Are you worried what will happen to your son or daughter; your grandson or granddaughter, or any other family member with Autism when you are no longer around to care for them? YOU ARE NOT ALONE…..
I am often asked by the parents, grandparents, other family members and carers of people with Learning Disabilities and Autism for advice on providing for their loved ones in the future when they are no longer around to look after them. What will happen to their loved one after they have gone...?
I have also been asked whether Autistic relatives can be included in Wills; whether their share can be gifted to other people with the hope that they would look after the Autistic relative; whether it is best to exclude the Autistic relatives from the Will as they cannot manage; whether they would lose their means-tested benefits if they inherit and...
The answer is YES! You can provide fully for your loved ones who are on the autism spectrum, in your Wills and during your lifetime. There are tested legal vehicles that can be used to ensure that they properly provided for and looked after.
One of the most used legal arrangements is placing assets into a TRUST. Some people perceive Trusts as being lengthy, “scary” and having a “bad” reputation, but they are brilliant instruments when it comes to providing for vulnerable beneficiaries.
In simple terms, you can select someone you trust (a relative or/and a professional) to have the legal responsibility for holding assets or your Estate on TRUST for the benefit of your loved one that has a spectrum condition. This person is called a Trustee. You then provide your Trustees with detailed instructions of your wishes and tell them how they should deal with assets in Trust. Your wishes are not legally binding as Trusts need flexibility to reflect the changes in law and circumstances, but if you carefully chose your Trustees, they will act in the best interests of your loved one.
There are various types of Trust that might be suitable and the choice would depend on your family circumstances, the needs of the vulnerable beneficiary and the size of your Estate or the assets that would form part of the Trust.
Summarised below are the different types of trusts we often use when dealing with vulnerable beneficiaries and their families.
A discretionary trust is the most flexible type of trust and its flexibility works very well in providing for people on the Autistic Spectrum, as their needs are ever changing. The Trust gives the trustees full powers to decide IF, WHEN and WHO from the potential beneficiaries should receive capital or income from the trust fund. As the Trust is fully discretionary, the trust fund does not belong to any of the people who may benefit from it, and so it does not affect the means-tested benefits. The Trustee can use the money in the Trust Fund to purchase items for the use of the autistic person such as computers, clothing etc. or pay for their holiday. They can pay the money to the autistic person, carers or directly to suppliers. They can also assess and decide to give to the person with autism an amount within the limits for means-testing at that time, based on their needs. If you do include a discretionary trust in your will, it is very important to keep up to date with any changes in Law and the means-tested benefits.
This is a type of discretionary trust that can be set up for a person who is disabled, according to the definition outlined by the Government. As well as the benefits already mentioned above, the main benefit of the disabled person’s trust is the favourable tax treatment it receives for Inheritance Tax, Income Tax and Capital Gains Tax. However, with a disabled person’s trust, the income and capital must wholly benefit the disabled person, with the exception of small amount that can be used for another beneficiary each year. The trustees have the discretion whether to pay out or to accumulate the income or any of the capital in the trust which is why it is not taken into account when the beneficiary is assessed for means-tested benefits.
This type of Trust gives the person with Autism the right to benefit from income generated by the trust fund during their lifetime. It means you can provide an income for your loved ones for the duration of their life, and after that, the trust fund passes to whoever you choose, for example your other children or grandchildren. As the person with Autism will be legally entitled to any income from the Trust Fund, any amounts received will be taken into account in the calculation of means-tested benefits. They also need to be able to manage their finances as the income will be legally theirs and will paid directly to them.
It is really important to tell your other family members and other relatives what planning and Trusts you might have in place for your loved ones, as they might need to draft their own Wills to benefit the person with Autism appropriately. For example, grandparents might want to gift money or a share of their estate to their Autistic grandchild. If the money is paid directly to the autistic person, it might have an adverse effect and might bring a potential loss of means-tested benefits. This can be avoided if the grandparents left any assets intended for a person with Autism to the trust.
Trusts are wonderful legal instruments when it comes for providing for your loved one with Autism or other vulnerabilities, but they are also very complex. If you make a decision that Trusts are best placed to provide for your loved ones, it is very important that you take specialist Legal Advice.
If you are considering setting up a Trust we would be happy to have a chat to you first. If you have already set up a Trust and would like to review the arrangements please contact our Private Client team by calling 0330 0945 500, email email@example.com or complete our Contact Form and we'll get back to you.