Vulnerable adult discretionary trust?

rogerblack

confuseddaughter wrote: »

Thanks, but surely if the person was to spend the inheritance at the same rate that they were receiving benefits the DWP couldn't raise any argument and once the capital was below the upper limit, they would have no problems being awarded it again.

You are assuming that all benefits are easy to apply for, and will not require an appeal to be gone through.

Plus, most people giving an inheritance do not give it with the aim of making no difference whatsoever to the life of the person they are giving it to, apart from more paperwork.

confuseddaughter_2

rogerblack wrote: »

You are assuming that all benefits are easy to apply for, and will not require an appeal to be gone through.

Plus, most people giving an inheritance do not give it with the aim of making no difference whatsoever to the life of the person they are giving it to, apart from more paperwork.

Thankyou, but if the claim is genuine I can't see why it would be refused. Yes you will have to go to an appeal, maybe, but it will get sorted.
You are seeming to say that anybody on a means tested benefit should get some benefit out of an inheritance. They do don't they? They become able to look after themselves financially instead of being dependant on the goodwill of the state.
People surely can't have their cake and eat it, getting hundreds a week in benefit payments on the basis that they can't support themselves yet be allowed to hoard thousands because 'Aunt Jenny' would turn in their grave if any of the money she handed over was used to provide an income for them to live off?

rogerblack

confuseddaughter wrote: »

People surely can't have their cake and eat it, getting hundreds a week in benefit payments on the basis that they can't support themselves yet be allowed to hoard thousands because 'Aunt Jenny' would turn in their grave if any of the money she handed over was used to provide an income for them to live off?

I am pointing out the law.
In exactly the same way that someone making a will can act to minimise the effect of inheritance taxes, so as to maximise the amount of benefit to somebody getting a bequest, they can act to minimise the effects on benefit.

'yes you may have to go to appeal' - which may take a year. With no money left.

louBlou21

I think the purpose of the legislation that allows a disabled person in receipt of benefits to have funds in a trust is that it provides a safeguard so that the person can't be tricked or pressured into giving the money away. You can use the money for other things such as extra care or equipment, for example my last powered wheelchair cost £4k which was not provided by anyone and I had to find the money myself. Many things people think are just given to you but in fact have to bought privately.

confuseddaughter_2

louBlou21 wrote: »

I think the purpose of the legislation that allows a disabled person in receipt of benefits to have funds in a trust is that it provides a safeguard so that the person can't be tricked or pressured into giving the money away. You can use the money for other things such as extra care or equipment, for example my last powered wheelchair cost £4k which was not provided by anyone and I had to find the money myself. Many things people think are just given to you but in fact have to bought privately.

I don't think that having money in a VPT is anything to do with being protected against doorstep cold callers that demand £15,000 for a roofing job.
It is more to do with avoidance. Avoidance of it being taxed, avoidance of it being part of your estate for IHT purposes and finally avoidance for it to be used in calculations of any means tested income assessments for benefits or care responsibilities. Much the same as those that try to hide their capital wealth and income in banks situate in tiny islands on the Pacific or Indian Oceans

Morglin

confuseddaughter wrote: »

Thankyou, but if the claim is genuine I can't see why it would be refused. Yes you will have to go to an appeal, maybe, but it will get sorted.
You are seeming to say that anybody on a means tested benefit should get some benefit out of an inheritance. They do don't they? They become able to look after themselves financially instead of being dependant on the goodwill of the state.
People surely can't have their cake and eat it, getting hundreds a week in benefit payments on the basis that they can't support themselves yet be allowed to hoard thousands because 'Aunt Jenny' would turn in their grave if any of the money she handed over was used to provide an income for them to live off?

"goodwill of the state"??????

What are you raving on about now?

Anything paid for, by the state, is as a result of contributions, paid by us all.

The state isn't, and never has been, some sort of charity.

Anyone receiving means tested benefits has to declare anything over the threshold, but anyone on contributory or universal benefits, can continue claiming as before - because the claimant has paid for them.

Lin :wall:

confuseddaughter_2

Morglin wrote: »

"goodwill of the state"??????

What are you raving on about now?

Anything paid for, by the state, is as a result of contributions, paid by us all.

The state isn't, and never has been, some sort of charity.

Anyone receiving means tested benefits has to declare anything over the threshold, but anyone on contributory or universal benefits, can continue claiming as before - because the claimant has paid for them.

Lin :wall:

Do you always have this attitude to people?
I agree, contributory benefits such as the state pension are based on a person's NI contributions.
There are some other benefits that are paid on the basis of illness/disability such as Industrial Injury, DLA, PIP, AA and Carers.
The rest are paid based on a means tested system.
The person who started this letter stated:


.....receive both income related benefits (esa, hb, ctb), dla, and financial support to employ carers (dp, ilf).


Those benefits highlighted are not based on contributions so I don't know where you get the idea from that they are?

The 'State' provides for these benefits out of the money paid in by all of us. They are goodwill payments.

They can as easily be withdrawn as they are given as they are not linked to their personal contributions. They are payments commonly known as a 'safety net' to try to ensure that those who have no or little other income do not fall into the trap of continuing and increasing poverty. They have their history in the Poor Laws as organised by the parishes instead of central government up until 1948.
You cannot equate, say the State Pension, as even being in the same category as say HB, CTB or even IS.

cattermole

confuseddaughter wrote: »

I don't think that having money in a VPT is anything to do with being protected against doorstep cold callers that demand £15,000 for a roofing job.
It is more to do with avoidance. Avoidance of it being taxed, avoidance of it being part of your estate for IHT purposes and finally avoidance for it to be used in calculations of any means tested income assessments for benefits or care responsibilities. Much the same as those that try to hide their capital wealth and income in banks situate in tiny islands on the Pacific or Indian Oceans

What nonsense!! A severely disabled person particularly with limited capacity clearly needs protection!! Why an earth do you think MENCAP provides specialist services to help families regarding wills and Trusts?!

Indie_Kid

confuseddaughter wrote: »

I don't think that having money in a VPT is anything to do with being protected against doorstep cold callers that demand £15,000 for a roofing job.
It is more to do with avoidance. Avoidance of it being taxed, avoidance of it being part of your estate for IHT purposes and finally avoidance for it to be used in calculations of any means tested income assessments for benefits or care responsibilities. Much the same as those that try to hide their capital wealth and income in banks situate in tiny islands on the Pacific or Indian Oceans

It's nothing to do with avoidance. I used to know someone a few years younger than me who is severely disabled and her parents sued the NHS because of the problems with her birth. The money they won has been put into a trust. The idea being that they have the money they need to pay for the care she needs for the rest of her life.

insured

Roger Black is correct here and the link provided has nothing to do with the benefit situation.
The link provided explains the taxation treatment of trusts for vulnerable beneficiaries and not the situation for means tested benefits. Exactly the situation described by Indie Kid, except the parents would have diverted the funds because it was a child.
Perhaps it is because a PI award would not benefit the injured party because it would affect means tested benefits.




The situation is that your father, instead of placing the money in a trust, left you the money outright. That means, even if you choose not to accept the inheritance will be regarded, for benefit purposes as still having the money. No deeds of variation etc can alter the situation for benefit purposes.
For taxation purposes you can alter the destination of the legacy.
You cannot turn back the clock now, and the best you can do is to make your life comfortable until the funds drop to a level where means tested benefits can be claimed.
For some reason, and I have never been able to understand why, a trust set up when a personal injury award has been made, does not affect benefits. ie even though the injured party can direct the PI award to a trust, it is disregarded for means testing.