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Providing for a child with disabilities in your Will.
If you have a child with disabilities, you may wonder how you are going to provide for them when you are gone. Depending on the disability of your child, they may not be able to manage the financial responsibility of a large sum left in your Will. If you leave a significant amount of money to your child, they may not know how or where to invest the money. It’s also possible that people could take advantage of your child’s funds if you are not there for them.
Financial Considerations for a Child with Disabilities.
This can put you in a difficult situation, as you will want to ensure that your child is taken care of after your death. You may consider leaving your child’s share of your Estate to a sibling on the basis that they can manage the funds on behalf of your child. However, this is very risky, as an outright gift means that the money legally belongs to the sibling rather than your child and unforeseen circumstances may arise such as death, divorce and bankruptcy.
Legal Solutions in the UK
In the UK, there are several legal ways available for providing financial security, care, and support for your child with disabilities through your Will. The most commonly used way to is a Disabled Person’s Trust. This type of trust is designed to provide for the financial needs of the child while preserving their eligibility for government benefits and also for those who are at risk of financial abuse or who may need support managing their own money. You can put money and property into a trust before you die, and after you die through your Will. The trust can be structured to provide for the child’s ongoing expenses, including medical treatments, specialised equipment, and other care needs. The trust will last the lifetime of your child. After they die, the money will pass to someone else of your choosing. You can set up a Disabled Persons Trust if your child is eligible to receive benefits such as Disability Living Allowance and Personal Independence Payment.
Another common way is to set up a discretionary trust in your Will. A discretionary trust is different to a Disabled Persons Trust as you are required to have a group of beneficiaries such as other family members or charities. Your child does not need to be recognised as a disabled person by law to benefit from a discretionary trust, therefore they are a lot easier to set up. However, a discretionary trust will pay more tax compared to a Disabled Persons Trust.
Both types of trusts can provide for things that your disabled child needs or wants. A trustee is appointed to manage the funds on your child’s behalf. Therefore, you can choose someone you trust to help your child, ensuring peace of mind for yourselves that the needs and care requirements for your child are taken care of.
Providing for a disabled child in non-financial ways:
If you have a disabled child, you may want to consider including provisions in your Will that ensures their care and wellbeing. A guardian should be appointed for any child who is under 18 to ensure that someone appropriate is available to care for them when you have passed. Particular care should be given to choosing a guardian who is capable of providing specific care for your child, such as advocating for their educational needs or making sure they receive proper medical treatment. You can also include instructions for specific accommodations and support your child may need. Additionally, you can create a letter of wishes that outlines your wishes for your child’s future, including their likes, dislikes and daily routine; to help the guardian ensure their care is consistent with your wishes.
It’s important to consider the possibility that in the future, you may no longer have the capacity to continue providing for your child while you are alive. In this scenario, a Lasting Power of Attorney (LPA) can help. A carefully drafted LPA can allow for continued financial or other provisions for your disabled child, should you become unable to make such decisions yourself. It may also be suitable for your child to make an LPA themselves, or an application to the Court of Protection can be made on their behalf.
How can we help?
Providing for a child with disabilities in your Will is an essential step in securing their future.
While the process may appear complex, our Private Client solicitors can help navigate you through the different options, making sure that you make a fully informed decision.
For expert-tailored advice you can contact us at 01453 847200 or get in touch to make your life less complicated here.