Inheritance and Benefits (Disabled persons trust?)

LilElvis

You need to ensure that the solicitor your Nan is using is STEP registered. This is vital if the will is going to incorporate the setting up of a trust.

https://www.step.org/about-us

Mojisola

KJ2886 wrote: »

Thanks for the replys, she's looking at roughly £80k (1/3 of a house with other relatives)

Your Nan could leave you and your sister your Mum's 1/3 and trust you to spend it on your Mum as and when she needs things.

Of course, if either of you are claiming means tested benefits, it's not a good idea.

xylophone

It would be possible to set up a discretionary trust for a vulnerable beneficiary ( as defined in link below) with you and your sister as Trustees.

Your mother would have no absolute right to benefit from the Trust - any disbursement would be at the discretion of the Trustees.

https://www.pricebailey.co.uk/blog/discretionary-trusts/?gclid=EAIaIQobChMIqtSk9NL_4gIVyPZRCh3Z7QhEEAAYAiAAEgI4Q_D_BwE

Trustees pay tax at trust rate on any income received from deposit interest/dividends arising from Trust capital but there are special rules where such income is paid to a vulnerable beneficiary.

https://www.gov.uk/trusts-taxes/trusts-for-vulnerable-people

If the money was simply held in an account paying no interest, then clearly there would be no income.

It would be possible to disburse capital/use capital to purchase items for the use of the beneficiary.

However, if the capital were not earning any form of income, there could be some question as to whether the Trustees were acting properly to protect trust assets.

The OP/her sister should perhaps accompany their grandmother when she sees the solicitor (make sure it is a STEP solicitor) so as to discuss the best way forward.

KJ2886

Thanks all for the advice, I'll be going to the solicitors so will be asking them too
I'm on means tested benefits but my sister isn't so need to see if the tax implications etc or having a trust in general would be an issue
Prefer to manage it ourselves within the family than have like mencap do that but will consider that as an option too