In summary, Vulnerable Person’s Trusts are used:
- As a way of paying for the things, the statutory services may not be able to give, for example, a holiday, a new coat or even additional care. As a means of owning, managing and maintaining a property.
- As a way of arranging an inheritance. So there is a way of managing money or other assets. To avoid benefits and care funding being stopped. Income Support – and possibly other benefits such as Housing Benefit – stops being paid if a person has more than a certain amount of money. Benefits are withdrawn or reduced until savings fall below the relevant level for the benefit. If Social Services fund a residential care place or care package they may also begin to charge for the care service or stop funding it. A Vulnerable Person’s Trust can avoid this.
What’s the best way to provide for my disabled child?
Although not exclusively, a Vulnerable Person’s Trust is often used by families who have a relative with a learning disability, a physical disability or an addiction. Vulnerable Person’s Trusts are a way of putting in place financial arrangements to help support that relative. A Vulnerable Person’s Trust can also provide a way of owning property. Sometimes families decide that in the long-term they would like to be able to set up arrangements that allow their relative to continue to live at home with the necessary support. This is known as a life interest.
What are the key points about a Vulnerable Person’s Trust?
Trustees have discretion as to how the assets are used – the trustees are free to make all the decisions. The person to benefit from the Trust must not have a right to the income or capital. The intended beneficiary must not be the only person named in the Trust meaning they must not be the ‘sole’ beneficiary. Without these features, the Vulnerable Person’s Trust is not properly constituted and the person may be treated as though they own the house or have the money. If you want to make some financial provision for a close relative who is dependent on welfare benefits and/or supported by Social Services do not say in your Will, “I hereby leave my worldly goods to x”. This will not provide a long-term nest egg. Consider instead including in your Will a Vulnerable Person’s Trust