What should I think about when leaving money to my child with learning disabilities?
Many parents worry that their son or daughter will not be able to manage a lump sum of money without help. Another common concern is that inheriting a large sum of money may leave their relative or friend vulnerable to financial abuse.
Most people with learning disabilities receive some form of state benefits. Receiving even a moderate legacy may mean that they will lose their entitlement to some means-tested benefits. This can include income support and housing benefit. In addition your child may have to contribute towards their care costs. Your child’s inheritance may be used up quickly if they lose their benefits and have to use this money to pay for everyday living expenses.
Should I leave my child's inheritance to someone else to look after
Some parents consider leaving their child’s inheritance to another relative or friend to look after. This can be quite a responsibility to place on your relative or friend and we would not recommend this. Although your chosen person may love your child dearly and can be trusted implicitly, life and circumstances can change. Your chosen person may find it difficult to fulfil their role, perhaps if they move away from your child or become incapacitated in some way. Your child could also be disadvantaged if your chosen person divorces, becomes bankrupt, dies without making a Will or fails to make provision for your child in any Will they do make.
In Scotland, children have a legal right to inherit a share of their parents' estate. If you do not leave money to your child with a learning disability, there is a risk that another relative or even the local authority could contest your Will. This could be distressing for your child at an already difficult time.
Setting up a Trust can help you to avoid these difficulties.
Should I think about setting up a Trust?
Creating a Trust can be a great help and comfort to people who want to leave money to a family member or friend who has a learning disability.
There are various types of Trust, which can be used for different purposes. It is important that you talk to a solicitor who knows about Wills and Trusts. A solicitor can help you with all your legal and financial needs such as inheritance tax planning, powers of attorney and guardianship orders. It is important to think about these matters when making plans for the future.
ENABLE Trustee Service also has a list of solicitors we work with who are experienced in this area.
The following organisations can also help you to find a local, experienced solicitor:
- The Law Society of Scotland
- The Society of Estate and Estate Practitioners