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How to set up a Will Trust for a Disabled or Special Needs Person

James Watkins - Law on the Web

  1. 18 November 2015
  2. Wills and Probate
  3. 0 comments
Youngster on piano

A Will Trust is a way of passing on assets after you die. They have a number of uses, such as reducing Inheritance Tax and providing for children who are too young to manage their own finances.

You could also use one if you want to leave your money and property to someone who has special needs or a disability – if set up correctly, you can give them financial security without compromising their access to certain benefits.

Why set up a Will Trust?

The normal way to arrange to pass on your money and assets is through a Will – this is a straightforward way to make sure that your family and others close to you have some extra financial security, particularly if they have a disability or other special needs.

However, if you leave a significant sum to a disabled individual, they could be left too much money to qualify to receive Disability Living Allowance (being replaced by Personal Independence Payment) or other disability benefits.

By keeping the money in a trust, you can avoid this, while still making it possible for them to access this money to pay for things their benefits might not pay for – equipment to improve their quality of life, for example, or even just something like a holiday.

Setting up a Will Trust also allows you to appoint “trustees” who can manage the trust if the disabled individual does not have the mental capacity to do so. If you leave the money straight to them, the Court of Protection could appoint someone to manage the money for them, causing them further cost and unnecessary delays.

How do they work?

There are a number of different types of trust – a discretionary trust is most likely to be appropriate for leaving money and assets to a special needs person. The trust can be set up as part of your Will.

In this arrangement, trustees are appointed to make decisions about the trust. Exactly what decisions they can make will depend on the terms of the trust deed, but generally this will mean that the trustees decide when money can be taken out and used.

The trustees will also be responsible for managing the estate and ensuring that any tax is paid (deducted from the estate).

This sort of arrangement is ideal if the beneficiary of the trust can’t make their own decisions about how to use the money themselves.

How do I set a Will Trust up?

You should always get legal guidance to set up a Will, and this is particularly true if you are setting up a trust. Our Will Writing service can put together a Will containing a trust for only £300, or £480 if you are looking to set up multiple trusts.

You will need to choose your trustees – you should appoint more than one, 2-3 would be recommended. You will need to think carefully about who you trust to take on this responsibility, and whether they understand what they will be required to do.

You can also appoint a solicitor or a bank to be a trustee, for a fee.