Savings account for a child with disabilities - any advice? Is what I want to do even possible/legal?

[TheAlmightyGlom]

I'm a single parent and full time carer for my 11 yr old DC who is autistic and currently not in school (trying to find a suitable one). I'm claiming UC and carers allowance, and live in a privately rented house.

I'm due to inherit £10k in the very near future. I want to put £5k into a savings account for my DC but I don't want them to have automatic access at a pre-arranged age! As I don't know what their capacity will be like by 18/21/25 - they're high functioning in that they are very clever and articulate but their daily living skills and social skills are more like that of a 4 yr old atm, for example. But I want them to have some money for when they're older and need things - they may not be able to work so I want them to have a small cushion.

My bank have said the only way to do this is to have the money in a savings account in my name that I can transfer to them when I think it's the right time, with them named on it but having no access to it until I transfer it to them.

Is there any way of doing this so that it's in their name and I don't have access to it? Otherwise I will have to keep it in an account in my name, but this means my UC will be affected and I only just manage our outgoings as it is so it'll just get spent if that happens. The other £5k is going to buy us a newer car (current car is an MOT fail waiting to happen), clear some debt, and hopefully leave about £1.5k in my savings for emergencies or moving costs if our landlord decides to sell up (a permanent worry 😬).

I don't want to commit fraud btw, I want £5k locked away for my DC for their future and never to touch it myself, but someone needs to have some control of it as they may well not be able to manage money as an adult. There is no family I can trust to manage it for them unfortunately and the will can't be changed now as the writer no longer has capacity to do so. But is this going to be considered deprivation of assets by the DWP? Should I just spend it on living costs until it's gone instead?

I wouldn't , it won't help them in the future tbh . We have not got any savings in my sons name for this reason and have changed inheritance .

Really? Oh... It feels like the right thing to do though. I don't have anything to leave them as an inheritance and probably never will as I doubt I'll ever be able to buy a house!

Under £6k in savings won't affect your UC at all.

Hi OP Mencap has advice on setting up trusts to put savings into. I’m not sure if the cost of setting one up would be prohibitive though.

The tricky part is if the savings affect your benefits then they might affect your child’s in the future. But I agree instinctively it feels like the right thing to do and is a lovely thing for you to consider doing with the money.

You need to be careful as giving 5K to your child could be seen as depriving yourself of capital and UC will still treat you as though you had the money and make a deduction to your benefits.

Is it possible for the 5k to be paid in your DS name?

I should have said, I have just under £2k savings of my own already in a govt "help to save" account and a final bonus of nearly £600 due in January when the account matures. So I'd be well over the £6k limit unless I just go on a spending spree. But I'd rather it was safe for DC's future tbh if that's at all doable.

I vaguely looked at trusts but for such a small sum I think it's not worth the costs involved? I'll look again though, thanks for the reminder @RedeeeOrNot

No, the person who is leaving it to me has dementia and can't change their will now. They are expected to die in the next few weeks.

I don't want to do anything that comes under deprivation of assets. There should be different rules for people with disabled children to consider though in my opinion as it's not as simple as saving for a non-disabled child.

You can ask whoever is executor of the will to "vary" it. That has to be agreed by all beneficiaries but as youbare just asking to alter your share that shouldn't be an issue?

Problem with disabled kids having assets is that it is taken into account for their own benefit claim layer on so PIP at 16yrs old or whatever.

Can you have it in a children's type account which your child can access at 18 for now but think about what you do with it before they get to that point so that you can still access it. Things might have changed a fair bit in 7 years.

I'm currently looking at a similar position but without the UC complication...

I agree that different rules should be in place for disabled children. Disabled people are penalised and kept from accumulating any wealth.

would it be possible to buy something tangible that doesn’t lose value for your DS so that he has an asset to sell in the future?

This. We have a discretionary trust set up for my sister for any potential inheritance (may not be any!) We went to a mencap online seminar which was really useful.

You can set up a special trust fund called a disabled persons trust fund. It cannot be taken into account as savings when applying for benefits. We are about to do this as part of drawing up new wills. It costs about £250-300 to do a will but November is charity wills months so you can often get one done a lot cheaper. We are also not sure if our son will have the ability to manage their own finances. We have been told we can either get a solicitor to talk it through with him when he is 18 and if he has the capacity to understand, he can sign something agreeing for mummy and daddy to help with managing his money. If he doesn't have capacity we will have to go to court and apply for power of attorney for his money and medical stuff.

Not sure whether putting the money in here would count as deprivation of assets from you though? I would hope not.

Discretionary trusts don't effect benefits. It works like a pot of money that someone else manages -so in my sister's case of there was ever anything in there I could use it to say pay for her to go on holiday etc.

Thanks, this is giving me things to look into! I've never heard of a discretionary trust but I've just signed up for a mencap seminar on trusts and wills.

Not sure it's really enough money to be worth the cost etc of a trust but I need to find out.