Navigating the intricacies of life while caring for a family member with special needs or disabilities can be an emotional journey. Naturally, you might worry about how they’ll manage without your support someday. At RRK Wills & Estate Planning, we truly understand these concerns. That’s why we’re passionate about shedding light on Disabled/Vulnerable Person’s Trusts. This is a powerful tool that can help ensure that your loved ones continue to receive the care, support, and quality of life they deserve, even after you’re no longer around.

In this blog, we’ll help you to learn more on this important topic, providing you with insights into how these trusts work, the benefits they offer, and the steps involved in establishing one.

What is a Disabled/Vulnerable Person’s Trust?

A trust is a legal and financial arrangement that allows an individual or group, known as the “trustee/s,” to hold and manage assets on behalf of one or more beneficiaries. The purpose of a trust can vary widely, from preserving wealth and managing investments to ensuring the financial security of loved ones, particularly those with special needs or unique circumstances.

Trusts provide a structured framework for the distribution of assets, often with specific conditions and guidelines outlined in a legal document called a trust deed. By creating a trust, individuals can exercise greater control over their assets, protect their legacy, and provide for the well-being of their beneficiaries in a way that aligns with their intentions and long-term goals.

A Disabled/Vulnerable Person’s Trust is a specific type of trust, typically used to benefit beneficiaries who are:

• Individuals with Disabilities: Disabled individuals who are physically or mentally incapacitated may qualify for a Disabled or Vulnerable Person’s Trust. Disabilities can include physical disabilities, mental health conditions, neurodivergence, learning difficulties, or any other condition that significantly impairs a person’s ability to manage their own affairs, such as Alzheimer’s or dementia.

• Vulnerable Adults: Vulnerable adults who may not have a disability but are at risk of financial exploitation or other forms of harm may also qualify. Vulnerability can arise from various situations, such as cognitive impairment due to ageing, addiction issues, or being susceptible to undue influence.

• Children with Disabilities: Children with disabilities can also be beneficiaries of these trusts. The trust can provide for their future financial needs and support, ensuring they have access to funds and resources necessary for their care and well-being.

Key Benefits of a Disabled/Vulnerable Person’s Trust

So, what are the advantages of setting up a Disabled/Vulnerable Person’s Trust?

• Personalised Management: Trusts are managed by trustees – people you choose, like trusted family members or professionals. They will ensure the trust’s assets are used to benefit your loved one according to your wishes.

• Flexibility: Trustees can make discretionary decisions about the distribution of funds based on the beneficiary’s needs. This means the funds can be used for anything from medical expenses and educational needs, to recreational activities that enhance the your loved one’s quality of life.

• Protection of Benefits: One of the significant benefits of this type of trust is that the assets within it are not typically considered when assessing eligibility for means-tested benefits. This means that your loved one can still have access to essential state benefits while enjoying the added security and benefits from the trust.

• Tax Advantages: A Disabled/Vulnerable Person’s Trust also come with particular tax advantages, such as potential exemptions from Inheritance Tax, and favourable tax treatment for Income Tax and Capital Gains Tax under certain circumstances.

What is the Process of Setting up a Disabled/Vulnerable Person’s Trust?

• Seek Professional Advice: Consult with a specialist in estate planning and trusts (that’s us!) to guide you through the process, and help you to understand the legal and financial implications.

• Selecting Trustees: Choose reliable and trustworthy individuals, often family members or close friends, who will manage the trust in the beneficiary’s best interest.

• Drafting the Trust Deed: This is the legal document that establishes the trust, outlining its purpose, identifying beneficiaries, and laying out the powers and responsibilities of the trustees.

• Funding the Trust: Decide which assets or funds will be placed into the trust. It could include cash, property, stocks, or other valuables.

At RRK Estate Planning, we understand the importance of safeguarding the future for your loved ones. Our team of experienced professionals is dedicated to helping you navigate the complexities of trust planning with compassion and expertise.

Together, we can create a comprehensive estate plan that will provide peace of mind and ensure a legacy of care and support that extends beyond your lifetime. Get in touch today and take the first step towards a brighter, more secure future for your family.

Website: www.rrklegal.co.uk

Email: [email protected]

Telephone: 01215460771