Vulnerable adult discretionary trust?

Morglin

confuseddaughter wrote: »

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They can as easily be withdrawn as they are given as they are not linked to their personal contributions.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.

Universal benefits are paid via contributions, by all of us.

Means tested benefits are paid, via contributions, by all of us.

Need/circumstances dictates who gets the benefits and when, with universal or MT benefits.

Some ESA, some JSA etc., is paid in for individually.

None of it relies on the 'goodwill of the state' - the law says someone needs x amount to live on, and that's how it is worked out.

But the money doesn't fall down from the sky, nor is it charity- it comes from contributions paid in, either universally or individually.

Lin :wall:

confuseddaughter_2

cattermole wrote: »

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?!

.......to help people avoid - Inheritance Tax issues, payment for care home provisions, a deprivation calculation in respect of means tested benefits etc etc. No different than those that salt their money away abroad to avoid UK tax.

confuseddaughter_2

Indie_Kid wrote: »

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.

Sorry but of course it is. Otherwise any means tested benefits that may be in payment will stop or reduce as there is clearly capital that could be used to live off instead.

I know of someone that obtained slightly over £250,000 as compensation for injuries which meant that he was unlikely to ever work again. All of his means tested benefits were closed down as it was deemed that he had the funds to provide for himself. That was in 1998. Last year was the first year that the DWP allowed him to have his benefits back. He still has his £95,000 mortgage as he was only allowed to pay the monthly instalments and not the original capital.

Or would it have been right if that money was placed in a VPT so that he could keep it for the future AND at the same time be allowed to carry on drawing his means tested benefits ignoring that capital?

And people say that it isn't another form of 'avoidance'.

steinson

I am physically disabled and receive income related benefits my mother wants to set up a trust for me to make sure i am financialy ok when she dead. Ive heard of discretionary trusts and this sounds like what we need but i dont know how we go about setting one up. and whom to contact for help, Any ideas or help?

cattermole

Indie_Kid wrote: »

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.

The situation regarding medical negligence payouts to children is slightly different, especially if they are large amounts, the Court of Protection becomes involved, so they would be involved in the setting up of the Trust with the parents if they were appointed Deputies to the Court. The money has to be used for the purpose it was paid and detailed submissions are made on lifetime costs for specific things like housing, care, physio etc.

cattermole

Also another point that is relevant is you can't intentionally disinherit someone either to avoid care costs or loss of benefits. For example if there were three children and one was severely disabled and you decided to leave it all to the other two, this could also be seen as deprivation of capital and could lead to the Will being disputed.

If there is a property involved it might be better in some cases to leave the property in Trust so someone could continue to live in it as long as needed rather than leaving it so it has to be sold.

Mojisola

cattermole wrote: »

Also another point that is relevant is you can't intentionally disinherit someone either to avoid care costs or loss of benefits. For example if there were three children and one was severely disabled and you decided to leave it all to the other two, this could also be seen as deprivation of capital and could lead to the Will being disputed.

It couldn't be deprivation of capital because the disabled person wouldn't ever have had the money in the first place.

If the parents were financially supporting their disabled offspring, then the will could be challenged on that basis.

cattermole

steinson wrote: »

I am physically disabled and receive income related benefits my mother wants to set up a trust for me to make sure i am financialy ok when she dead. Ive heard of discretionary trusts and this sounds like what we need but i dont know how we go about setting one up. and whom to contact for help, Any ideas or help?

http://www.dls.org.uk/

They also have produced a factsheet here:

http://www.dls.org.uk/Advice/factsheet/general/a_guide_to_trusts/A%20Guide%20to%20Trusts.pdf

One of the other problems of the Trust is who the Trustees are going to be and that needs to be given careful thought.

cattermole

Mojisola wrote: »

It couldn't be deprivation of capital because the disabled person wouldn't ever have had the money in the first place.

If the parents were financially supporting their disabled offspring, then the will could be challenged on that basis.

Yes sorry I used the wrong terminology, but it applies to adults with limited capacity as well. The Local Authority can be the Litigation Friend and contest the will.

rogerblack

cattermole wrote: »

Also another point that is relevant is you can't intentionally disinherit someone either to avoid care costs or loss of benefits. For example if there were three children and one was severely disabled and you decided to leave it all to the other two, this could also be seen as deprivation of capital and could lead to the Will being disputed.

Err - no.
As I understand it, this isn't correct.

There are several different, interrelated, but not unified bits of law that interact.

Firstly - if you intentionally alter the will post death, or arrange to not get the money you would otherwise have gotten - then this may be deprivation of capital.

Secondly - laws in the area of what it's legal to give your children vary across the UK.

Thirdly - while in principle it may be possible for the DWP/council to treat you as having the capital you would have had if you challenge the will, if you were to be disinherited - the same may not be the case if instead of being disinherited - a properly setup trust was made.

There is no obligation on the behalf of the deceased to arrange their will in order to support the state. Just to support the child. If this is done by a properly setup trust - the will is much less challengable.