Trusts for the Disabled

If you have a child or dependent who suffers from a disability, you will no doubt be concerned about how they will manage in the event that something happens to you. A Disabled Person’s Trust can give you the peace of mind that you are providing for them after you have died.

At JMW, our friendly, expert solicitors can help you setup your trust with the minimum of hassle, giving you confidence that your wishes will be carried out in the event of the unexpected.

To speak to a solicitor about trusts for the disabled, get in touch by calling us on 0345 872 6666 or by filling in our online enquiry form and requesting a callback. 

What is a Disabled Person’s Trust?

A Disabled Person’s Trust allows you to put away assets to be used for the recipient’s benefit during their lifetime without affecting their right to receive means-tested state benefits. This can include covering expenses, such as:

  • Daily living costs
  • Care fees
  • Accommodation fees

To qualify for a Disabled Person’s Trust, a disabled person is classified as:

  • A person unable to administer their property or manage their affairs because of mental disorder as determined by the Mental Health Act 1983
  • A person in receipt of attendance allowance or disability living allowance (DLA) by virtue of entitlement to the care component at the highest or middle rate, or an equivalent payment (for example, Personal Independence Payment)

A trust can be set up either during your lifetime or by will.

Why Should I Create a Disabled Person’s Trust?

As well as ensuring a disabled person’s means-tested state benefits are protected, a Disabled Person’s Trust receives special tax status when compared to a standard trust. Tax benefits include:

  • Paying Income Tax based on the disabled person’s position rather than higher trust rates
  • Utilising the disabled person’s £11,000 Capital Gains Tax allowance before the tax is due
  • Not having to pay Inheritance Tax (IHT) on transfers out of the trust to a disabled beneficiary
  • Not being subject to the 10-year IHT charge

Assets transferred into a Disabled Person’s Trust are potentially exempt transfers, meaning if the transferor remains alive seven years after the transfer, there will no IHT to pay.

Talk to Us

For more information, or to speak to a solicitor about the process of setting up a Disabled Person’s Trust, call JMW on 0345 872 6666 or complete an online enquiry form and we will get back to you. 

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