people living with disability
If you are living with a disability then you prepare a will in the same way as anyone else. The same issues need to be considered.
If you are writing a will to include a beneficiary living with a disability, whether it is visible or invisible, you need to take extra care and advice when looking at what you need to do.
Individuals living with disabilities are vulnerable. They are vulnerable to undue influence and financial abuse, they may never be able to live independently, they could lose benefits if they inherit too much money, if they receive income their benefits could be affected. We see all to often loss of benefits for a disabled individual where their parent does not take appropriate advice in relation to their wills. It is not just wills that can cause problems. Whilst some people take advice and put in place appropriate wills often they forget to review their pension provisions. Pension schemes can make provision for financially dependent children living with disabilities. If you are going to plan, take advice on both areas not just one; don't do half a job!
Many clients start by saying they are going to exclude a disabled beneficiary in their will because inheritance will cause them problems in the future. This is an old school way of thinking. Other clients say they are going to leave assets to siblings so they can take care of their disabled brother or sister. This will place a burden on the sibling for the future to always make sure their disabled brother or sister has what they need. Why not just leave your disabled beneficiary some money in your will like you would anyone else? You can do this by using a trust.
Trusts can be technically complex so let's look at it is easy terms. Think about a trust as a box of chocolates. Your chocolate tin is the trust. It is a hard, protective casing which looks after the chocolates inside the tin. The chocolates are your different assets. The different flavours represent different assets. We always talk about a tin of roses! Your strawberry cream represents your premium bonds, the coffee cream represents the shares, the caramel hazelnut represents your home. Your chocolates are all mixed in the chocolate tin. You secure the tin by closing the lid and then hand the chocolate tin to someone you trust to look after. This person you trust is called a trustee, the individual you empower to look after the trust. You do not however give them free reign to do what they wish with the trust because you prepare a rule book which tells them when the trust can be opened, by taking off the lid, who can benefit from the assets in the trust, the chocolates and when. It is because the trustee looks after the tin and has to choose to follow the rules you impose, that the funds in the trust are protected from being included in benefit means testing or future care fees.
So, shall we start to look at the things you need to think about when making a wil with a trust?
Executors: you need to think about the people you trust enough to manage the responsibility of your estate following your death. These individuals are going to be the trustees of your trust when the administration of your estate is over. Are they over eighteen? Can they deal with money management? Will they disagree with your other executors? Could there be a conflict of interest? An executor has to identify the assets and liabilities in the estate, calculate the total estate and work out whether it is subject to Inheritance Tax. They need to complete Inheritance Tax paperwork and swear statements for the Probate Registry. Once all this has been done they then need to close the assets, pay the bills and distribute the estate. Once the administration has finished the executors change their hats and become trustees. Your executors and trustees can be the same, they can be different. Conflict is still and issue with trustees so you may wish to consider appointing and independent person as well as or instead of family members.
Funeral wishes: a will is an ideal place to record your funeral wishes. You can go as far as you like with instructions or you can keep it brief. You would be surprised at some of the things that people want to do!
Guardians: this is probably more important for people with children under the age of eighteen but is really important for those with children under the age of eighteen living with a disability. Your guardians will be the individuals you want your children to live with in the event that both of their parents have died. You will be aware of the level of care that your child will need in the future. Will your guardians be willing or able to cope with what will be required?
Gifts: Do you want to make any monetary gifts or gifts of specific items. These are often made to charities, close family and important friends.
Residue: This is what is left once everything has been paid and any gifts have been made. This is the pot you get to divide between those who are important. How old do you want your beneficiaries to be before they receive money? Remember, when planning what you want to do have you thought about the consequences of what would happen if your first choice of beneficiaries died before you? Would you want their children to inherit from your estate or would you want someone else to benefit? Do you want to put all of your estate into a trust or just a percentage of it? what rules do you want to impose on your trustees about when money is released and what it is used for?
When you look at making a will your wishes are of the utmost importance. However, you do also need to consider the impact of Inheritance Tax and care fees on your wishes as these can significantly alter what you have left to give.
There are different types of trust that can be used and prices vary according to your circumstances. For more details on our prices for our will services click here