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  • Inheritance trust funds
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    dyna-ti
    Full Member

    Anyone done this ? or know any relevant info

    Got a relative who is getting on and is interested in looking to put any inheritance to their (adult)kid who is severely disabled and on benefits, so they don’t lose those benefits into a trust fund

    Their initial idea was to use some of the funds to buy the home they’re in so they always have that security, but owning the house would put them well above the £16k threshold that means tested benefits would be stopped at.

    Any info would be well appreciated as this is praying  on the parents mind. They don’t want to pass on knowing their child might be left in financial constraint.

    kormoran
    Free Member

    Edit. Misread post

    chrismac
    Full Member

    We have one. The thing you have to be careful with is that if a house is I. The trust and then sold at some point in the future you might be subject to capital gains tax on it. Something to have checked by whoever sets it up for you. You also need to check if the 7 year gift rule applies if they put assets into a trust. It’s something that was looked at to try and stop inheritance tax avoidance

    matt_outandabout
    Full Member

    I had a friend who I am trustee of his disability trust.

    You need proper, good, trusted advice from a solicitor with knowledge of tax and legal implications.

    I can find out my friends solicitor if that would help.

    Dickyboy
    Full Member

    so they don’t lose those benefits into a trust fund

    Playing devil’s advocate, why shouldn’t they lose benefits if they inherit enough to look after themselves financially?

    I can understand if a trust is required if they are not financially competent but for the reasons you state, nope.

    1
    poly
    Free Member

    Got a relative who is getting on and is interested in looking to put any inheritance to their (adult)kid who is severely disabled and on benefits, so they don’t lose those benefits into a trust fund

    IIRC *most* disabiity benefits are not means tested on assets, and even most benefits that are tested on assets ignore your main residence.    Obviously needs specific advice from experts, beware that if your expertise is selling setting up trust funds the answer to every problem can look like a trust fund!  The other issue is that all benefits rules are subject to change – you could spend a lot of money setting up a trust to maximise the position and before it is actually used the government of the day has changed the definitions / scope.

    mattyfez
    Full Member

    Yeah this needs some actual qualified advice… from a solicitor that has experience in wills, estate planning etc.

    johndoh
    Free Member

    Playing devil’s advocate, why shouldn’t they lose benefits if they inherit enough to look after themselves financially?

    Any additional help a severely disabled person can get by careful distribution of their inheritance seems perfectly reasonable to me.

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