How can a Disabled Persons Trust help me?
Do you have a family member who is mentally/physically handicapped? Their care is hugely important, and this needs to be considered for when you are no longer around. The Disabled Persons Trust will enable you to leave your assets in a controlled settlement, with people who will have the ability to make all financial decisions for them. There are huge disadvantages in gifting assets to a disabled child/person and this Trust helps avoid many of them.
Leaving a simple Will in the hope that ‘everything will be alright’ can have a disastrous effect; here’s a list of the disadvantages of not using a Disabled Persons Trust:
- Benefits from the Benefits Agency being stopped.
- Entitlement to Local Authority funding being stopped.
- A Receiver from the Court of Protection having to be appointed to manage the affairs of the disabled person. This can be very expensive and may not act as you or the disabled person may want it to.
- The estate being subject to a much harsher tax treatment.
Including this trust within your Will can ensure that you make provisions for added luxuries and extras that you would want your disabled child (family member) to have e.g. holidays, particular equipment to help enhance their way of life.
This Trust enables you to secure the future of your disabled family member who is unable to look after their own affairs and to protect them.
The benefits of a Disabled Persons Trust:
- The disabled beneficiary is not legally entitled to the assets that have been placed into the Trust. This means that the benefits they are receiving are not adjusted or stopped as this money is not taken into account when looking at what that disabled person owns.
- Trustees have full discretion in applying the income/capital for the benefit of the disabled person. This means the Court of Protection won’t need to appoint a Receiver to manage their affairs as the Trustees will be doing this through the Trust.
- There is no tax charge on payments for the benefit of the disabled person! This includes anniversary and exit charges.
- You can leave a Letter of Wishes to the Trustees to explain why you have set up the Trust and what you would like to achieve including explanations as to what the money should be spent on.
- Trustees have discretion, which means that they can adjust to deal with the affairs of the disabled person and their changing circumstances e.g. money required for the payment of medical bills.
- The Trustees also have the ability to adapt to a change in legislation that we cannot predict.
- The Trust enables you to give the Trustees the ability to give your family member the best possible care and to make arrangements for their future so their lives can be enhanced and the quality can be maintained.
Cedar Wills & Trusts is an Estate Planning business, specialising in Disabled Persons Trusts (Special Needs Trusts).
