Vulnerable Beneficiaries

It is never easy to think about what will happen to your loved ones after your death but many families are faced with the worry of what will happen to loved ones who are not able to care for themselves.

It may be that you are wanting to provide for a young person or someone who is not capable of managing their own finances. There are particular challenges involved with vulnerable family members and without proper advice you could make decisions which do not achieve the result you intended.

Gifts in Wills

In many scenarios leaving an outright gift in your Will to a family member will be the simplest way to proceed. This may not be appropriate for a vulnerable beneficiary and further consideration must be made.

A vulnerable beneficiary may not have the maturity to manage any financial gifts they receive. They may spend the monies in a way you would not agree with and which they later regret. In addition, it can be difficult to protect these assets against events that could happen in a person’s life such as bankruptcy or divorce.

Should the beneficiary lack capacity at the time they receive the gift they will not be able to make a will directing where any monies should go if they pass away. In this situation the monies would be distributed in accordance with the rules of intestacy.

Further, if the beneficiary does not have the capacity to manage their own finances an application may be made to appoint a deputy to act on the beneficiaries behalf. This application is made to the Court of Protection and can be costly, time consuming and stressful. The Court may then appoint a deputy who you would not have chosen and who may charge for their services.

Should the vulnerable beneficiary be in receipt of means tested benefits inheriting a large sum of money may affect their entitlement to such benefits and ultimately impact on their day-to-day care.

The Solution

As part of your estate planning it is possible to create a trust for the benefit of a vulnerable beneficiary. This can be done as a life time trust or under the terms of your Will.

You are able to nominate the people who will manage the Trust and the funds it holds and state who you wish to benefit from the money. It is also possible to leave a letter of wishes to your Trustees on how you would like the money to be spent, for example certain days out or holidays you wish to continue.

The Trust can offer peace of mind to our clients that their loved ones will be provided for when they are no longer here.