Do Solicitors Inform DWP of Inheritance

Learn whether solicitors inform the DWP of inheritance in the UK and why it is the beneficiary’s responsibility to declare changes affecting benefits.

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When someone receives an inheritance, one of the most common concerns is how it might affect their benefits. Many people wonder whether solicitors automatically inform the Department for Work and Pensions (DWP) when a client inherits money or property. The answer depends on the type of benefit, the circumstances of the inheritance, and the solicitor’s role in handling the estate.

This article explains whether solicitors have a duty to report inheritance to the DWP, what responsibilities beneficiaries have, and how inheritance can impact means-tested benefits.

Do Solicitors Notify the DWP of an Inheritance?

In general, solicitors do not have a legal obligation to inform the DWP when someone receives an inheritance. Their responsibility is to administer the estate according to the will or intestacy rules, not to monitor how beneficiaries use or declare their inheritance.

Once probate is complete, solicitors distribute funds to beneficiaries as instructed by the will or court order. It is then the beneficiary’s personal responsibility to inform the DWP if the inheritance affects their benefits.

However, there are exceptions. If the solicitor is managing the affairs of someone who lacks mental capacity, such as through a Court of Protection deputyship, they may have a duty to notify the relevant authorities of financial changes, including inheritance.

The Beneficiary’s Duty to Report

While solicitors typically do not contact the DWP about an inheritance, beneficiaries who receive means-tested benefits are legally required to declare any change in their financial circumstances. Failing to report new income or assets could be treated as benefit fraud, leading to overpayment recovery, penalties, or even prosecution.

If you receive benefits such as Universal Credit, Pension Credit, Housing Benefit, or Income Support, you must tell the DWP as soon as possible after receiving an inheritance. This includes cash, property, or valuable assets.

Even if you do not immediately spend the inheritance, the DWP still counts it as part of your total capital.

How Inheritance Affects Means-Tested Benefits

Means-tested benefits are calculated based on income and savings. If an inheritance increases your total capital above certain thresholds, your entitlement may be reduced or stopped altogether.

As a guide:

  • If your savings are below £6,000, benefits are usually unaffected.

  • Savings between £6,000 and £16,000 may reduce the amount you receive.

  • Savings over £16,000 typically disqualify you from most means-tested benefits.

Different rules apply depending on the type of benefit, and other income-based support such as Council Tax Reduction may also be affected.

What If the Inheritance Is in the Form of Property

If you inherit a house or a share in one, the DWP may count the property’s value when assessing your benefits. However, there are exceptions. For example, if you continue living in the property or if it cannot be sold immediately, the DWP may temporarily disregard it.

If the property is being sold and you plan to buy another home with the proceeds, this may also affect how long the inheritance is disregarded. In these cases, legal advice can help ensure the correct steps are taken to avoid benefit issues.

How Solicitors Handle Inheritance Payments

When a solicitor distributes inheritance funds, they are focused on fulfilling the instructions of the will, not reporting financial changes to external bodies.

However, solicitors are required to verify the identity of beneficiaries and maintain accurate records under anti-money laundering regulations. This ensures transparency and accountability in the transfer of funds.

If a beneficiary receives benefits and is concerned about how inheritance might affect them, they can ask the solicitor for documentation showing the payment details to help report it properly to the DWP.

What Happens If You Don’t Report an Inheritance

Failing to report an inheritance while claiming benefits can have serious consequences. The DWP conducts regular checks and can cross-reference probate records with benefit claims. If undeclared inheritance is discovered, the DWP can:

  • Reclaim overpaid benefits.

  • Impose financial penalties.

  • Suspend or terminate benefits.

  • In severe cases, pursue legal action for benefit fraud.

It is always safer to report an inheritance promptly and seek professional advice on how it affects your entitlements.

Protecting Benefits Legally

In some cases, it may be possible to protect your entitlement through careful planning. For example, if a vulnerable person or someone receiving benefits is likely to inherit money, the testator (person making the will) can consider setting up a trust.

A trust can hold the inheritance separately, ensuring it is used for the beneficiary’s benefit without directly affecting means-tested benefits. This must be arranged in advance and drafted by a solicitor experienced in trusts and estate planning.

When Solicitors Might Inform the DWP

Although solicitors don’t usually contact the DWP about inheritance, they might do so in specific circumstances, such as:

  • When managing the affairs of someone under a deputyship or power of attorney.

  • When required by law or a court order.

  • If instructed by a client who requests that the DWP be notified.

Outside of these limited scenarios, solicitors are not responsible for communicating with the DWP about beneficiaries’ finances.

Expert Advice from Lillian Purge

  1. Understand your obligations. Beneficiaries must report changes in savings or income to the DWP, not solicitors.

  2. Seek legal guidance. If you are unsure how inheritance affects your benefits, speak to both a solicitor and a financial adviser.

  3. Plan ahead. If leaving money to someone on benefits, discuss trust options with a solicitor.

  4. Be transparent. Reporting promptly prevents overpayments and penalties later.

  5. Keep records. Retain all correspondence and documents from the solicitor handling the estate.

Solicitors play an important role in distributing inheritance correctly but are not responsible for informing the DWP of payments made to beneficiaries. The responsibility rests with the individual, and clear communication with the DWP helps protect both your benefits and peace of mind.

For related duties, read do solicitors keep copies of wills and do solicitors go to court. See more answers in our Solicitors Hub.