If you have a child or beneficiary with autism and want to see the fruits of your labour benefit them after your death, you need to think carefully. The best way to deal with their inheritance could be to put it into a Disabled Discretionary Trust under the terms of your Will, which can hold money, property, shares or any other assets.
Typically, poorly advised individuals will either leave the inheritance intended for the autistic beneficiary to another trusted family member, hoping it will be used as intended, or the inheritance will simply be left outright to the autistic beneficiary. Both carry inherent risks. The trusted family member is not obliged to use the funds as you intended, and can even have the decision taken out of their hands if they pass away or suffer financial or marital difficulties – the inheritance intended for your autistic beneficiary could easily end up somewhere you never intended. Leaving the inheritance directly to the autistic beneficiary may not be the answer either, as it will impact on any means tested benefits as well as being vulnerable to being spent in a manner other than what you intended.
It is also worth bearing in mind that not to make any provision at all for a disabled son or daughter on the grounds that another member of the family will look after them or that the state will provide for them may not be a wise course. This is because under the Inheritance Act (1975) if insufficient provision is made it is possible for Social Services and the Department of Social Security to challenge the will. In turn this can result in an unpleasant, unhelpful and costly legal dispute.
Disabled Discretionary Trusts
A Disabled Discretionary Trust is set up by parents or other relatives in their Will as a way of making long term financial provision for a disabled child or beneficiary. The trust itself will be a clause in the will and will include the Trustees powers. A letter would normally be kept with the Will directing the trustees as to how they should manage the trust.
The reason a trust is useful is that assets once put in trust do not belong to the “object” of the trust (disabled son or daughter who is intended to benefit). This means that the capital held in the trust is not taken into account when assessing entitlement to state benefits like Income Support or local authority obligations to fund care. The trust assets will be looked after by a minimum of two trustees (maximum of four) and by setting up the trust the testator is saying who they wish to look after their beneficiary’s assets. In the absence of a trust where the disabled beneficiary is unable to manage their money the Court of Protection will have to get involved and appoint a Deputy. This Deputy may not be the person the testator wished to look after their beneficiary’s assets.
For further information about Disabled Discretionary Trusts, please call my office on 0800 1105221 and quote ‘Living Autism’.
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Editor’s Note
Our readers might also be interested in the information below regarding life insurance from two different comparison sites.
https://www.gocompare.com/life-insurance/calculator/
https://www.comparethemarket.com/life-insurance/calculator/
