Creating a trust fund for a disabled child.

Halcro

I have a 14 yr old autistic son who has been left some money in his grandfather's will. It's not a lot, a few thousands, but will probably be of some use to him if left to grow. Is it possible to create funds that he has limited or no access to unless controlled by us or an executor, even after he reaches 18 yrs. Our worry is that as we, his parents, are in our 50s and don't have high earning jobs, we are not going to be able to leave him much at all. He is going to spend a large portion of his life as an adult without us, but probably needing some kind of assistance or care. Whether or not he will ever be able to hold a proper job is still doubtful. He has an older brother, but we can't expect him to look after him all his life too.

As we worry about his life as an adult without us, all suggestions on this subject are welcome.

Thanks
Halcro

Nicki

This is an area where you really need the advice of a solicitor who is qualified in this area, and they are few and far between I am afraid. If you live near London I can tell you who we used for the same purpose. Even if you don't live near London he could probably help you just by post and email.

What you need is a discretionary trust. The important thing is to make sure that that the way in which the trust is set up does not preclude him from claiming all the state benefits and help he will be entitled to in the future. Otherwise he could well end up in the situation where he is actually worse off rather than better off, because he can probably afford to buy less for his money than the state will provide.

I have to stress again that very few solicitors understand this area of the law. I am actually a qualified solicitor myself, though don't work in this area. I had done some research before I started looking for solicitors to advise me so I knew some of the possible pitfalls. I was amazed by the number of solicitors who blithely said they could set up a trust for me, but who then added that they knew nothing of the impact it would have on my daughter future entitlement to state help because this wasn't their field. We also had a financial adviser who tried to sell us an unsuitable financial product linked to a trust, and when we pointed out to him the clear and obvious defects, he did not understand them, and refused to accept that his product was not suitable until we showed him an independent legal opinion to that effect!

If you google for Special Needs Trusts you will find some american legal sites which will give you some information. The law in the US is different to UK law, but it will give you some understanding of the questions that you need to be considering and asking your lawyer to bear in mind.

Finally, there are tax implications following the latest budget. There was no exemption made for trusts for disabled children, which I think is appalling. However I do not know what the tax implications are in full, so again this is something you need competent advice on.

Ted_Hutchinson

You may find it helpful to read the information at Mencap

[URL="javascript: void(0)"]Discretionary Trusts: A Guide for Families[/URL]
Nigel King, 2004
There is more useful information for at Housing Options