As the parent of a disabled child, it is likely that one of your many concerns is how your child is going to be taken care of after you die.
If you die without a valid Will, your assets will pass in accordance with the intestacy rules. Contrary to popular belief, your whole estate does not pass automatically to your spouse or civil partner. Your children will inherit part of your estate. On the death of the surviving spouse or civil partner, everything passes to your children.
When you have a disabled child, there are many reasons why it may not be appropriate for that child to directly inherit a potentially large sum. Firstly, it may adversely affect any means tested benefits or local authority funding that your child receives. As they are a vulnerable person, it may also leave them open to financial abuse from others. Last but not least, they may well not have the capabilities to manage their inheritance.
Preparing a suitable Will is the best way to ensure that your disabled child is provided for in the best way possible.
Key considerations for your Will:
How to benefit your child
It might be tempting to ring-fence a sum in your Will and leave it to a relative, with the hope or condition that they ‘look after’ those funds on behalf of your disabled child. This is not something we usually recommend and involves an element of risk. The request is not binding and they are not obliged to use the funds in the way you wish. Those funds will be treated as part of that relative’s estate and may no longer be available to your child if they die themselves. The fund could also be depleted in the event of that relative’s bankruptcy or divorce.
An alternative to leaving a sum with a relative is to include a trust in your Will, to which your whole estate, or your disabled child’s notional share of your estate, would fall on your death. This would protect the funds from the risks outlined above as the trustees have a legal obligation to manage the funds in accordance with the terms of the trust. It also provides flexibility to cater for uncertainty over what your child’s needs are going to be in the future. You could also provide for what happens to the ‘trust fund’ in the event of your child’s death.
It is also helpful to have a Letter of Wishes alongside your Will, in which you explain the reason for the Trust and how you intend for it to be used. Whilst such a letter is not binding, it serves as useful guidance to your trustees.
Your choice of trustees is key, as these are the people who would look after funds for your children. Ultimately, you should choose individuals that you trust completely. Often, people choose a family member, along with a trusted professional, such as their solicitor or accountant, to provide impartial advice and guidance.
If your children are only young, you may state in your Will who should act as guardians in the event that both parents die while they are under the age of 18.