Making a will when you are a parent generally involves appointing guardians to look after your children and trustees to look after their inheritance until they come of age to access it.
Making a will, including children under 18 years of age and picking the right trustees to look after their inheritance until they are old enough is a difficult task. An even more difficult task is when your child is an adult with special needs and/or suffering from a disability. In most cases this will mean that your child may never by in a position to access their inheritance themselves or look after their own financial affairs.
If you are the parent of a child who is a vulnerable adult and has special needs, it is even more important for you to make a will to ensure that the appropriate care is in place for your child in the event of your death. In order to do this certain protections will have to be made for your child in your will. There are many issues that must be considered when deciding what protections will be best for your child, such as:
Social Welfare Benefits
Is your child in receipt of disability benefit? If so they will be subject to a means test and an inheritance left to them by you will be taken into account.
Medical Card
Leaving an inheritance in your will for your child may affect their eligibility for other benefits, such as a medical card.
Your child’s ability to manage financial affairs
Will your child be able to deal with an inheritance if one was left to them in your will?
These questions are frightening as it is often unimaginable that you won’t be around to help your child. However, there are many legal mechanisms available to be used to enable vulnerable children to be looked after in your will. One of the most popular mechanisms is called a discretionary trust.
Making a Will – Discretionary Trusts
A discretionary trust involves appointing persons called trustees to receive inheritance on the basis that they may use it to benefit your child, but all the while granting them total discretion as regards whether they actually do make payments out of the trust funds to your child. The benefits of this trust are that it gives great flexibility to the trustees to deal with your child’s circumstances into the future and also technically gives the inheritance to the trustees rather than directly to your child. This can often preserve social welfare and medical card benefits and a scheme can be put in place by the trustees that allows for payments from the trust in line with the means tests for these benefits.
It is advisable to consider a discretionary trust and other mechanisms when you are making your will. Another important aspect of making a will to include care for your vulnerable child is to plan the will in such a way that the inheritance tax payable by your child is minimised.
If you do not make a will you will lose the opportunity to make any special provisions for your child and your child may be left in a situation that is not suitable for their care needs. Not making a will when caring for an adult child with special needs can add a lot of unnecessary stress to an already vulnerable and fragile person.
We would encourage you to talk to us first about making a will to make special provision for your child and put your mind at ease today.