Will Planning for Families with Disabled Children

Of course, it’s true that not all families with disabled children will have the same needs or dynamics and many disabilities will not cause that individual to seek financial support from the government during their lifetime but for lots of families there is simply no way around it. For these families it is imperative both the grandparents and parents receive specialist advice and take a joined-up approach to their Will planning and estate planning generally.

If an individual is likely to rely on means-tested benefits during their lifetime because of not being able to work, then receipt of an inheritance will affect their eligibility. Likewise, if an individual through disability is not able to manage their own finances, receiving money when a family member dies will likely trigger an expensive application to the Court of Protection for a deputy appointment. The result is the inherited funds are used on legal fees and to replace benefits income rather than enhancing that individual’s life.

With proper planning this can be avoided, and all the funds left to the disabled individual can be ring-fenced away from any means assessments and applied for the benefit of the individual. Where there are vulnerable or disabled beneficiaries in a family, we encourage an inter-generational approach; there is little point is structuring a parent’s estate and leaving the grandparent’s estate free to undermine it.

Whenever you are looking to protect assets or protect individuals from those assets thought needs to move towards the use of trusts. A trust is simply a legal arrangement where nominated individuals (called trustees) hold funds for people (called beneficiaries) in accordance with the terms set out by the person creating the arrangement (called the settlor). Different trusts exist to meet different needs. In the case of planning for disabled beneficiaries, we typically focus on two options; discretionary trusts; and disabled or vulnerable persons trusts. Find out more about vulnerable persons trusts here.

The aim of the planning is to prevent the outright receipt of funds by the disabled or vulnerable person and both the discretionary trust, and the disabled persons trust achieve this. The main differences between the two types of trust are how they are taxed; the eligibility criteria and the freedom trustees have in terms of being able to apply the funds.