Protecting Vulnerable People with Trusts
Protecting vulnerable people with Trusts is of paramount importance. But, who are vulnerable people?
The list is wider than you may think; in essence it is everyone who needs some form of protection to ensure that their needs are protected without compromising their current arrangements.
- Anyone who is in receipt of means tested benefits
- Anyone with learning difficulties or a disability
- Anyone who has bankruptcy problems
- Anyone who has addictions
- Anyone who is getting divorced or who is having matrimonial problems
- Anyone who is concerned about mitigating residential/nursing home fees
- Protection of young children or children from a previous relationship
- Anyone who cannot be trusted to deal with their own affairs
What Can I Do?
By ensuring that your own affairs are in order you can protect the people you care about.
A trust may be created either in your lifetime or within your Will and should be individually tailored to suit your needs.
What Is A Trust?
A Trust is created when you ask people you trust (the Trustees) to hold assets for the benefit of someone else (the Beneficiaries), perhaps your children. The Trustees will hold, invest and manage the assets for the benefit of the Beneficiaries in accordance the terms of the trust and subject to their duties as Trustees.
The Trustees will also be responsible to deal with the administrative tasks such as registering the Trust with HMRC on the Trust Registration Service and to file tax returns and prepare accounts, where appropriate.
Throughout the duration of the trust, it is open to the Trustees (subject to the terms of the Trust) to use their discretion to make payments of capital and/or income out of the trust to beneficiaries who might need it for education, maintenance or their general benefit. Therefore, they can be quite flexible in when provision is made for the Beneficiaries.
How Can A Trust Help?
Bereaved Minor Children
Everyone dreads the thought of leaving young children alone in the world and a trust in a Will can make sure that monies are invested and kept safe until an age that you consider appropriate for your children to inherit.
Disabled Person’s Trusts
Disabled Person’s Trusts are a useful way of providing for a Disabled Person who may not be able to hold assets themselves and without affecting their means tested benefits.
Protection of means tested benefits
If your loved one receives means tested benefits, then any funds you leave them may compromise their entitlement. The effect may be that their benefits will cease and only when their money falls below the threshold will their benefits begin again.
By placing their inheritance into trust for them you can ensure that your money can be used for their care, rather than simply replace the benefits they may be currently receiving
If someone you care about is having matrimonial or financial problems, then leaving money directly to them may not be a good idea as it could be included in the divorce settlement or taken by their Trustee in Bankruptcy.
By leaving funds in trust you can ensure that your money is protected and can be distributed when it is safe to do so.
Co-owners of property may wish to protect their share of the property for their children (or other beneficiaries) to protect it against the surviving co-owner’s possible future remarriage or the effects of their long-term care.
This is a simple but effective way of preserving something for your family.
Everyone has heard sad stories of children being disinherited through remarriage. A trust can protect both partners whilst still ensuring that their own children can still benefit from their own parent’s estate.
Tenancy in Common
Sometimes it is necessary to change how property is owned, perhaps to give effect to the appropriate trust or to reflect the unequal shares of ownership and set out how the net proceeds of sale should be dealt with on sale or death. We can advise if severance of the joint tenancy is needed to achieve the trust’s desired effect.
How We Can Help
For further information regarding the above or if you would like to discuss a Wills & Probate related query with one of the team, please call us on 0800 011 6666 or e-mail the team at firstname.lastname@example.org.