I have a client whose mother died in February last year leaving her about £10,000.This client receives IS/IB/DLA/CTB. She notified the IS section by letter in April 2007 of this change of circs , and said that although she had inherited some money there were still some large bills outstanding , such as for the Headstone , house repairs and so on , which would have to come out of this money.She heard nothing in reply to her letter and all her benefits continued to be paid.
She assumed all was well. Then I came along and thought we had better look into this.
The IS section say they never received this letter and I only have client's word it was sent.
So the upshot is that IS payments have been suspended and client has to provide all the relevant bank statements and proof of bills paid etc before they will consider if benefit is still payable.
Client has £8000 in a bank account which is arrears of benefit which can be disregarded , and she has the paperwork to support this.But I still think there will still be a hefty overpayment , including CTB ,so I need to know if this letter that was supposedly sent will hold any water at a possible appeal.
Client is a fastidious record keeper and keeps copies of everything , but does get confused between her different benefits , thinking IB is IS and so on.
Any thoughts would be much appreciated. Thankyou.

More important - can she prove her mother's debts at the date of death? She should not have been paid any legacies in her own right until all outstanding debts had been paid, which is the job of the executor/administrator of the estate. Unfortunately I can't remember what the rules are about headstones, whether that is treated as a debt of the estate like the rest of the funeral expenses, or whether it is her own choice: it's a very long time since I did any probate work.
If these genuinely are debts of the eatate then she did not inherit £10,000: she inherited what was left after all the debts were paid, and the money initially only passed to her as (presumably) administrator of an intestate, not to herself beneficially. Did she get probate/letters of admin? Most banks won't pay over as much money as that without a grant.

About her accrued benefits: is this actually arrears, ie a backdated award eg on appeal, or is it unspent accrued benefits? Are you sure that she is still within the disregard period, which is 52 weeks for lump sums of arrears, but only one payment-period's worth for accruing unspent benefits? If she is over these periods then this is just as much capital as any other.