Deed of Variation or not?

[centac]

Hello

I would certainly appreciate opinions on this.

The will of my late mother (she passed away a year ago) is going through probate. I am one of 5 beneficiaries (all siblings) who will receive around 50k each (the result of the sale of the only asset, a house).

I have a child with learning difficulties (7) who needs support and will continue to do so in later life and a discretionary trust fund for vulnerable persons seems appropriate for him.

My family and I are currently in receipt of means- tested benefits (HB/C. Tax/income related Job Seekers Allowance). I wish to protect these until I find employment, although the HB/C.Tax would likely decrease in relation to income earned.

As a beneficiary, can I set up a discretionary trust fund for my child without this action being seen as a deliberate deprivation of capital by the benefits office. I am aware of the savings/capital limits set but don’t know what the legal position is regarding disclosure or how one is deemed as depriving oneself of capital.

Or must I get a Deed of Variation to add my son as a 6th beneficiary (upon agreement by other beneficiaries of course) ? I would still be a beneficiary but much of my share of the proceeds would be allocated to my son. It can be quite a costly exercise relative to the values involved (I have been quoted between £2.5 to 4k +VAT for the DoV and Trust Deed.

Thank you.

[maths]

Others on this site are more knowledgeable about means tested benefits etc and hopefully will respond.

However, if you have inherited say 50K then of course this is your capital. If you settle it on trust I suspect that this constitutes deprivation of capital. Similarly if you execute a DoV again this is deprivation.

DoVs are widely misunderstood. You have inherited 50K. By executing a DoV you are gifting it to in this case your son (directly) or on trust for him. Either way you are depriving yourself of capital.

If you are providing for your son I suspect a discretionary trust may offer the greatest future flexibility.

[Lee Young]

It will be seen as a deliberate deprivation of capital. The DOV is a fiction for inheritance tax purposes but for all other purposes it is merely a lifetime gift by you.