Inheritance

Louisekate

My sons and neice have inherited a very large sum of money between them, to be held in trust until the age of 21. My son has severe learning disabilities and is likely to never have the ability to take care of his finances once he's an adult. Does anyone have any advice regarding investing such a large amount of money, particularly when there is a disabled person involved? Can this affect this benefits and entitlements once he's an adult? Thank you!

theoretica

I'm afraid I don't know the details, but in my family there is a trust fund set up by a lawyer but with members of the family as trustees running it. It is officially 'for the descendants of X...' but everyone understands that only one person applies to it - a person who has mental disabilities.

jamesd

Since it's a very large amount (I assume many hundreds of thousands or millions) then you might do well to consider splitting the money so that two different advisors handle the management of the investments, each having half of the pot. There are a large number of investment options available and if you're not already familiar with them it's probably best to seek the advice of an Independent Financial adviser (IFA, all three words, not just the last two are important). A lawyer would also be required. There are specific trust types designed for those who are incapable of managing things themselves and those are advantageous compared to general trusts. Do not go to a bank for advice on this, it's outside their specialty even if they try to offer products for it.

Yes, benefits and entitlements could be affected, depends on the specific ones.

Loughton_Monkey

There are definitely two distinct issues here, that can be generally taken seperately.

The first issue is one of optimising the use of Trusts for the benefit of your disabled son. I strongly suggest this is a serious legal issue, and as such, you should take it to a competent solicitor.

Investing the money is an entirely seperate issue (I feel). This can very largely be taken on its own. Considerations will include 'timing'. In other words, it would be unreasonable to pass on assets to the inheritors, at their respective 21st birthdays, that were 'locked up' in bonds that couldn't be cashed...

But, again, possibly a case for a professional IFA.

I endorse the comment that under no circumstances should you seek (or take) investment advice from a High Street Bank. They do have "Trust Companies" which would - on paper - appear to be a compelling 'one stop shop' for all your needs. But they are extremely expensive and will not usually be able to give good 'independant' Financial Advise.

Louisekate

Has anyone got any advice on investing in offshore bonds please? Our FA is reccommending investing our children's inheritence purely in offshore bonds and I want to clarify this is good advice. they are currently 7 and 10 and the money will be held in trust until they are 21 respectively. My eldest son is severely autistic and is unlikely to understand the amount of money he will inherit and will probably never be able to work once reaching adulthood so I don't want his benefits affected.

crazyguy

He will most likely have benefits affected as if he has a large amount of money then they will of course look at this and award any amounts accordingly.

Ark_Welder

A few links with information. the FT article has a less-favourable view

http://www.whichoffshore.com/offshore-wealth-management/offshore-bonds
http://www.pru.co.uk/investments/bonds/international/offshore_tax/

http://www.ft.com/cms/s/2/91871654-180b-11df-91d2-00144feab49a.html#axzz1TZeGcJx7

darkpool

Louisekate wrote: »

My eldest son is severely autistic and is unlikely to understand the amount of money he will inherit and will probably never be able to work once reaching adulthood so I don't want his benefits affected.

the whole point of benefits is that they go to people that actually need them.

dzug1

In the case of a trust there is a legal requirement to take appropriate advice on investments - asking here would not in itself constitute taking appropriate advice, though it might help you understand any professional advice received.

theoretica

In our case the benefits are not affected because the money does not belong to the disabled family member, and never has. It was left in Granny's will to a trust to which several people could apply- but only one does. While consulting a lawyer you might want to see if the will in question could be altered (if all beneficiaries agree) to something that would have a similar protection.

Newly_retired

My parents left money half to me and half in trust for my sister who is not capable of managing her financial affairs. Two family members are trustees and the investment was set up by an IFA. It produces a specific amount of annual income for my sister which is in line with her benefits. She is not deemed to possess the lump sum as it is invested with the trustees. One of the trustees is her daughter who has Power of Attorney for her so she is able to provide small sums for clothes, trips etc as required, without affecting her benefits and still being legal.