Cash Inheritance from my late Father and CMS
I Hope someone has advice for me.
I currently pay maintenance to my ex wife for two children.
My Father passed away in 2020 and left me £91,000 in his Will. This was paid to me in two installments in 2021 (£50k) and 2022 (41k).
I have multiple health issues, am on PIP and can't work. My new wife cares for our disabled son, who has severe Autism and our daughter.
Living on benefits is difficult and my wife and I got in to debt to the tune of £50k.
When received my Father's inheritance I used it to pay off all our debt (loans and credit cards). I also replaced both mine and my new wife's cars. I am left with about £5500 in my savings account from the £91k Inheritance.
NOW......my ex wife has found out about my Inheritance and has applied to the CMS stating 'Mrs......has raised a variation stating that Mr........ has cash assets of £91,000.00 from an inheritance.
I don't have £91k in the bank like she thinks. It has been used to pay debt and as I said replace both my wife's and my cars.
The CMS have written to me saying 'The application has been made on the grounds of notional income from assets'.
I have no assets as the cash has all but gone. I have sent them bank statements showing all the transactions.
Do I have anything to worry about?
Anyone had this issue?
am a little familiar with cms and their rules on assets/notional income. they would have taken 8% of the inheritance amount and applied to your child maintenance payments. but not sure what they will do seeing as it's been spent and you no longer hold it. I don't think they can apply the notional income variation for assets you no longer have. but I may be wrong. I would recommend this CMS group for paying parents. their very experienced:
My understanding is that the inheritance has been used to pay off debts and is legitimate use of money, the obvious thing to do. I cannot see any reason for CMS to become involved in that and they can only judge based on what you have. The only caveat to that maybe if you had parked the money somewhere where it could not be seen and in fact you retained the asset.
I think you have nothing at all to worry about. If you had inherited during divorce and not declared as part of the financial settlement, then you would have an issue.......
That's good to hear, I hope you are right.
I definitely have not hidden any money away in any way shape or form and can I guess get old credit card statements too, to prove that I paid our debt down. Currently I have given the CMS copy bank statements. These show my Inheritance coming in and within days it all going out to loan and credit card companies. Also my statements show the purchase of 'new' cars for me and my wife. Although I use the word 'new'...the car I bought for myself was 7 years old and my wife's 8. So the CMS can see that we are not really living the high life lol.
My only concern is the fact that I did actually receive the Inheritance in the first place. I hope that the CMS don't just say that I did have it and back apply the 8%, not caring if I do or don't have it at this point in time.
My understanding is that you have nothing to worry about. Even if you had £91k sitting in an account somewhere, it was only in scope of a notional income calculation whilst it was there. Once it has been used to pay off debts / buy other assets it is no longer in scope of a notional income calculation. If your car is worth > £31,250 then that could be in scope I think. Each individual asset has to exceed £31,250 in order for notional income to be applicable, so if you no longer have any individual assets above that value then in my opinion you should be ok.
The only risk I see is having notional income calculated for the period whilst your inheritance was due to you or whilst it was in any one place and worth over £31,250 and even then this should only apply for that particular period - i.e. pro-rata for the child maintenance year in question. This is a judgement call by the CMS also so if they see it was used to pay off debt then they - in my view anyway - should not even assess you for that period before it was used to pay off debt. But that is a decision for the CMS to make. If they rule against you in your case, then there is always the Mandatory Reconsideration stage, and after that the HMCTS appeal stage, but in my view I don't think it should even get that far.