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Newark & Sherwood Autism Support Group

Training Courses - Wills and Trusts

  

Notes on Seminar “Wills and Trusts when beneficiaries include those with disabilities”

Loughborough. Tuesday 28th February 2017.       

Must make a will!!     

Seek legal advice for which option(s) would be best for you and your circumstances.    

Options:

1.  Do nothing

Likely to involve ‘Court of Protection’ for any inheritance – set up fees £2-£4 thousand

If greater than £16,000 then means tested benefits affected

  2. Gift to another

Relative inherits moral but NOT legal obligation to look after interests of disabled child

They can run off with the cash!

If greater than £16,000 then means tested benefits affected

3. Lifetime Trust

Inherit to your chosen trustees for the benefit of the disabled child alone.

No other beneficiaries

If greater than £16,000 then means tested benefits affected

4. Discretionary Trust

Probably BEST OPTION

All or a proportion of estate/inheritance given to trustees to look after - capital and income.

(If two children, one disabled and one not, then half estate can go directly to non-disabled child with other half going into discretionary trust)

Multiple beneficiaries required such as

- Disabled child (PRIMARY BENEFICIARY)

- Grandchildren

- Charity

- Non-disabled child(ren)

Multiple beneficiaries means that the disabled child is NOT the sole person benefitting.

In which case, means tested benefits are NOT affected since the trust cannot say exactly what proportion of the trust is solely for the disabled child.

 

Inheritance tax

If greater than £325,00 then taxable at 40%.  Less than this – no inheritance tax

For a married couple who leave their estate to each other within a formally approved will, upon death of both the threshold rises to £650,000 above which 40% tax is due

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