Discretionary trust for disabled person

edited 30 November -1 at 1:00AM in Disability Money Matters
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BomereBoyBomereBoy Forumite
1 Post
edited 30 November -1 at 1:00AM in Disability Money Matters
Hi,
We are reviewing our wills and have a daughter with learning difficulties, who would be unable to manage any inheritance.
We seem to have a "catch 22" where if we leave any money outright to her, she would lose her benefits and/or the council could use her inheritance to pay for sheltered accommodation etc.
So, it has been suggested we leave her legacy in a Discretionary Trust, with my son as trustee. However he has no financial background and may not be able to act without professional help. This, of course, costs money and may quickly drain the value of the legacy. We have looked at Mencap Trust service but they also charge for the yearly services, and want to be sole trustee!
Does anyone have any experiences in this area which may help to guide us, please?
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Replies

  • kazzahkazzah Forumite
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    could you ask a friend who might be more savvy than your son ?
    an aunt /uncle?

    Although I believe that you can run a bare trust very easily - the funds are invested - perhaps in bank or building society bonds or ISA's and your son would be able to make withdrawals for your daughters needs - I don't think you need to be particularly financially adept at investing funds or anything.

    if investing the funds is an option or what you are after then an independent financial advisor could give information on investments and your son can simply disburse funds as necessary.
  • kingfisherbluekingfisherblue Forumite
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    Do you have a trusted friend who can be joint trustee with your son? Or a cousin or other relative?
  • missbiggles1missbiggles1
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    Unless this is something quite urgent, why not educate your son in the sort of things he's likely to need to know to fulfill this role and your wishes?
  • fed_up_and_stressedfed_up_and_stressed Forumite
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    BomereBoy wrote: »
    Hi,
    We are reviewing our wills and have a daughter with learning difficulties, who would be unable to manage any inheritance.
    We seem to have a "catch 22" where if we leave any money outright to her, she would lose her benefits and/or the council could use her inheritance to pay for sheltered accommodation etc.
    So, it has been suggested we leave her legacy in a Discretionary Trust, with my son as trustee. However he has no financial background and may not be able to act without professional help. This, of course, costs money and may quickly drain the value of the legacy. We have looked at Mencap Trust service but they also charge for the yearly services, and want to be sole trustee!
    Does anyone have any experiences in this area which may help to guide us, please?

    So lets get this straight in effect you are asking how can I get the Taxpayer to pay for my daughters accomodation whilst she will be sitting on a nice nest egg ? That I don't want her to "waste" on essentials.
    Spelling courtesy of the whims of auto correct...


    Pet Peeves.... queues, vain people and hypocrites ..not necessarily in that order.
  • nobby1963nobby1963 Forumite
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    So how do you get from the OP original post to implying he is some sort of scrounger ?

    Some people on here seem to be poised to pounce at anything!

    Why can't you just think before typing?

    Nobby.
    SMA 4000TL Inverter, 17 REC 235PE Panels, South facing, roof angle \ `ish, 3995 watt system.Installed Nov 2011.
  • kazzahkazzah Forumite
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    So lets get this straight in effect you are asking how can I get the Taxpayer to pay for my daughters accomodation whilst she will be sitting on a nice nest egg ? That I don't want her to "waste" on essentials.

    REALLY ????????????????
    that is the best you can come up with ?
    the benefits system was intended to support people like this persons daughter- the ill, vulnerable, those who are unable to care for themselves - the OP has probably SAVED the tax payer THOUSANDS by caring for their daughter rather than place her in the "care system" - I notice you don't mention that.

    I am sure any inheritance would soon be swallowed up by "accommodation " costs and so the burden would pass to the taxpayer eventually anyway - at least this way she is able to have recourse to some funds of her own for the purchase of necessities, little things, like clothes, personal items etc.

    your attitude really makes me sick - go and spread your small mindedness elsewhere please.
  • MojisolaMojisola Forumite
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    So lets get this straight in effect you are asking how can I get the Taxpayer to pay for my daughters accomodation whilst she will be sitting on a nice nest egg ? That I don't want her to "waste" on essentials.

    These trusts are allowable by the government, just as it's fine to avoid paying inheritance tax by changing a will after someone's death, to give just one example of how those with lots of money are able to keep more money to themselves.
  • BucksLadyBucksLady Forumite
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    So lets get this straight in effect you are asking how can I get the Taxpayer to pay for my daughters accomodation whilst she will be sitting on a nice nest egg ? That I don't want her to "waste" on essentials.

    At first this post made me angry and then incredibly sad. As the sister of a disabled person who is in the same position as the OP's daughter, let me tell you that really you haven't a clue. You obviously know nothing of the heartbreak of having a child who is so vulnerable, and nothing of the worry about ensuring that your child will be safe and cared for when the time comes and you are no longer around.

    OP, my parents have set up a discretionary trust for my sister which has several trustees - family members and a family friend. They explored a number of options and found this to be the best for them. I do hope you find the advice you require.
  • FBabyFBaby Forumite
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    I don't get the advantage of a discretionary trust. Does this mean that whoever has access to it can then buy whatever they want out of it for the beneficiary person without questions from the benefit agencies, for how long as it is place?

    If that is the case, then surely it is not much different to tax avoidance, ie. doing something legal to avoid what the system is intended for, ie. what would normally be potentially considered deprivation of capital if not a spent considered a reasonable essential need.

    Therefore I don't understand the outrage that this is morally ok, at least no more than any other means for the purpose of tax avoidance.
  • kazzahkazzah Forumite
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    the advantage of the trust is that the funds are disregarded for means tested benefits - so yes, in a way it enables a person to still obtain access to means tested benefits which ordinarily might be denied them.
    BUT - these types of trust can only be set up with a court order and it must be proven that the person whose trust it would be IS actually vulnerable and unable to make decisions surrounding their finances.

    For example - a vulnerable person whose inheritance was NOT in trust and who had access to the money could potentially be a target for unscrupulous people and hand over all their money - in which case the result would be the same - the persons would STILL be in receipt of benefits. So where is the difference?

    It isn't JUST about avoiding a benefits sanction - it is about protecting the trust holder when the parents have died - believe me, if you had a child who was vulnerable- you would be glad that such an option exists.
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