Wills and trusts - advice and support

[Rubytoo]

I have a will in place, and the execs are instructed to start a disabled persons trust for my son, upon my death. I have named family members as well as the solicitor to become trustees. My problem is all family members are fairly old, so… not an ideal set up - what would you advice to do in for setting up a trust, if I don’t have appropriate people to ask to be trustees?

[KatherineMiller]

Hi Rubytoo,

Many thanks for your question.

It’s quite common for people to be in the same situation as you, having a lack of family members to be Trustees.

As Trustees you can pick family, friends, professional people (for example, Solicitors or Accountants) and Trust Companies (for example, Mencap Trust Company).

If you are picking family or friends, they’ll act free of charge and are only entitled to reclaim out of pocket expenses, so things like telephone calls and travel costs. If you are picking professional people or a Trust Company they will charge and you should check and agree the charges before appointing them. The charges are paid from the Trust fund.

Its a personal choice who you pick to be Trustees, but please do remember that it’s a vital role in managing the Trust for your son and so its very important to pick wisely.

Kind regards

Katherine

[qwertymum]

Hi,
I’m currently filling in the forms to apply for deputyship for health & welfare for my daughter following a traumatic experience when her residential home took her to A&E.
Two quick questions - I’d assumed that this would be a simple thing, but looking at the conversations on here the applications are often rejected. Should I provide a witness statement explaining that we’re not always in agreement with her home? Maybe I should word it differently?
Also can I just clarify that as we’re only applying for H&W deputyship we pay the fees. Some of the guidance talks about the benefits that the client receives, but I think that’s only applicable if your applying for property and affairs?

[KatherineMiller]

Hi qwertymum

Each application for a Health & Welfare deputyship will vary depending on the circumstances but a witness statement is the best way of giving full details about your daughter’s situation and the issues you have faced with decision making. The statement is your opportunity to explain why you feel it is in your daughter’s best interests to be appointed as the deputy and be able to make decisions on her behalf. It is also possible to include witness statements from other people who may be able to provide additional information to the Court to support your application.

The proposed deputy does pay the fees for a Health & Welfare application. There is more information about fees and possible fee exemptions on the gov.uk website.

Kind regards

Katherine

[qwertymum]

Thank you very much for your quick reply. I feel more confident about completing the form now - I was afraid to go waffling on filling all the boxes with “Mum moaning”

[very_busy_lady]

Hello, we currently have a will done, and the lawyer has set up a discretionary trust for my severely autistic son with profound learning disabilities. I would like to know what A disabled persons trust is, and what benefits it may have over the discretionary trust fund please? We are in Scotland. Many thanks,

[KatherineMiller]

Hi very_busy_lady

Thank you for your query.

A Disabled Person’s Trust is similar to a Discretionary Trust and can be used to provide for a disabled or vulnerable beneficiary. It’s main advantage is that it receives special tax treatment from HM Revenue & Customs if certain conditions are met. This can mean that any charges to Inheritance Tax, Income Tax and Capital Gains Tax are reduced.

However, you mention that you are in Scotland and the laws regarding inheritance and trusts do differ from those of England and Wales. It is, therefore, important to take advice from a Scottish lawyer about the trust options for you.

The charity, Enable Scotland, will be able to provide more information on planning for the future and to signpost you to specialist lawyers. They can be contacted on 0300 0200 101 or visit their website https://www.enable.org.uk

Kind regards

Katherine

[caseslot]

caseslot1m KatherineMiller
Hi, I’m just revisiting this.
Could my ex husband pay the money from our divorce into a trust fund and then the trust fund buy a house?
I would then be put under no pressure to buy a property immediately due to benefits being affected. Indeed, I would not have to buy a house if it wasn’t the right thing to do and the money would remain in the trust fund

[KatherineMiller]

Hi caseslot,

That’s an interesting question as the answer covers a few areas of law.

From a general legal view point, there is no reason why this could not be done. However, a few potential issues come to mind that you’d need to consider further.

1 I’m not a family lawyer so am not able to tell you the answer to this, but you need to check that what you are suggesting is actually possible within your divorce financial arrangements;

2 I’m also not a benefits expert so am not able to tell you the answer to this, but you need to check that agreeing not to take assets from the divorce would not be viewed to be deliberate deprivation of assets for means tested benefits purposes; and

3 You would need to consider carefully what the Trust looks like. If it is to benefit you and your children then it would need to be a Discretionary Trust. If that’s the case, there are tax implications that would need to be considered when setting it up and for the ongoing administration of it. It is fine to buy a property within a Discretionary Trust if the Trustees decide that this is an appropriate investment to hold.

I’m sorry that it’s not as straight forward an answer as you might have hoped for, but it’s very important that you check everything carefully before entering into this type of arrangement.

Kind regards

Katherine

[Charlotte]

Hello Katherine,

My niece is disabled mentally and physically. She is now an adult. My sister (her mother )is in receipt of benefits and wishes for my husband to become her ‘power of attorney’ - I’m not sure of the correct wording, I’m sorry. She wishes for my husband to have complete control over her finances (no savings but receives benefits and a direct payment for care) and also for us to let a flat to her in the near future. Firstly I’d like to know if it would be possible for my husband to do both, and secondly how we would go about this? Our main concern is that my niece gets taken into care of the government now she is an adult, if anything should happen to her mother. I very much appreciate you reading this, and your time.

Kind Regards, Charlotte

[LouiseP]

My eldest brother is registered mentally handicapped and my mum is currently still alive and his main carer - when mum passes away, we are wondering should we have in place a Health and Welfare PoA for my brother so myself and my other brother and sister can act on his behalf - mum can do this currently but we have been advised as brother and sister when mum is no longer here we will not have the same authority without a PoA - does anyone have any advice please. Thank you

[KatherineMiller]

Dear Charlotte

Thank you for your query. If your sister wishes to appoint your husband as her attorney to assist with her financial affairs then she can do so by putting a Property & Financial Affairs Lasting Power of Attorney (LPA) in place. The LPA gives legal authority to the attorney to be able to manage financial affairs in the best interests of the person that has made the LPA. It is also possible to apply to the DWP to become an appointee to manage benefits for someone.

I am not clear though if your sister wants your husband to manage your niece’s financial affairs. If that is the case then your niece could put an LPA in place if she has the required mental capacity to do so. She would need to understand the nature of the legal document and the authority she is giving to your husband.
If she doesn’t have the mental capacity to put the LPA in place then your husband could consider applying to the Court of Protection to become her Deputy and ask for authority from the Court to manage her financial affairs. He can also apply to become her appointee for the benefits.

I hope that answers your query but please do let me know if you need anything further.

Kind regards

[KatherineMiller]

Dear LouiseP

It is so important for families to plan ahead and it is great that you are considering the options for assisting your brother in future. With regard to making health and welfare decisions for your brother, your options depend on his circumstances and his mental capacity to make decisions for himself.

If he has the required mental capacity then he should be making decisions for himself. He can also consider putting a Health & Welfare Lasting Power of Attorney (LPA) in place possibly appointing you and your siblings as his attorneys. His attorneys would then be able to make decisions on his behalf if he were unable to do so for himself. You mention that your Mum can currently act on his behalf – is this under an LPA?

However, if he is not able to make decisions for himself or put an LPA in place, then decisions will be made on his behalf following the provisions of the Mental Capacity Act 2005 (MCA). This generally means that a decision can be taken for him by the relevant person and it must be in his best interests. As family members, you should be able to assist with any decision making process on behalf of your brother. The provisions of the MCA are quite involved but the Mencap information provides a useful overview of these provisions https://www.mencap.org.uk/advice-and-support/mental-capacity-act.

In some circumstances, it may be advisable to apply to the Court of Protection to become a Deputy for your brother. The Court are able to authorise the appointment of a person to make decisions on behalf of a person who is unable to make their own decisions. More information on this is available at https://www.gov.uk/make-decisions-for-someone.

I hope this provides a useful starting point for you to consider your options and determine what you may be able to put in place to assist your brother.

Kind regards

Katherine

[SarahL]

Hello @KatherineMiller

Please could you take a look at @pollyanna3’s post about Trusts and being a deputy?

Mencap Trust

I have just set up a Trust with Mencap, changing my will to this effect. I act as Deputy in respect of my daughter’s finances/property… Once the Trust is activated, does she no longer need to have a Deputy in this regard?

thanks
Sarah

[SarahL]

Hello again @KatherineMiller

Please could you also look at @Jackson’s post about what age to get a Power of Attorney.

When to get a power of attorney

At what age should I be started the ball rolling on getting a Power of Attorney - my son is going to be 16 soon?

thanks
Sarah

[Richmondos]

Hi, I am also considering this as an option. Did you pursue this further? Is it possible to have this in a divorce settlement, is it considered a deprivation of assets as far as benefits are concerned?

[caseslot]

I spoke with my solicitor about it. He advised against it. Purely because, if anything ever happened to my son, the trust could then decide to sell the house leaving me with nowhere to live.
He was also inclined to believe that having any settlement put into a discretionary trust would more than likely be seen as deprivation of income. Which was never my intention.
I did not seek clarification from the DWP though.

[caseslot]

I’m very sorry that my reply took so long, I don’t seem to get notifications about replies.

[MikeC]

I understood that if a will is written ‘in trust’ so as to set up a discretionary trust or a vulnerable persons trust that you would not benefit from the extra residential nil rate band that was recently added. Is there an allowance for a vulnerable person or must the trust be set up outside of a will?

[KatherineMiller]

Hi MikeC

The rules regarding the Residence Nil Rate Band (RNRB) are quite complex but you are right in that it cannot be claimed if the estate passes to a Discretionary Trust. However, if the estate passes to a Vulnerable Person’s Trust/Disabled Person’s Trust then it is possible to claim the RNRB, as long as the other conditions are met.

This is an important factor to consider when deciding on the type of trust to use.

Kind regards

Katherine