• If you leave money to a disabled person directly, in the form of a gift in your will, it can affect any means-tested benefits they may be entitled to.
  • If your loved one is vulnerable, they may be taken advantage of financially.
  • If they have any capacity issues, they may have difficulty managing money and be unable to operate a bank account.

On the other hand, if you do not make any provision for a disabled child, or make insufficient provision, your will may be challenged, either by your child or on their behalf by social services.

Why trusts for disabled people are important

Using a trust in your will can enable you to look after your disabled child in the future and overcome these barriers.

A trust is a formal legal arrangement. A group of people, known as trustees, hold money on behalf of other people – in accordance with the terms of your will. 

Some families leave money to a brother or sister on the understanding that they will look after their disabled sibling. However, if the sibling dies, gets divorced or has large debts, they may lose control of the money they were informally holding. All of this can be avoided by forward planning and including a trust in your will.

Depending on the size of your estate, inheritance tax may have to be paid out of the estate when you die. Depending on the type of trust you use, there may also be tax implications after your death. You should discuss this with your solicitor.

Choosing your trustees

When you see your solicitor, have in mind whom you wish to act as trustees. Trustees can be:

  • professionals, such as solicitors or accountants, who'll charge for their services, or
  • friends and family.

Most solicitors say you should have more than one trustee, but not more than four – as trustees have to meet regularly and agree all decisions.

Work out the value of your assets

You should also have an idea of your assets:

  • how much you are worth
  • any debts
  • the names and addresses of any people or charities you want to benefit from your will.

Discretionary trust

The trustees look after the assets, which can be made up of your house, shares or items such as jewellery.

The trustees decide how your estate (amount of land or property) will benefit a group of people or organisations. You can, for example, name all of your children and grandchildren, along with favoured charities, as the potential beneficiaries of the trust.

You then leave a separate, private letter with your will addressed to your trustees explaining how you would like to see the trust run. As none of the beneficiaries have a defined share in the trust, they cannot be said to own any part of it. They cannot demand that they are paid their “share”. As a result of this, the trust will not affect your child’s means-tested benefits. Your letter of wishes can state, for example, that during their lifetime you want your trustees to put your disabled child’s needs first and benefit the other beneficiaries later.

Disabled person’s trust

The other type of trust is a disabled person’s trust. Your child will need to meet certain conditions to qualify for this type of trust. For example, they receive disability living allowance care component at the middle or higher rate. Your solicitor will be able to confirm whether your child can qualify for this type of trust.

Again this trust does not affect means-tested benefits, even though your child will be entitled to all of the income from the trust. However, if the trust fund produces a lot of income, this may mean that your child has more money than they can use. This can affect their benefits. If the trustees choose to pay out financial assets from the trust fund, at least half the assets must be for the disabled person.

Is it expensive to make my will with a solicitor?

Costs vary depending on where you are in the country and the level of experience of your solicitor. When you see your solicitor, discuss potential costs at the outset so you fully understand what you are committing yourself to pay. We would always say that the cost is worth it for peace of mind.

How can I find a solicitor?

The Law Society has a list of all solicitors in the UK and the areas they specialise in.

Which type of trust is right for me?

This depends on your circumstances and those of your child or loved one. Your solicitor will explain both types of trust to you in more detail and guide you to the right choice for you.

Are trusts expensive and difficult to run?

Your trustees must undertake certain duties like keeping records of trust assets and taking advice to invest funds. Advice can be paid for from trust assets, and generally running costs are low - about 1 to 2% for some trusts. Professional trustees may charge more than this. You should check before appointing them.

I only have one child, can I make them the sole beneficiary of a discretionary trust?

Unfortunately, no, you need to have a group of beneficiaries. You could include other family members, such as nieces or nephews, or favourite charities such as Scope to ensure you have a large enough group of potential beneficiaries. If your child qualifies for a disabled person’s trust they can be the sole beneficiary.

Can I include Scope as one of the discretionary beneficiaries?

Yes, and we are always grateful to be considered in this way. If we are included as a beneficiary of the trust, we would not normally expect to receive any benefit until after the death of the disabled beneficiary.

What happens to the trust after the death of the disabled beneficiary?

You get to decide what happens. You can, for example, direct that your trustees split any money left over equally between the other beneficiaries that are still alive. Or you can give any balance to charity. It is up to you. If you feel you would like to leave a gift to Scope, we would be very grateful.

Legal disclaimer

This information is guidance, not legal advice. Always contact a solicitor or legal professional before including a trust in your will.

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