Discretionary trust for disabled person

TBagpuss

FBaby wrote: »

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.

A discretionary Trust would typically have more than one beneficiary (or potnetial beneficiary). Because it is discretionary, money from the trust does not belong to the benefificairy(s) so is not taken into account for calculating means tested benefits, and the beneficiary cannot demand that the trust is ended and they are given the money ouright.

This means that it can help protect the vulnerbale person from exploitation, as it is the trustees, not the person themself, who can chose whether to provide funds.

It would also allow for things which would enrich or improve daughter's quality of life to be funded and (if this is a possibility) could also be written so as to eventually benefit any children she may have.

OP, I'D suggest that you speak to a solicitor who is a member of STEP (http://www.step.org/)
One option may be to have your son and a trusted friend as the trustees, and to include specific provison in the rust to make clear that they can pay for suitable professional advice and services if they need to do so during the life of the trust.

I would alwys recommed having at least 2 trustees

Andypandyboy

fed_up_and_stressed wrote: »

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.

That is a very sad, ungenerous post.

Mr_Costcutter

BomereBoy wrote: »

Hi,. We have looked at Mencap Trust service but they also charge for the yearly services, and want to be sole trustee!

Yes, they do, but for many families their service does work very well.

I work voluntarily at a centre which supports children and adults with learning difficulties. I've attended various sessions for the parents' (providing for the future) and the focus is 'always' on Discretionary Trusts. I'm not sure that there is an alternative way of protecting vulnerable individuals. As already mentioned, do ensure that 'several' trustees are appointed if you choose to take this route.

Providing for your daughter's future must be a worry for you. I do wish you all the best for the future.

specialboy

fed_up_and_stressed wrote: »

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.

I agree with the above, if the ops daughter inherits enough to look after herself then why should she not use it and save the taxpayer having to pay the bills? If the boot was on the other foot and I was claiming benefits but inherited a large sum of money then I'm sure I'd be expected to pay my own way. Benefits should be there for those that need them (as the ops daughter does now)

Mojisola

specialboy wrote: »

I agree with the above, if the ops daughter inherits enough to look after herself then why should she not use it and save the taxpayer having to pay the bills? If the boot was on the other foot and I was claiming benefits but inherited a large sum of money then I'm sure I'd be expected to pay my own way. Benefits should be there for those that need them (as the ops daughter does now)

The government doesn't agree because it allows Discretionary Trusts to be set up.

Mr_Costcutter

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Sadly, many people with learning disabilities have absolutely no concept of money. They are quite unable to plan or budget.

People who are 'vulnerable' need to be protected. The OP in making provision is trying to protect his daughter in the best way he possibly can. If he wasn't as responsible, he would just spend the money and the cost to the taxpayer would be greater.

This thread should not be about 'judging' the OP, but about providing solutions to the problem he faces in the road ahead. Any of us who are not in his position should 'count our blessings'.