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Julia Routen
01295 204012

Pitfalls for Executors

by Julia Routen | Jun 30, 2016 |

An increasing number of claims are being made by the Department for Work and Pensions against estates where the deceased was claiming means tested benefits such as pension credit.  

Before an executor can claim their inheritance, it is extremely important for the executor to ensure that, if the deceased was in receipt of Pension credit or any other means tested benefits, that no payments were made incorrectly. The Department for Work and Pensions (DWP) will sometimes ask for a schedule of assets to check this. It is not uncommon for people to unknowingly continue claiming benefits which they are no longer entitled to, and in cases like this the executor will be liable to repay the full amount wrongly claimed.

Elderly people can make such claims without always understanding the rules. The current threshold is £16,000.  Sometimes people forget that they have Premium Bonds or other National Savings products, or else they mistakenly believe that as these holdings are not income taxable, they don’t count toward the threshold total.

Some people misunderstand the position with shareholdings, which are a little “out of sight, out of mind”.  They know they receive a dividend twice a year, but they don’t think of shares as the equivalent of money, and so something that may take them over the threshold.  

It can take up to a year to sort out a refund payable to the Department of Work and Pensions.  Beneficiaries understandably feel upset about the delay before they receive their inheritance.  Nevertheless, executors must exercise extreme caution and not make any distributions before a repayment to DWP has been settled.  Whilst there are instances where executors may claim funds back from beneficiaries, these are very limited.  They definitely do not extend to cases where the executor knows there are debts which have not yet been met, or are on notice of potential debts/claims against the estate.  In this situation an executor makes himself personally liable to the creditor.

Spratt Endicott is recognised by The Legal 500 UK (A clients’ guide to the capabilities of law firms) as the leading firm in North Oxfordshire in terms of its expertise and experience in the areas of powers of attorney, trusts, estate planning, wills and probate. We deliver these services at competitive prices and can often agree a fixed fee with you at the outset of the matter.

For further information on Estate Planning, Wills or Lasting Powers of Attorney contact Julia Routen, Solicitor at Spratt Endicott on 01295 204012 or email jrouten@se-law.co.uk.

*Disclaimer: While everything has been done to ensure the accuracy of the contents of this article, it is a general guide only. It is not comprehensive and does not constitute legal advice. Specific legal advice should be sought in relation to the particular facts of a given situation.*

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