Planning for a child with a disability

Ensuring the long-term security of your child is a priority for any parent.  Families who have a child with a disability often face unique challenges when it comes to planning for the future.  For those parents, it can be overwhelming trying to ensure financial security for their child, long after they are gone.  It is important to plan ahead wherever possible. Disability is a multi-faceted term and so naturally the planning process will look different for every family. Our solicitors at Clarkson Wright and Jakes understand how stressful these decisions can be and are at hand to help you with making advance preparations for your child.  

Planning for the Future of Loved Ones with Disabilities: The Importance of Wills and Trusts

The majority of us want to leave any wealth we acquire throughout our lifetime, to our loved ones. Doing so can help to ensure their financial security in the future. However, leaving money to an adult with learning or developmental disabilities can result in various issues, for example:

Legal Complications and Court Involvement

If the adult is lacking in capacity and is therefore unable to handle their own finances, there may be a need to apply to the Court of Protection in order to appoint a Deputy to manage their financial affairs. This process can be lengthy and expensive, which can unnecessarily eat into the funds that you left behind to support them.  This process can usually be avoided with adequate planning.

Mismanagement of Funds

Individuals with disabilities who are not able to comprehend the full value of money may not be able to adequately handle their finances or may be at risk of being exploited by others.

Impact on Means-Tested Benefits

An outright inheritance could affect means-tested benefits, potentially leading to the reduction or loss of crucial financial support for your dependent.

Due to the issues raised above, rather than leaving an inheritance directly to a child with a disability, trusts can be a useful tool.  Our solicitors have much experience in this area of the law and can assist you to create and manage a trust, as well as providing information on what might be the most suitable trust in your circumstances. 

If a Court of Protection application is necessary for your young person with a disability, our solicitors can also offer full support and advice on Court of Protection matters, for property and financial matters as well as personal welfare.

Potential Claims from Local Authorities

Where there is an absence of planning for a dependent lacking in capacity, this may potentially prompt a local authority to make a claim under the Inheritance (Provision for Family and Dependents) Act, arguing that reasonable provision was not made for the dependent.

Under these difficult circumstances, our team can provide legal support to resolve matters as far as possible.

Gifts to other Family Members

Some people consider leaving the money intended for their dependent to another family member who will take care of them. However, this approach poses risks, as the money could be used at the family member's discretion for other purposes.  Further, if the family member becomes bankrupt, divorced, or dies before your dependent, the funds could be at risk.

To effectively plan for your dependent's future, careful consideration is required in making provisions through wills or trusts. Creating a trust can be an excellent way to protect your child's interests, as it prevents them from directly managing or investing the funds, but also ensures that the funds are safeguarded and can only be used for the benefit of your dependent.

At Clarkson Wright & Jakes we are trust experts and can provide full guidance and legal recommendations should you need them.

The importance of making a Will

Having a valid Will is incredibly important, as it allows you to express your wishes in terms of how your estate will be distributed. Without a Will, the intestacy rules will be automatically applied which will then determine the way your estate will be distributed based on family relationships. Unfortunately, this can often lead to unintended consequences and may not align with your wishes. 

Furthermore, making a will allows you to:

Avoid Unnecessary Inheritance Tax: With proper planning, individuals can reduce potential inheritance tax liability on their estate, ensuring that more of their assets go to their chosen beneficiaries, including disabled dependents.

Appoint Executors and Guardians: Through their Will, individuals can appoint executors to administer their estate and guardians to care for any minor children.

Express Specific Gifts and Wishes: Individuals can leave specific gifts or sums of money to family, friends, or charitable organisations, ensuring that their intentions are carried out.

Things to Consider When Making Your Will

When you are creating a Will, it is important to take several factors into consideration:

Assets and Liabilities

Listing all your assets and their value will help determine how you should distribute your estate.

Family Members

Provide details of all family members, especially if you have a dependent with learning or developmental disabilities. This will help in deciding how to make provisions for them.

Choice of Executors

It is important that you select reliable and trustworthy individuals as executors to handle the administration of your estate after your passing.

Specific Gifts and Residue

Consider which loved ones you want to leave specific gifts to, as well as how to distribute the residue of your estate.

Consideration for Dependents with Disabilities

Plan for your dependent's future by setting up a trust or making specific provisions in your will to meet their unique needs.

Using Trusts to Plan for Your Child's Future

Trusts can be very useful tools when planning for the future of a dependent with disabilities, offering a safe and managed means of providing for their financial needs. Different forms of trusts can be established depending on the specifics of the situation, each with its own positives and negatives.

The three most commonly implemented trusts are:

Interest in Possession Trust

The beneficiary will receive all the income produced by the capital, but this might not be the most suitable trust for individuals at risk of losing means-tested benefits.

Discretionary Trust

A more flexible option where trustees will have discretion over when and how to distribute income to beneficiaries.

Trusts for Disabled People

Specifically designed for individuals with disabilities, these trusts limit the trustee’s discretion and provide more clarity for the beneficiaries.  They are usually more tax efficient than a standard discretionary trust.

Our expert lawyers can help you to determine which type of trust may be the most suitable, considering the needs of your disabled child, your family circumstances, and your preferences. Additionally, we can provide legal support and guidance with trust management where required.

Choosing Trustees and Their Responsibilities

When creating a trust fund for a disabled child, choosing the trustees must involve careful consideration. When choosing trustees, it is important to be objective and clear-headed, as they will carry the responsibility of fulfilling your wishes and managing the trust.

There are three types of trustees:

Lay Trustees

Normally a family member or friend, with no charge for their services, and often has in-depth, personal knowledge of the domestic situation.

Professional Trustee

This is a qualified advisor, often a solicitor. The advisor charges for their service and will provide expertise.

Trust Company

A company that specialises in managing trusts professionally, sometimes available on a not-for-profit basis.

Trustees have important responsibilities, including acting in the beneficiaries' best interests, seeking appropriate investment advice, and complying with trust laws.

Care Funding for a child with a disability

If you have a disabled child, you may be entitled to certain types of care funding, for example, your child may be eligible for what is referred to as a personal budget. This is a special type of funding provided by the local authority, to cover your child’s support and care.

Firstly, your child’s needs will be assessed, to create a support plan based on their educational, social and health needs. The amount of funding that your child will receive depends on various factors, including:

• The care services in your local area
• The needs of your family and your situation
• The type of support and care required

The Court of Protection

Where an adult lacks capacity to look after their own financial affairs and/or health and wellbeing, the Court of Protection may get involved to appoint a deputy to do so for that individual.

What powers does the Court of Protection have?

The Court of Protection retains the power to evaluate an individual’s mental capacity to make certain decisions for themselves. They then have the ability to appoint deputies to make ongoing decision on behalf of individuals who are lacking mental capacity.

They also have the power to give certain people permission to make one-off decisions for someone who is lacking in mental capacity. This body can deal with urgent or emergency applications where a decision must be made quickly, without delay.

The Court of Protection can consider applications to make statutory wills or gifts. They are responsible for making difficult decisions about under what circumstances someone should be deprived of their liberty under the Mental Capacity Act.

Our Court of Protection solicitors are experts in this area of law and would be happy to answer any questions that you may have regarding the Court of Protection.

Speak to our solicitors in Orpington, Kent about planning for a child with disability

Planning for a child with disability involves many different areas of the law such as Wills and estate planning, the Court of Protection and Family Law. Our solicitors at Clarkson Wright and Jakes are well versed in each of these different areas and will be able to explain to you in detail the significance of each with regard to your child.

We provide a friendly and professional service, keeping in regular contact with our clients to ensure the best possible future for their loved ones. We have a deep understanding of how much goes in to planning for a child with disability and work diligently to make sure that all plans made are legally airtight.

To get in contact with one of our solicitors, please call us on 01689 887840 or fill in our enquiry form.