How do I protect beneficiaires who have a learning disability?
When it comes to making your Will, you may have to consider how you would like to provide for your son or daughter who has a learning disability. You will want to ensure that (s)he is adequately provided for in your Will, however, you may also have concerns that an inheritance will affect his or her benefits. We would recommend that you consider setting up a Trust within your Will.
What is a Trust?
A trust is an arrangement which allows a person, known as a trustee, to administer property or money for someone else who is known as a beneficiary. You can nominate who would be the trustees, for example brothers, sisters, uncles, aunts or professional advisors. There are many different types of trusts. The most common type of trust which is used to provide for beneficiaries with learning disabilities is a Discretionary Trust.
What is a Discretionary Trust?
A Discretionary Trust provides that the trustee can use his or her discretion about how payment is to be made to the beneficiary. For example, the trustee can decide if and when payments are made, the amounts to be paid and the frequency of payments. Payments can be made to the beneficiary to buy holidays, day trips and special aids among other things.
What are the benefits of setting up a Discretionary Trust?
One of the main benefits of setting up a Discretionary Trust is that it should not affect any benefits that the person is receiving. Due to the way in which funds are made available to a beneficiary of a Discretionary Trust, the trustee can take into account any effect that payments would have on the beneficiary’s means tested benefit payments, such as income support and housing benefit.
How do I set up a Trust?
A trust is usually set up by a solicitor who can include a trust as part of your Will. It is important for you to consider who you will appoint as the trustees as these will be the persons who are responsible for managing the trust. You may wish to appoint a family member or close family friend together with a professional advisor.
Points to Consider
Each case varies depending on circumstances but if you do have a child with learning difficulties it is very important to put something in place to protect their future needs.
As well as setting up a Discretionary Trust, you may also consider it beneficial for your child to grant a Welfare and Continuing Power of Attorney in favour of their parent or parents (or perhaps a close relative). This would allow the parent as an attorney to make decisions regarding medical treatments, but also to deal with financial and property markets on their child’s behalf. This might be important in the future when, for example, the child has to apply for housing accommodation.
If your child does not have the capacity, i.e. does not fully understand the implications of granting the Power of Attorney, then you may need to consider applying for a guardianship order. This is more regulated and the guardian requires to be appointed through the courts. A guardianship order gives those who have an interest in the personal welfare and finances of a young adult with special needs, the ability to make important decisions on his or her behalf.
The needs young adults have will vary considerably. Some may need a guardian for making particular decisions, others may need assistance for all aspects of their daily life. A guardian may wish to seek powers to deal with matters relating to the adult’s living arrangements, finances, personal welfare and healthcare decisions.
The Private Client department at Pomphreys solicitors has experience in areas of law affecting adults with incapacity, including Discretionary Trusts, Powers of Attorney and Guardianship Orders. We would be happy to have a meeting with you to discuss how best to meet your child’s future needs.
If anyone has any interest in pursuing this, we would be pleased to speak to you. Please contact Gordon Sommerville at 1 Kenilworth Avenue, Wishaw, ML2 7LP or on 01698 373365 for more information.