Disabled Beneficiary Trusts

How can you provide long-term financial support for a vulnerable child, or a beneficiary with disabilities?

Leaving assets directly to a child, or, to another beneficiary who cannot manage their own affairs, may affect their future entitlement to benefits and could therefore lead to a significant part of any specific bequest being used in their support.

There may also be concern where you fear a less able beneficiary might be led astray if they have total control of their bequest, or, if a condition may leave them unable to manage their own affairs. 

Parents (or relatives) can set up a Discretionary Trust through their Will(s) and any assets left in the Trust do not then belong to either a surviving spouse, partner, children, or other potential beneficiaries of the Trust. This means capital held in the Trust will not be taken into account when assessing entitlements to state benefits, such as local authority obligations to fund care, or Income Support, for any potential beneficiary.

The chosen Trustees (commonly spouse & children) can then manage the assets and use them on behalf of any of the potential beneficiaries as they see fit.

At a later date, if appropriate, the Trustees may consider designating a share of the Trust Assets for one of the potential Beneficiaries who may be Disabled, if for tax, or other reasons, this may be advantageous.

Should one of the potential beneficiaries pass away before all assets in the trust have been used for their benefit, the remaining assets can then be distributed to other potential beneficiaries specified in the Will.