Family members, most frequently parents, worry about how to provide for a relative who is, or who could become, vulnerable. 

Who is vulnerable? 

Of course, we could all become vulnerable at some point in our lives due to accident, illness, or changes in our circumstances. 
However, more generally someone could be described as vulnerable if they: 
aren’t educationally or emotionally mature for their age 
don’t understand how to manage their finances 
depend on ‘means tested’ benefits for their day to day needs because they are unable to work, for example. 

Example - living independently 

For example, a young woman who has a learning disabillity might decide she wants to live more independently. After careful research her parents agree and help her to move into sheltered housing. She now has more independence and support workers, who are avaialble for her around the clock. 
To live in her new home she receives some benefits, local Council funding and Personal Independence Payments (PIP)
She loves classical music and will travel long distances to go to performances. Her parents would like her to be able to do this after they die and would also like to leave her enough money to meet her continuing care needs. Her parents are concerned that an inheritance will affect her benefits and that anything they leave her will be quickly used up. 

What options do parents have? 

It’s important to take advice from experienced professionals in a situation like this. Unfortunately, if the arrangements aren’t made in the right way their daughter might not benefit as they want. 
Options include: 
Doing nothing - if parents don’t make any specific provision for the needs of a vulernable child in their Wills, other family members could seek to change the parents’ Wills after their deaths using a ‘deed of variation’. However, this could have tax implications and still affect the assessment of any means tested benefits. 
If the vulnerable person doesn’t have capacity to make their own decisions then the Court of Protection might need to be involved. The process can be lengthy and expensive, nor is the Court guaranteed to authorise a deed of variation. 
Leaving all the money to a brother or sister - problems can arise if the sibling isn’t happy to take on the responsibility or if the inhertiance affects their own financial position. There could also be problems if they fall into debt or get divorced, for example. They would also have to think about what arrangements should be made if they die first. 
Leaving money to a vulnerable child - if a vulnerable person currently receives means tested benefits and care, or may become entitled to them in the future, they will affected if they have assets of over £6,000. If they have more than £16,000 they will lose these benefits all together. 
Creating a discretionary trust - rather than leaving funds directly to a disabled or vulnerable person, a discretionary trust allows parents to choose people to be Trustees in charge of a fund for their future. A professional Trustee can be appointed to support family members and make sure that everything is well managed. A properly created trust should avoid the problem of reducing or losing means tested benefits. 
Parents can set up a discretionary trust fund in their Will or separately. It will only come in to effect when they die. 
A lifetime discretionary trust can be useful if other family members would like to make gifts or parents want to move funds out of their estate during their lifetime. This can have Inheritance Tax advantages if it is done well in advance. 
There can sometimes be an immediate Inheritance Tax charge on a lifetime discretionary trust. However, if the main beneficiary of a trust qualifies as a ‘disabled person’ then the tax charge should not apply. This is a specialised field, so expert advice should be taken before making any decisions. 
Please get in touch if you would like some advice about how to provide for a vulnerable person after your death. 
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