Look After Those Who Need it Most

A Trust is a legal arrangement whereby assets (money,investments, property and similar things) are managed by Trustees for the benefit of others.

Discretionary Trusts are set up by parents or other relatives as a way of making long-term financial provision for a disabled/vulnerable beneficiary. The reason a Trust is useful is that assets, once put in Trust, do not belong to either the donor (the person making the gift), or the beneficiary of the Trust.

This means that the assets held in Trust are not taken into account when assessing entitlement to state benefits like Income Support, or local authority obligations to fund some form of support or care.

For example, if parents make a Will that leaves their entire Estate to their child, and the value of the Estate amounts to more than (currently) £6,000, any means tested benefits the child currently receives will be immediately withdrawn until the value of the inheritance falls below the threshold level. If the Will had left the Estate in Trust the benefits would not have been affected.

The assets in the Trust can then be used to pay for extra things which any benefits may not fund, such as a holiday, new clothes, electrical goods, special equipment and luxuries. Importantly a Trust can also hold, manage and maintain the parental home if put into the Trust. Other reasons for creating a Trust is to help provide some financial protection protection into the future:

  • because of fears that local authorities may not always continue to provide care, or may provide insufficient care
  • providing a source of money to “top up” what a local authority is prepared to pay for care
  • to obtain better quality care, or a different care package
  • to enable the beneficiary to remain where they are, rather than be forced to move
  • to permit more choice and options now, and in the future

Therefore, before making a Will where there is a disabled/vulnerable beneficiary, the inclusion of a Trust should be carefully considered, otherwise the following could result:

  • benefits could be stopped
  • Entitlement to local authority could be stopped
  • a Receiver from the Court of Protection may be appointed to manage the affairs of the disabled/vulnerable beneficiary, which may result in delays and expensive fees, and they may not act as you would wish
  • the Estate may be subject to a mush harsher tax treatment

So, if one of your beneficiaries is in some way either physically or mentally disabled or vulnerable in some other way it really is important to protect their financial future through the creation of an appropriate Trust.

The creation of a Trust within your Will is quite straightforward, but it needs to be arranged in good time. If you die without having put the appropriate measures into place, then it will be too late!

For further information, and to make your Will to incorporate a Trust, please don’t hesitate to contact us. You’ll find us to be helpful, friendly and professional!

  • Single
  • £399
  • Joint
  • £599