Legal Advice on Providing for Disabled Family Members in Your Will
When thinking about making a will, parents are often most concerned about providing for their children or other dependants if they are to pass away. This concern becomes much greater when the beneficiary has reduced capacity or another kind of disability. This post addresses some of the major concerns in connection with leaving to a disabled beneficiary and how this is best approached.
The following advice comes from Wilson Fish, probate, wills, and executory solicitors based in Scotland.
Do I need to make a will?
If you have a family member with reduced capacity or some other kind of disability it is very important that you make a will.
If you pass away without making a will, your estate will be distributed according to standard rules. If your estate is distributed under these standard rules, this may mean:
- Certain beneficiaries may get less (or more) than you would have liked them to
- The money the inherit will be paid directly to them – even if they are incapable of managing it themselves.
- They lose any means-tested state benefits
- As the person is in a vulnerable position, others may try to take advantage of them because of their money
Writing a will allows you to take some extra steps to avoid these things from happening. It also allows you to ensure that those closest to you and those who need it most will receive the right financial support after you pass away.
How can I prevent my child’s benefits being affected by inheritance?
Many parents assume it will be better to disinherit their disabled child so they can continue to receive state benefits – instead giving the money to someone else under the condition that they look after the disabled child.
However, this may not be the best thing to do for a number of reasons.
If circumstances change, the beneficiary may find it difficult to fulfil this role. It may also mean that your disabled child is negatively affected by the life of the beneficiary, for example if they divorce or become bankrupt or even die without making a will making no provision for the disabled individual.
Children also have a legal right to inherit a share of their parent’s estate – if you disinherit a child in your will, there is a good chance it will be contested regardless of whether it is in the bests interests of the child financially.
Also, as you may be aware, children have a legal right to inherit a share of their parent’s estate. If you disinherit a child, there is a risk that another relative or even the local authority could contest your will. This can happen regardless of how the receipt of a large amount of money would affect your child’s benefits.
To avoid these problems, you can set up a discretionary trust in your will.
What is a Trust?
A trust is a legal arrangement that allows assets to be transferred to ‘trustees’ who must use these assets for particular purposes and to benefit the ‘beneficiaries’.
You may set up a trust during your lifetime, or it can be included as part of your will. A trust is set up by a trust deed, or will. Your trust deed or will will outline:
- Who the trustees are
- Who the beneficiaries are
- How the money or property if to be managed
- How the money or property may be used
- Who will receive the money when the trust comes to an end
There are various types of trust that are used in different circumstances. It is important to seek legal advice to ensure you set up the right kind of trust to meet your needs.
What is a discretionary trust?
In a discretionary trust, the Trustees are given discretion about how the assets in the trust are used. This means they will make decisions about if and when payments are made and to whom.
Discretionary trusts may be suitable for beneficiaries who are disabled or have reduced capacity and also for those who receive means tested state benefits or are in community care.
This is because having money or property in a discretionary trust will not affect means tested benefits, and will also not be taken into account when calculating how much should be paid towards care services.
It is also important to consider a discretionary trust if the intended beneficiary is not receiving means tested benefits – they may receive these benefits in the future.
Another important consideration if the beneficiary is a child is to think what they might need when they are an adult, for example it may be a good idea to leave enough money for them to make appropriate home modifications or to pay for specialised courses to assist them with learning.
Can the family home be left in trust for the beneficiary to live in?
The family home can be left in trust for your child or other dependent to live in. However, you should consider leaving enough money to ensure the property can be maintained throughout your child’s life – this can include general maintenance, replacement of important components and emergency repairs.
As well as leaving the family home in a trust there are other ways of allowing your child or dependent to live in the family home after you pass away. You should discuss these options with your solicitor to make sure you select the most appropriate way.
What happens if someone else wishes to leave money to my child?
Often, a child with reduced capacity’s grandparents may also wish to leave them money in their wills. This could potentially affect the means tested benefits the child receives.
It is possible for grandparents to set up a ‘pilot’ trust for the child, with a nominal amount however the trust will not actually begin until a large amount of money is put into the trust. This also allows others to put money into the trust for your child, such as other family members or friends.
How can I balance the interests of my other children with those of my disabled child?
It can be difficult to decide how much or what proportion of your estate to leave to your disabled child. It may be that you decide all of your children should be given an equal share with your disabled child’s share being put into a discretionary trust.
However, it may be the case that your disabled child has significantly greater need for the money or property than your other children – this will be particularly relevant if your other children are financially independent and thus this should be regularly reviewed as your children grow older.
On the other hand, it may also be the case that your disabled child manages well on their own and receives wages or means tested benefits and would not greatly benefit from a large amount of money and even be unable to spend it or find it burdensome or disruptive. Each case is different and it is important to discuss your individual circumstances with your solicitor.
Wills Solicitors Based in Scotland
If you have a child or dependent with additional needs it is crucial that you seek specialist legal advice. At Wilson & Fish our solicitors are specialists in executory, probate and wills and offer advice on all aspects of making, enforcing or challenging a will where the estate is based in Scotland.