Before you have children, we have a reasonable expectation that they will grow up, leave home and live their own lives. But when your child has a disability that means their future independence is doubtful, your caring role is never finished. The inevitable prospect of your death, leaving them lacking care or security can be a huge worry.
If you haven't got around to thinking about this yet, it is NEVER too soon. None of us knows what's around the corner. As well as ensuring you can legally help your child in adulthood, You need to prepare for the day when you are not able to care for them yourself.
Writer and parent carer, Helen Jervis has been through this thought process herself and has written a guide for us on setting up a Disabled Person's Trust, so you can ensure your disabled young person is cared for throughout their life.
Disabled Person’s Trusts: When making a will is not enough by Helen Jervis
As parents of young people with additional needs, we worry a lot about the future and sometimes feel that we need to be immortal. Or at least to live for as long as our offspring do. Perhaps it’s my son’s vulnerability, then, that makes me particularly uncomfortable with the idea of my own death.
But I strongly suspect most people feel a similar aversion to thoughts about the end of their lives, whatever their family situation. For some, this may result in failing to plan for the future. Research by Unbiased.co.uk in 2017 revealed that about 60% of UK adults did not have a will. Perhaps people repeatedly put it off due to the uneasiness that comes with having to face their own mortality?
Making a will is so important. It not only ensures that your money, valuable items or property is inherited according to your wishes but also protects your family from unnecessary hassle at a time of bereavement. If you’re a parent, it’s wise to go a step further in your will and nominate a guardian to guarantee that your children would be well cared for in the unlikely event that they are orphaned before the age of 18. But if your child is unlikely ever to be able to make financial decisions as an adult, you should consider protecting them by setting up a trust.
My husband and I used to assume, somewhat complacently, that we had made all the necessary arrangements. We made wills soon after we were married, and I have a fantastic sister and brother-in-law who would be willing to bring up our son as their own if the worst happened to us.
But last year we were shocked to realise that simply making our son a beneficiary of money or property in our wills could adversely affect any means-tested benefits he may be eligible for as an adult - and could even leave him vulnerable to financial abuse from others trying to take advantage of him.
Our son is 11 and has a severe learning disability, autism and a language disorder. The way in which his cognitive impairments affect him means that he’s highly unlikely ever to be able to manage day-to-day money, let alone make more complex financial decisions.
According to the charity, Scope, some families try to solve this problem by leaving money to the brother or sister of the child with special needs, on the understanding that they will look after their disabled sibling. However, if the brother or sister dies, gets divorced or has large debts, they may lose control of the money they were informally holding. This isn’t an option for us anyway as our son is our only child.
Our revelation about the dangers of leaving money to our son came at a Wills and Trusts information event organised by the West Sussex Parent Carer Forum, which caught my eye despite my plan to live to at least 105(!). We learned that to financially protect our son, it’s vital to set up a trust. Our new, updated wills would stipulate that, after we have both died, our assets would pass to the trust.
A trust is a formal legal arrangement. Two or more people, known as trustees, hold money on behalf of other people, the beneficiaries, in accordance with the terms of your will. Therefore, our son will not have the burden of money management as the trustees will be in control of how it is spent. The trust is supported by a ‘letter of wishes’ which sets out guidance to the trustees on how the money should be used. The trust is initially created with a nominal amount of £10 in it and will only become fully active after we’ve both died, when our estate (property, savings, etc) will be added.
As each family’s specific circumstances are different, you will need to consult a solicitor about which type of trust is appropriate for you. We made a disabled person’s trust (DPT) – sometimes referred to as a ‘vulnerable beneficiary trust’ or ‘special needs trust’.
Setting up a trust
A DPT is set up to specifically benefit a ‘disabled person’ but can also benefit other people (‘discretionary beneficiaries’) named in the trust. The reason for including these other people is so that, in law, the assets are not left solely to the disabled person. This protects any means-tested benefits or local authority funding the disabled person is entitled to. Our parents, my sister, and my sister’s family are all listed as discretionary beneficiaries in our trust. (Trustees are allowed to benefit, but only after the disabled person has died.)
To retain the preferential tax treatment of a DPT, no more than £3,000 (or 3% if that’s lower) can be used for anyone other than the disabled person in any one year. Consideration as to exactly how the funds are used is subject to the guidance you set out in your letter of wishes, which, in our case, states that our overriding wish is for the fund to be used to enhance the quality of our son’s life.
After the information event, our next step was a meeting. We consulted a soliciotr and discussed the information to be included in our letter of wishes, such as what our son enjoys (bus/train rides, swimming, lunches out, bouncy castles…), the types of therapies and services the trust money should be spent on, and the activities that should continue. As well as paying for things that make our son happy and promote his wellbeing, funds could also be used for top-up care and respite for his guardians.
We listed all the people to be mentioned in our wills. We also chose executors for our wills and trustees to take over the trust when we die, and officially nominated my sister as guardian for our son and a close friend as a back-up guardian. We were given Mencap’s guide about being a trustee to pass to the relevant people. Mencap provides a range of excellent information and guides about wills and trusts on their website – plus a rather cute short video about trusts, featuring a cartoon piggy bank.
How is disability defined for a trust?
For the purposes of a DPT, any person of any age is defined as ‘disabled’ if one or more of the following apply:
- They are incapable of managing their own affairs due to ‘mental disorder’ within the meaning of the Mental Health Act 1983. Learning disabilities and autistic spectrum conditions are included in the Act’s definition of what constitutes a ‘mental disorder’.
- They are receiving one of the following benefits:
- Disability Living Allowance (DLA) - the highest or middle rate of the care component and/or the higher rate of the mobility component
- Personal Independence Payment (PIP) at the standard or enhanced rate for ‘daily living activities’
- Attendance Allowance
- an armed forces independence payment.
- They would be entitled to receive one of the above benefits if they could satisfy prescribed conditions as to residence or presence in the UK.
- They would be entitled to receive one of the above benefits but for being in a state-funded institution.
Our draft documents were ready within a couple of weeks We made some small alterations and additions and sent them back for amendment. The final trust deed and letter of wishes were then sent to us for signature. Once completed, they were dated, signed and witnessed. We revoked our earlier wills by retrieving them from our previous solicitors and destroying them once the new wills had been signed and witnessed.
The whole project cost us £1,175, but solicitors’ fees vary widely depending on the firm and the extent of the work involved. We feel it was well worth the outlay to prepare properly for our son’s future. The cost would have risen if we had needed to incorporate other complex trusts or provisions in our wills, or if we had needed substantial extra advice such as inheritance tax planning.
Wills and trusts is a highly specialised and complex area of law, and it is vital that you choose a solicitor with the correct qualifications, knowledge and experience. Mencap provides free advice and information about wills and trusts - and can also advise you about experienced solicitors in your local area. Phone 020 7696 6925 or email them
How do we feel now that it’s all complete? Reassured and relieved. Of course, concerns over our son’s future will always be hovering in the background; they tend to come with the territory when your son or daughter has additional needs. But setting up the trust has substantially lessened our worry over what would happen if we were no longer here to care for our son. Yes, the process was sometimes slightly unnerving because to plan effectively we had to imagine a time after our deaths. But it’s ultimately a hugely positive and empowering experience and one that we highly recommend.
Other useful contacts are:
- The Law Society: you can find a solicitor in your area by searching on the website lawsociety.org.uk
- The Society of Trust and Estate Practitioners (STEP): phone 020 3752 3700 or look on their website
- Make sure you’re in safe hands by checking the solicitor you are going to use is a member of STEP.
Mencap wills & Trust department and solicitor, Philip Warford, for his valuable assistance with the legal points in this article