How do I best protect my family when I’m gone?


Posted by Laura Richards, 19th June 2019
It’s a question we hear all the time. We regularly see clients who want to make provision for a person within their family who is vulnerable and may not be able to deal with their own affairs.

We often advise these clients to set up a trust. This way, the vulnerable person can still have access to funds left for them, but there is an added layer of protection by the trustees. The trustees’ role is to ensure that the money in the trust is being used for the benefit of the beneficiaries of the trust. This can help prevent unscrupulous people from being able to take advantage of a beneficiary who may, due to ill health, mental incapacity or age, not realise what is happening.

We often administer trusts for beneficiaries who, due to mental incapacity or learning difficulties which limit their capability for work, have been cared for their whole lives by their parents and have not had to ‘fend for themselves’ until their parents died. We are experts setting up arrangements which can help these people when this inevitable and sad event happens. We work closely alongside families to ensure that adequate care can be provided and the support is available for vulnerable people following a bereavement. There are a number of specific tax benefits where a trust is created for a vulnerable person, who falls within the criteria set out within the legislation, and these can be created during life or placed within a will to come into effect on death.

Am I vulnerable? How do I protect myself?

We also work closely alongside the Blake Morgan Injury Group in setting up and administering personal injury trusts. Receiving a large settlement can be daunting. You don’t always know what to do with the money and are worried about your friends and family asking you for money all the time, when that money is there for a reason, because you will need it. A trust can be the answer.

Some injuries resulting from accidents and clinical negligence claims result in clients becoming mentally incapacitated. Sometimes in those situations a the appointment of deputy is an appropriate way to administer their compensation settlement. But where the individual has a physical injury which does not affect their mental capacity, or perhaps if they are a child and it is not yet possible to know whether they will be able to manage their own affairs in the future, a trust can be used to hold the compensation settlement for the benefit of the person having made the claim. Trustees can assist in managing the compensation for the benefit of the person who had the injury.

Creating a trust can be advantageous to the person receiving the compensation, especially if, due to their injuries, the claimant is reliant on state benefits as they are unable to work. Funds placed into a trust, if done properly and within the specified time limits in the legislation, can be ‘ring fenced’ so disregarded by the Department for Work and Pensions when assessing a person’s entitlement to means tested benefits. This enables the individual to receive the state support they need alongside the additional care or provision that the compensation is able to fund.

How can a solicitor help?

We can act in setting up and administering various types of trusts, ensuring that the structure is the most tax efficient means possible to provide protection for a vulnerable person. We will always discuss the options with clients and help them to decide which is the best route for them. If you want to discuss estate planning further, please contact the team here.

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