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12 June 2017 | Comment | Article by Roman Kubiak TEP

Department for Work and Pensions claims against estates considered

My colleague Jessica previously blogged about DWP claims against estates. The Law Society Gazette recently published an article which discusses dealing with these issues on a day to day basis, and because of this it is worth providing an update.

It appears to me to have become more common in recent times for the Department for Work and Pensions (DWP) to send a letter to the executors, or solicitors dealing with the estate, informing them that a potential claim is being made.

These letters are generally received following the issue of the grant of probate, and usually ask that a schedule of assets and liabilities of the estate are provided. This information is usually fairly straightforward for a solicitor to provide, given that estate accounts and a schedule of assets will normally have already been prepared.

Once this is submitted to the DWP there are two possible outcomes. The DWP will either confirm that all assets were correctly taken into account when the original claim for means tested benefit was made by the deceased, or alternatively they will commence an investigation into the estate. If they do open an investigation the process can be time consuming and lay executors often do not understand the seriousness of the investigation.

The task of providing information to the DWP can be more difficult than it first appears. For example, the DWP will routinely ask for copies of bank statements going back a specific number of years, however the banks and building societies themselves often only keep records going back six years. This means the executor is often unable to provide the information requested. The DWP may also ask for information regarding specific transactions, which can be difficult for executors to provide depending on how closely acquainted they were with the deceased’s finances during their lifetime.

It will usually be prudent for the executors to ensure that there is no distribution of the estate while an investigation is on-going. It can be a difficult task explaining this to beneficiaries, especially as in some extreme cases the claims can take over a year to be resolved. If the deceased has taken advice and correctly declared their assets when applying for means tested benefits the situation will be more straightforward, however people in that position often do not.

It can be incredibly frustrating for beneficiaries to be told that no distribution will be made from the estate, be it by way of cash or transfer of shares/investments or property. However, executors must consider carefully their duties to distribute the estate correctly and to preserve the assets in the estate.

My main advice to an executor who receives the initial request for information from the DWP would be to make the beneficiaries aware of the position at the outset, and thereafter to provide them with regular updates. It is also worth bearing in mind that the DWP can be slow in processing correspondence (I have often telephoned them asking for an update to be told that a letter I sent two months previous has not yet been processed), and as such it is worth trying to keep on top of the matter.

The writer of the article in the Law Gazette is calling on solicitors to provide him with their view of the DWP procedure. I am sure that many will oblige, and I will be keeping a watchful eye on any developments.

Author bio

Roman Kubiak is a partner and head of the market leading Contested Wills, Trusts and Estates team.

He advises across the whole spectrum of private wealth disputes, with a particular focus on high value, complex and cross-border disputes including: trust disputes, breach of trust claims and applications to remove trustees; will disputes, particularly those with an international element; claims under the Inheritance (Provision for Family and Dependants) Act 1975; and claims for equitable relief under proprietary estoppel, constructive trusts and resulting trusts.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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