There has recently been an interesting case that has come before the courts, dealing with exactly this question.
Where a person, in receipt of means tested benefits, receives an inheritance, the good intentions of the testator can unintendedly cause negative consequences. That consequence being that any entitlement to means tested benefits may be lost.
The Court of Protection has again looked at the question as to whether entitlement to means tested benefits can be saved retrospectively by those funds being placed in a disabled person’s trust. In the previous case of LMS, the court allowed the application, although there was no guarantee that the local authority and the DWP would accept the decision made.
In the recent case of F and R, the court took a different view and did not allow the trust to be put in place. The result being that entitlement to means tested benefits would be lost.
The difference between the two cases relates to the intention of the testator. In the case of F and R, the court decided that it could not be certain that the testator had intended (but had not done so) to save the beneficiary’s entitlement to means tested benefits. The court could not find any such intention in the case of LMS. The court also expressed concerns regarding the risks of the funds being held away from the supervision of the OPG and the likelihood of the entitlement to means tested benefits being protected, in the longer term, in any event.
Given this recent decision, it is clear that appropriate steps should be taken in respect of vulnerable beneficiaries prior to death. If you are considering leaving a gift in your Will to someone in receipt of means tested benefits, please get in touch with Tozers and we can discuss the options that are available to you.
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You may have a good idea about what you want your Will to address, or you may not know where to start. Either way, we will discuss all the various considerations, and listen to your thoughts and concerns so you can feel confident your Will covers everything it needs to.
We can advise on:
- how to structure your Will to make sure your assets are passed on in the way you’d like.
- the options available for those with more complicated family arrangements.
- how you can use your Will to pass on your business, or family farm, to the next generation.
- protecting your assets with succession planning and establishing trusts in your Will.
- the Inheritance Tax rates and implications of the provisions of your Will.
Whatever the New Year brings, making or reviewing your Will should be towards the top of your list.