Planning and executing a Will can become stressful, particularly if there are vulnerable people of whom you wish to benefit. You may not wish for them to have an outright gift, or perhaps you are worried about care fees.
We recently saw a family who has four children, one of whom is disabled. They wanted to benefit their disabled child to the same degree as the other three but had strong concerns about care fees, and who would look after the money for their child.
Trusts are a great way to protect vulnerable and/or disabled beneficiaries. With discretionary trusts the beneficiary is not automatically entitled to the income or the capital of the trust fund. As such when applying for means tested benefits, the trust fund value will not be taken into consideration. If on the other hand you make an outright gift to an individual, this would be taken into account when assessing means tested benefits, as they are deemed to own that amount. Therefore the amount of inheritance received would first have to be used towards care fees before the government would cover the care fees.
The same concerns can apply to a beneficiary who may be suffering from alcohol or drug dependencies. You may not wish to directly cut them out of your Will, but at the same time you want peace of mind that they will use their inheritance appropriately.
In such a situation you could put a house into trust for their lifetime, being assured that they will have a home for their lifetime. At the same time they would not be able to sell the house and release funds without the consent of the trustees.
It is important to take careful and considered legal advice on these issues and our Wills and Estate Planning specialists are here to help.
If you have a query or would like to book an appointment please get in touch with our First Contact team on 01256 320555 or email firstname.lastname@example.org