To think that parents cannot leave money to severely disabled offspring free of IHT

[Noras]

Frankly I have been quite upset about farmers kicking up a fuss about IHT when they can transfer 3 million pounds of wealth IHT free and after that it only costs 20% which can be paid over a decade interest free.

As a parent of a disabled adult child I can only transfer one million pounds like anyone else and any unpaid IHT has to be paid over 10 years with 7% interest due.

We have other kids and can’t exclude them from our wills so that eats into the IHT allowance.

My son will struggle to work in any form of paid job.

I was discussing his placement in supported living with a social worker yesterday as a pretty likely destination

His life will inevitably be one of benefits eg universal credit and PIP

We have left % more to him due to his profound needs.

Our combined estate will face IHT charges especially with the fiscal drag.

So through no fault of my son he will live in relative poverty except for what is left after IHT into a vulnerable persons trust.

My son is used to nicer things eg holidays/ clothes etc and has some awareness of his current nicer life style even if he is not that driven by material things.

We would have to deprive ourselves of a decent retirement to ensure he is decently provided for,

I am heart broken to have given birth to someone who will live in relative poverty assuming he has a long life and the monies inherited have to cover say 45/50 years.

I am not the only parent waking up at 3am in fear of their kid’s future it’s a well known thing about parents of kids with disability.

AIBU to think that the Government should allow an IHT allowance for dependants who are classed as high needs eg PIP high or mid levels eg not really able to live independently etc? I can’t believe that they make no allowance in IHT terms for the disabled. As it is his care and needs have been an additional expense to us throughout his life eg 1:1 swimming lessons ,Ed Psych reports, SALT, private OT , personal trainers etc. This always exceeds disability benefits.

Sorry £3000 above benefits.

But a live on benefits I think is dire. That’s why I can imagine why anyone would choose this unless disabled unless misguided, depressed, lacking mentoring, self belief or unlucky.

Please read thread and yes we have had a vulnerable wills trust written into our wills.

Yes I have done all that and the other DC were fantastic and said ‘you have done so much for us already.’

We have set up a trust on our wills. A lifetime trust will create administration and tax charges. Also we don’t know how much money we will need at retirement as yet.

Do you honestly think your children will live for 50 years after you die? The average life span is around 84. The average age for having a child is around 28. So if you live an average life, your DS would be 56 when you die. I really doubt he’d be 106 by the time he dies!
Whilst I can see that having a severely disabled child would cause a parent to be worried about what happens to the child when the parents die, in your case, your child has siblings who would hopefully help to support him once you’ve died. The comment about treating your DC equally is concerning - your DC are NOT equal if only 1 is disabled. You should be treating your DC equitably, which might mean leaving a greater share of your estate to one over the others.
Ultimately, this has nothing to do with farmers though.

There is specific planning for this, but it requires setting money aside in your lifetime (which is sensible as your wealth might get used for your care and your DC will still need money for their care) and using a disabled persons trust which are subject to a preferential IHT scheme. You can’t do the same for your non disabled children as the government accept a different regime is needed in this case.

Clearly you had not read anything that I have written. My other kids have said ‘Good on you and of course DS needs more. ‘ Please don’t make assumptions out of nothings as if colours the thread. I’m really proud of DC as they are very selfless and also self driven.

I would like info on this as there is no specific IHT preferential schemes that I’m aware of. Also assets going into any trust occur usual CGT charges as the rules were changed a few years ago.

My son has complex needs. We have set up a vulnerable persons trust for him. If/ when either me or dh die rather than passing on to each other their part of the house and most of the inheritance (insurance has to be enough to pay balance on mortgage) goes half into trust and half to other ds. If the serving spouse then wants to move we can do we just have go get trustee permission (family members). Ds2 can't sell the house until ds1 doesnt want to or cant live there (not decided by la). When the other dies half of the rest of the inheritance is split again with ds2 going into trust. We've specified what the trust can be used for and who the trustees are. The trust can't be taken into account for benefits or contribution to social care so ds2 still gets what he would.

Ds2 won't have children so when he dies anything left in trust goes to ds1 or his descendants and if not others we've specified in order.

We did our powers of attorneys for each other at the same time and a will. With everything registered and the fees to stop each other automatically getting the house, it was under £1000.

Worth looking into.

Ultimately, this has nothing to do with farmers though.

this is clearly a complex issue so maybe a new thread to seek as much advice as possible. But as you say you have taken that advice so this is clearly just to bash farmers. What is your goal with this post?

Have you looked into how complex their estate market planning will have to be? So complex some are just considering suicide before April. FFS I can’t believe I live in a country where farmers who work their arses off are being blamed for disabled people not having enough money.

Thanks that’s a lot of assumptions based on averages.

Yes I think it entirely feasible that my DS will be on this earth 50 years without me.

If you read the thread I will leave more to disabled DS and other DC have applauded that. However I want to leave them something and also the fact is that life is tough for young people with house prices etc.

Most disabled people don't have rich parents so the state should be providing an acceptable level of care to all (but obviously it won't be luxurious)

Can your child's siblings help care for your him after you've gone in terms of keep an eye on him , buy him nicer clothes for birthday, Christmas, maybe pay for a holiday for him occasionally?

Pass the money 7 years before you die and no IHT

It's your choice and privilege to be able to leave money to his siblings too, I don't see why you expect to be iht exempt on order to leave your able bodied children loads of money, when the majority are not getting anything like this advantage

To be honest most poor people did not cause their poverty - clearly you think they do and that's affecting your stance on this. The rich (of which you are one) must contribute more to improve care for all disabled people.

https://www.gov.uk/trusts-taxes/trusts-for-vulnerable-people

but this might be hard to understand without a working knowledge of trust taxation. If you google IHT disabled persons trust the AI summary it returns is pretty accurate.

But basically creating a disabled persons trust doesn’t create an IHT charge like a normal trust would.

There is no CGT if you put cash into any trust, and ironically there is no CGT if you put any asset into a normal trust - but there is CGT if you put an asset stood at a gain into a disabled persons trusts, so generally better to put cash in and buy assets in the trust if need be.

It wouldn’t be added to benefits. He would get none as he has more than 16k in savings. You need to speak to a financial advisor about putting it into a trust. If you are able to, it would be worthwhile putting some in now so that it won’t be subject to IHT (more than 7 years before you pass)

Lot of people work their arses off as you put it but can’t pass 3 million pounds of assets to their kids with then only a rate of 20% interest free.

Also do you have any idea how many parents of disabled kids have comtemplated suicide because they can’t bear thinking about their kid’s future.

The harsh reality is that the required tax tax is x - that is formed by taking tax of ABCDEGHIJ etc

So for every allowance given to farmers there might well be a cut in social care or more tax on parents of disabled kids. An allowance has to be paid for by somewhere.

In a fair world there would be zero lifetime gifts and all people would pay an IHT rate of 20% across the board with no exception for family trusts etc In an ideal World the gentry would also pay the tax.

A vulerable persons trust is exempt from a benefit claw back and social care costs.

My parents are doing this. (I said to do it) Their house will be left to my sister and disabled brother. My brother lives in their house which is inaccessible for me

I’m not the one who started with the comparisons you were. I would never just start making any comparisons for parents with disabled children. So if you want to make compassions - you need to listen to the comparisons.

so - they are going to tax the farmers. Do you think this will have any impact on your situation? If they sold all the farms in the country, do you think the govt would give you more? Is that what you want?

As the parent of a disabled adult you can set up a disabled adult trust outside IHT. I am surprised how many in your situation are unaware of this.

www.affinitytrust.org/support-us/our-wills-and-trust-service/?msclkid=24cabd09b0bb11b59adcda498268c78e&utm_source=bing&utm_medium=cpc&utm_campaign=Disabled%20Persons%20Trust%20-%20Search&utm_term=trusts%20for%20vulnerable%20beneficiaries&utm_content=Search%20-%20Caring%20for%20adults%20with%20%20learning%20disabilities

Apologies for that link. Just google disabled adult trust england and you will find a number of examples.

Exactly - that’s literally what I’m saying. It needs to be in trust. Is it already set up and is your will specific about it going in there?

This is easily avoided if you set up a trust with your disabled son as beneficiary and your other children (and yourself until you die) as trustees. You then move all your assets into the trust with the trust deed specifically saying what those assets can be used for (ie the care of your son).

Speak to a lawyer. Easily done. No need to fret.

Farming impacts everyone because we need to produce as much of our own food as possible for food security reasons. Most family farms don’t have the cash sitting there to pay the IHT and most of them don’t generate enough income to pay it over 10 years either.

The more and more you post, the less sympathy I have for you.

Well yeah, we'd all like our children to have the 'finer things' in life but he doesn't have any more entitlement to that than anyone else does just because he's disabled. Quit whining and see an actual financial advisor. The fact you've mentioned the inland revenue suggests you're stuck in the past in more ways than one...