Disabled Persons & Vulnerable Persons Trust
Why would you make a Disability Persons Trust?
You will need to seriously consider creating a Disabled / Vulnerable Persons Trust if you have a disabled child and are concerned they may not be able to manage their own financial affairs. If the correct procedures are not put in place; your child’s local authority funding could be effected if not stopped and they could be vulnerable to exploitation.
Disabled people usually would be on means-tested benefits and this trust would safeguard their benefits as well as their inheritance. On death, the inheritance that now belongs to the disabled person would go straight into a Discretionary Trust. Now because the inheritance is held in trust, they will continue to receive their benefits as well as enjoy their inheritance. The children could also take an income from the trust so they get double the benefits. Without this trust, the benefits would have been seized and the inheritance would be taken by the local authority. They would use this to pay for the benefits. A Discretionary Trust is flexible and adaptable to the changing circumstances of the beneficiaries.
Benefits of Disabled Persons Trust
Disabled people can benefit from the regime of taxation through the exceptions of Finance Act 2006. He or she can take advantage of the inheritance tax, income tax and capital gains tax relief if the Disabled Persons Trust meets certain prescribed conditions. For disabled persons of above 65 years’ of age, “attendance allowance” can be a benefit. They are not entitled to the Disability Living Allowance.
Vulnerable Persons Trust
A Vulnerable Persons Trust can be created either by the disabled person or third party on behalf of the disabled person. They key requirement of this trust is that the principal beneficiary must be a disabled person at the time when the trust is established. There are two types of Vulnerable Persons Trust, which are Non Interest In Possession Trust and Interest In Possession Trust.
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