Trust and will advise for vulnerable child

arctictern

I need to make a will and possibly a trust too. 

We have an autistic daughter who may have  difficulties managing their finances. 

A small inheritance from her aunt together with the majority  of funds from me purchased a property in my name for her to live in after our deaths. I receive the rental income with her proportion put into a pension. 

We our in our 70’s, have two other children and our estate is liable for inheritance tax. 

I  need to ensure my daughter gets  this property on my death. Obviously want to treat other siblings fairly (they would accept money to their children as reasonably fair)  

1. Gift her the property now. Simple and would reduce inheritance tax liability.  But I would lose my portion of the  rental income and I would have to sort the tax, bills etc and ongoing her siblings responsibility. We cannot afford to give our other two children a similar sum as want to keep sufficient funds to cover care costs if required but hopefully enough to equalise the situation on our deaths. 

2   A discretionary trust. Property  outside my estate and it would revert to our other children (if alive) and grandchildren on her death. I believe I could have some of the rental income in this case.  The taxation is complicated and this would be a burden both financially and in time for me initially and then her siblings. 

3 Disability Trust. I am not sure if my daughter would qualify. The taxation is favourable but there would be administration. I would lose the rental income. Her siblings (if alive) and my grandchildren would benefit on her death. 

Apologies for lengthy post. 

I would appreciate any comments or alternatives so I am prepared when I see a solicitor. 

Keep_pedalling

You need to see a solicitor. Was the inheritance from her aunt an absolute gift? If so and she is an adult then the money is hers to with as she wishes and unless you have deputyship for her you don’t really get a say you can only advise.

If you have in excess of £1M of assets why do you need to factor in receiving rent? 

arctictern

Thank you.

Yes I won’t need the rental income going on. It was being used for medical treatment which will soon cease. 

The inheritance was a gift and she was pleased for it to go for a house for her. She is intelligent but has been over generous to “friends” in the past so needs some help. 

Pennylane

A couple of thoughts.  Is your daughter on any benefits?  Where does she live now ….. with you?
I am sure your other kids are away that she may need more support and security when you have gone.  

arctictern

Pennylane said:

A couple of thoughts.  Is your daughter on any benefits?  Where does she live now ….. with you?
I am sure your other kids are away that she may need more support and security when you have gone.  

Thank you for your reply. My daughter lives with us and has a part time job so is not currently on benefits. Yes you are correct her siblings understand the situation so perhaps I am worrying too much. I will put the property into trust and then see how everything works out. 

theoretica

A trust could either be set up now, or in your will.  Worth getting advice on the management and tax differences of the two actions.

Pennylane

arctictern said:

Pennylane said:

A couple of thoughts.  Is your daughter on any benefits?  Where does she live now ….. with you?
I am sure your other kids are away that she may need more support and security when you have gone.  

Thank you for your reply. My daughter lives with us and has a part time job so is not currently on benefits. Yes you are correct her siblings understand the situation so perhaps I am worrying too much. I will put the property into trust and then see how everything works out. 

If your daughter works less than 16 hours a week she can still claim benefits.