liverpool

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Joined: 16 June 2010

In simple, abbreviated terms, for him the value of the whole of the property will disregarded because he lives there.  For her, its value will be disregarded because her “incapacitated” brother lives there.  No need for trusts or anything like that, as such. 

However, Trusts have to be a consideration, for this and other purposes, and whoever draws up the will might need to be cognisant of the relevant social security statutes and to consider them in light of the future health implications for both of them.

      [ Edited: 1 Oct 2018 at 02:15 pm by shawn ]
PippaD
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Benefits Advisor Maggie's South West Wales, Swansea

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Total Posts: 17

Joined: 20 June 2013

Thanks that’s very clear and a great help.