Leaving money to someone with a learning disability.
A very real concern of parents or guardians who have an adult child with disabilities is how to provide for them financially once they themselves have passed away. If you have a loved one with a learning disability, setting up a Will trust gives you and your family peace of mind that your loved one can continue to receive the financial support and personal care they require. For a vulnerable adult i.e., someone who is unable to manage their own finances themselves, one of the best mechanisms to use is a Will trust – a legal wrapper that holds the money or asset.
Disabled Persons Trust explained.
A Disabled Persons Trust (DPT) or Vulnerable Persons Trust is a way of ‘ring-fencing’ assets for a beneficiary with a physical and/or learning disability ensuring their means-tested benefits remain unaffected. It is often used to provide protection to the money or assets held within the trust and also to ensure if you have a loved one who is disabled, that they will be financially protected and provided for. By creating a DPT, you pass the decision of how and when the trust will be distributed over to trustees (these are the people you appoint to manage the trust) who will use their discretion, over how and when to release your beneficiary’s inheritance.
Advantages of a Disabled Persons Trust.
Contrary to popular belief, a trust’s primary purpose is not mitigating tax, but it is first and foremost a way of separating ownership into two types of ownership – the legal ownership and the beneficial ownership. If a beneficiary has an illness or a disability that affects their capacity, assets held in trust for them can be used for their benefit without them becoming the legal owner of the assets. A trust is particularly useful when you wish to protect a loved one who may be vulnerable or unable to manage their own finances by providing them with a safe and secure financial future.
Trustees and Disabled Persons Trusts
A DPT is a Trust set up to specifically benefit a ‘disabled person’ and is largely discretionary in its nature this means the Trustees are in control of how the Trust will be administered in the same way for Discretionary Trusts.
The Trustees have a lot of flexibility and discretion as they will decide which beneficiaries will benefit from the trust fund and to what extent. As the trust is discretionary, the beneficiaries do not have an absolute right to the trust fund, only the potential to benefit from it. This is particularly helpful as it means that the trust fund is not taken into account if the beneficiaries are in receipt of means tested benefits.
Setting up a Disabled Persons Trust
Affinity Trust have negotiated a preferential rate with our trusted partner Bequeathed. To find out more about setting up a Disabled Persons Trust with Bequeathed please click here:
Alternatively, if you have a specific question about setting up a Disabled Persons Trust, you can get in touch by completing the following form:
For frequently asked questions, click here
For Useful links to further information, click here