My friend's mum has recently died and he has been left a part share of her property along with his son - this is what is says in the Will but I can't understand it:-

'real and personal property or by codicil hereto otherwise specifically disposed of as Tenants in Common in equal shares'

there is a mortgage on the property.

My friend claims IB ESA and would like to move into his late mum's property, his son is ok with this. Obviously a new mortgage would have to be taken out by my friend's son.

The question is, if my friend moves into his late mum's property with his son taking out a new mortgage, will this affect his IB ESA and will the DWP class it that he has equity in the property? I know he cannot claim Housing Benefit for the property when he moves into it, but would like some info that I could pass onto him. Thanks for any advice.

The property, as long as it is his only place of residence, shouldn't make any difference to his benefits.

Thank you for your advice Mr P.

My friend is currently living with his son's family and it is a bit overcrowded. My friend is separated and would be living on his own in his late mum's property. As previously mentioned, the son has equal share of a small amount of equity with my friend (his dad), and the property will need a new mortgage to be taken out by his son as currently the mortgage is in the late mum's name - she only died on Boxing Day so it's early days yet.

Also in the Will, the late mum left one relative £15,000 and another £10,000, so the son will have to take out a mortgage to cover the existing mortgage, the £25,000 to pay off other people named in the Will and money to pay for the funeral and legal expenses relating to Probate.

As the death is recent, and with the Christmas holidays, the Will has not yet been dealt with by solicitors and put into Probate. He is not yet ready to move into his mum's property as he is terribly upset - how long does he have before he needs to advise the DWP about the Will and his decision to move? I guess it's when he actually moves into her home, but would like some clarification as my friend is not thinking straight at the moment and I don't want him to get into trouble with the DWP, although his circumstances have not yet changed.

Sorry for the long post, but advice would be much appreciated. Thank you.

I wouldn't of thought you would be able to take on a mortgage whilst on ESA. Affordability etc.

Sell all the assests, pay off the existing debts and creditors and have the executor of the will distribute the assests

My friend on IB ESA would not be taking out a mortgage. His son would take out the mortgage as I previously mentioned. Thank you for your take on this sgtbush.

I think its going to get too complicated with at least 3 benefactors and then another party with a mortgage...

I would think that if any party goes to dispute anything, solicitors could get involved and this would quickly eat up any equity.

Personally I would have all assets sold and money pooled.

Also in the Will, the late mum left one relative £15,000 and another £10,000, so the son will have to take out a mortgage to cover the existing mortgage, the £25,000 to pay off other people named in the Will and money to pay for the funeral and legal expenses relating to probate.

 

[...]how long does he have before he needs to advise the DWP about the Will and his decision to move? I guess it's when he actually moves into her home,

Depending on the exact wording of the will, it may be possible that any cash is used to settle the mortgage along with solicitors fees and other expenses, leaving the two cash beneficiaries with nothing. However, this would be down to the executor and of course, the will. The solicitor acting as the executor will be able to advise on this.

As for informing the DWP, you are only required to notify of a change in circumstances "in good time". This is usually accepted to be around 21 days unless there are exceptional circumstances. Certainly tell the DWP when the move takes place, but the inheritance can be notified once the property has been transfered to the beneficiaries.

From personal experience, there is no rush for your friend to do anything. The grieving process is different for everybody, and for some, it can take a long time to come to terms with a death. Tell him to take his time, and offer what ever support you can.

Thank you Mr P for your kind advice. This is a messy Will. All the money is tied up in the property. The son is the DWP Appointee for his grandmother and is going to advise them of her death tomorrow (Monday 08.01.18)

The property is worth around £120,000 maximum, there is a £44,000 outstanding mortgage, so when you deduct the mortgage, this leaves £76,000, then the payout of £25,000 to 2 other people in the family leaves £51,000, then the funeral and legal costs approximately £12,000, leaves approximately £39,000, that will then be divided equally between the father and son.

This is where I need to find out if the son obtains a mortgage to cover the above expenses, can the father not take his share and the son who will be a first time buyer get a mortgage and allow his father to live in the property and would this affect his IB ESA?. As the father (my friend) is an older person and on IB ESA, his late mum's 2 bed bungalow would be ideal for him to live in.

Thank you Mr P for being so kind, my friend is so upset and keeps crying so it's difficult to deal with the legalities of all this, I just don't want my friend to get into any trouble with the DWP, however, all money is tied up in the property so not available to use. Many thanks.

Your friend and his son need to sit down with the solicitor handling the probate and discuss what options are open to both of them. Normally, any debts owed by the deceased (e.g. a mortgage) are paid off once funeral expenses have been paid. Often, this means any fixed assets such as a property are sold so that specified bequests can be paid out, and then the residual is distributed. The executor (i.e. the solicitor) can elect to sell the property to a residual beneficiary at the going market rate. However, much of this is dependent on the specific wording of the will.

If the son and your friend become joint owners of the property, the DWP should disregard it as capital if it is his only home (regardless of where the son lives) so his benefits should remain unaffected.

Thanks again Mr P for your helpful advice. You are right, my friend and his son should sit with the solicitor and sort this out.

I don't think my friend would be able to obtain a mortgage as he is sick and elderly, and claiming IB ESA & DLA. It would be his son who would have to take out the new mortgage with my friend's share of the proceeds (whatever is left after paying everything off and divided between friend and son).

I know that my friend would not claim Housing Benefit as the property would be mortgaged by his son. I think he could claim Council Tax Benefit with a 25% single person discount though.

Am I correct in thinking that my friend does not have to inform the DWP about this Will at the moment as there is no hard cash and the Will has to go through Probate so he has no changes in his circumstances at the moment. Sorry for all the questions, but just want to pass on the correct information in an extremely difficulty situation.

If he is living alone, he will certainly get the single person discount. As he is also claiming ESA and DLA, he should also get a further reduction on council tax. How much he will actually have to pay is dependent on which council he falls under as each have their own set of rules.

As for informing the DWP, you are correct in that they do not have to be informed until such time as funds are distributed and/or he moves in to the property in question.

Thank you Mr P for your advice, it is much appreciated. I now have a clearer mind on how to advise my friend and his family as to what steps they should take next.