Evening and Weekend Home Visits Available In Horsham, Crawley & Surrounding Area.
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Providing for A Vulnerable or Disabled Beneficiary.
If you have a child or loved one who has Special Educational Needs or a disability, it is essential that you make provisions for them to ensure they are provided for and protected after you are gone. This can be set up during your lifetime or via a Trust in your Will. Using a Trust will allow you to provide your beneficiaries a regular income, ongoing care and support and help maintain their standard of living.
At Raine Financial we can give you the support and expert advice you need to ensure that your loved ones are protected and cared for when the inevitable happen. We can offer you a Free No Obligation consultation in the comfort of your own home at a time that is convenient to you. Appointments are available 7 days a week including evenings.
By using a trust you can provide for a disabled relative, child or friend, the trustees will have discretion to use the available funds to make purchases on their behalf, pay bills and provide an income stream. This is especially important if they receive means tested benefits which would be affected by receiving a lump sum inheritance or a large income, the trustees can adapt to the beneficiaries needs and circumstances as they change.
A trust could help support a disabled person if they:
A Trust will:
Leaving money for the benefit of a disabled or SEN child or relative allows you to appoint trustees to manage the funds on their behalf giving you the peace of mind knowing that they are protected by someone you trust and not by a representative appointed by the court who may not have any knowledge of your wishes or your family dynamic.
You can provide your trustees with a letter of wishes detailing how you would like them to act and your priorities.
Suitable Trusts for Vulnerable Beneficiaries.
There are 3 main Trusts that can be set up to look after a disabled of vulnerable person either during your Lifetime or in your Will. The most suitable type will depend on your personal circumstances and preferences.
1. Discretionary Trusts
These provide great flexibility with the trustees having discretion over the Trusts funds and being able to provide for each beneficiary according to their circumstances and needs as they change, when they will benefit and by how much. Directions can be given to your trustees via a letter of wishes.
The Funds held in Trust will not form part of the vulnerable person’s estate and will therefore not affect Means-Tested Benefits.
2. Life Interest Trusts
A life Interest Trust allows you to provide for a vulnerable beneficiary during their lifetime, they will be entitled to any income that the Trust produces and can benefit from any other assets held, such as remaining in the family home for the rest of their lives after which the property and remaining assets will be passed to your other chosen beneficiaries.
3. Vulnerable Persons Trust (Disabled Persons Trust)
These Trusts operate in much the same way as the above discretionary trusts but offer specific tax advantages. Trustees have flexibility over how Income & Capital is employed to benefit the primary Vulnerable beneficiary. Other beneficiaries can be included within this type of trust but in order to receive the tax advantages there are certain rules that must be met.
To qualify for this type of Trust the Law states that a Disabled Beneficiary is a person who by reason of a mental disorder as defined by the Mental Health Act 1983 is incapable of administrating their property or managing their affairs or a person who is in receipt of certain State Benefits Including:
The requirements to receive Tax benefits for a Vulnerable Beneficiary Trust are firstly that the principal beneficiary qualifies as above, secondly there are certain restrictions on who else can receive benefits and how assets are used during the disabled persons lifetime, these include:
If these conditions are met the tax advantages are more favourable.
Capital Gains Tax on most Trusts is payable on the disposal of Trust Assets above the tax free Trust allowance which is 50% of the personal allowance but a Vulnerable Beneficiary Trust can use the full £3,000 pa.
Income Tax within a Trust is payable at a rate of 45% whereas for a Vulnerable Beneficiary Trust income tax is payable at the beneficiaries marginal rate which could be nil or 20% depending on their other income streams.
Setting up a Lifetime or Will Trust can ensure that your loved ones are provided for after you are gone and if you are looking after a child or relative that has extra needs then it is advisable to plan your estate thoroughly, this not only includes making provisions in your Will but also thinking about what would happen to your loved ones if you could no longer make decisions for them due to Old Age, ill health, dementia, stroke or injury. Having a Lasting Power of Attorney in place can allow you to continue to provide for your loved ones when you are no longer able to.
At Raine Financial we can help you put the protection in place that your loved ones deserve to ensure they are protected and provided for in the best way possible.If you would like to discuss the options available to you regarding Lifetime Trusts, Will Trusts or Lasting Powers of Attorney please do not hesitate to get in contact and we will deal with your enquiries in a professional and sensitive manner. Call us today on 01403 432866 or email martin@rainefinancial.co.uk
If you would like to discuss the options available to you regarding Lifetime Trusts, Will Trusts or Lasting Powers of Attorney.
Call us today on 01403 432866 or email martin@rainefinancial.co.uk
Raine Financial Ltd
50 Hurst Court, Horsham West Sussex RH12 2EW
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Raine Financial Ltd