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You may be trying to provide for a person who is vulnerable in some way, for example, they may be affected by physical disability or illness or learning difficulty or mental health illness. They may have dependency issues on alcohol or drugs or gambling. They may vulnerable to financial exploitation or abuse for other reasons or they may just simply not be good at managing money. There may be concerns about that person’s relationships, perhaps they are about to get divorced.
When dealing with these situations, it is seldom thought appropriate to leave gifts to such beneficiaries directly or, as commonly thought, to other family members on their behalf. Receipt of an inheritance will also affect means tested benefits and services available to your intended beneficiary.
The best way of making provision in such circumstances will often be by making use of a Trust. These can be created both during lifetime and in a Will. If suitably prepared, they can protect an inheritance from predators and creditors as well as the loss of means tested benefits and services. It is vital to ensure that you get specific advice about your own particular circumstances when considering the use of Trusts.
Franklins can assist in discussing your options with you. There are different types of Trusts with varying tax consequences and differing levels of flexibility that will need to be considered carefully in conjunction with your needs to assess what the appropriate structure would be for you.
Depends. If the disabled person’s estate is over the threshold then yes. People can divert wealth to Trusts called Disabled Person Trusts so that they are not made wealthier on the death of a parent or grandparent.
Someone who by the effect of a condition or dependency is vulneralbe to abuse.
No. A Trust can not be a disabled beneficiary.
It takes the asset of the person who puts it on Trust and it is held by Trustees for the exclusive benefit of the disabled beneficiary.
Yes if you have the mental capacity to do so.
If you have any questions about providing for someone who is disabled or a vunerable beneficiary, please don’t hesitate to contact our team of experts who are on hand and ready to help you.
