Wills with a disabled child to provide for

[LaydeeC]

I am hoping someone will be able to point me in the right direction to help safeguard my son once my husband and I die.

He is 14 and autistic (also have a 12yo daughter). We do not currently have wills, neither do I know if I hold my mortgage as tenants in kind or common and not really clear about the difference (although solicitor did explain it to me when we bought the house almost 17 years ago).

Where do I go to get mirror wills written that would safeguard my children having to sell the house to pay the IH (live in London so will be subject to tax even though it is a modest three bed terraced house).

Is there some way it can be placed in trust - I really know nothing about such things and I'm scared of getting it wrong by seeking help from the wrong people. Do I need to do my homework and tell a solicitor what I need having sought advice from a Financial Adviser or will a solicitor know what we need to do.

much thanks in advance.

If you go to the small ads section, there is an advert for marlow wills - they did a great job for us.

She gives great advice on threads on here as well so will probably turn up in a minute :)

Sorry, I should have stated above that my intention is NOT to intentionally avoid tax that is due but to make sure that there is a way that my children do not have to sell the house as it will be needed for my son to live in as he is highly unlikely ever to be independent. And, of course, I can't rely on a this or a future government to ensure that he would be cared for.

I used to work at Mencap and they run a Wills & Trusts service. Monies are held in trust for children with disabilities so they are looked after.

www.mencap.org.uk/what-we-do/our-services/wills-and-trusts

Oh thank you both!
Sunny, I have just looked on the Mencap link you posted and have ordered their documents. Also prompted me to look at the NAS website (doh!) and they also have a similar guide it would seem.
Now need to make donations to both to cover costs.
Thank you again.

I would also highly recommend Mumblechum/ Marlow Wills. Excellent value and money well spent

DH and I have looked into this in regard to DGS who is disabled. We found someone (a company) which will
1 put our house into tenants in common (currently joint)
2 mirror wills to put each other share of the house into trust for dgs

This will allow us to live in the house etc but stop the state taking one half share to pay for nursing home fees etc. think this is along the lines you are wanting. Quoted £350. V reasonable.

sneezecakesmama, that is exactly the sort of thing I need to do. I've been putting it off but need to sort it out as you just never know what is around the corner do you.

When I read my post back, I was worried that people might get the impression that I simply want to avoid IH but that is not the case at all. I just want to make sure my son at least has a roof over his head when I'm no longer here to provide it for him. I think I've been putting it off because it is so upsetting to think about him probably not having any support network one day but I really need to pull my finger out and sort it,
Thank you all for your advice - much appreciated.

Hi OP, I would suggest that you make a will leaving part of your joint estate in a discretionary trust for the benefit of your son. This is partly to ensure that someone takes responsibility for ensuring that your son is properly looked after, and avoids the possibility of someone taking advantage of him when you are gone, and has the added advantage of your son's inheritance not excluding him from any means tested benefits he may be entitled to.

As a couple of other posters have kindly pointed out, I have a paid for advert over on Small Business Classifieds, titled "5* Will Writing Service Recommended by Mumsnetters". I'm very happy to answer any questions you may have either on or offline, with absolutely no obligation to instruct me.

wondered when you'd turn up Mumblechum. Better late than never assume you've been out enjoying the lovely british weather!

Yeah, we had a four day holiday in the Cotswolds and Cheltenham which was nice in between the lashing rain.

Gave up this morning and arrived back at lunchtime, luckily ds had just finished 4 days of washing up

Your slight issue is that the law around trusts etc. is subject to change without notice, as (especially at the moment) is the law about benefits and what is and is not means-tested, and you don't want to keep rewriting the will every 5 minutes to take that into acount.

What my Mum ended up doing was writing a discretionary will, ie one that sets out what the aim of the will is, in a letter of intent, but leaves it up to the executioners of the will to decide what the best way of achieving that is. The assumption is that will mean setting up some form of trust for a part of the estate at least, but whether that is a specialist one just for DD1 (different CGT rules afaik for a vulnerable person) or a shared one with DD2 or what will depend on the tax and benefit rules at the time and, of course, how much money there is to inherit.

The way I'd recommend doing it would be a standard trust for your dd until she's 18/21/whatever age you decide, and a discretionary disabled person's trust for your son. So the trustees have discretion (as implied by the title!) to pay money to or for the benefit of your son. The way I normally write disabled person's discretionary trusts is to cover things like holidays for the beneficiary, adaptations to their home, but also to give loans to the beneficiary, gifts to anyone who helps to look after them in a non-professional capacity, etc. The discretion of the trustees should be pretty wide in my opinion.

mumblechum and r3dh3d - thank you both for taking the time to respond. I am in the middle of talking to my mil about her will and how she sets her it out with regard to whether it would be beneficial to bypass my husband and leave her very modest property to my children (again in trust). In some ways this is much simpler as below ih tax levels and then I will be in touch with you mumblechum. It all seesm so complicated. I can't quite understand the discretionary trust thing. Would the house be sold and the proceeds placed in the trust? Or could he stay in the house (this being the most desirable on one hand but would surely barr my dtr from her share). My head hurts with it all to be honest and it is one of the reasons why I have stupidly ignored it for so long.
Thanks again both for the responses.

Obviously mumbles knows this properly, and I really don't, but fwiw:

Trust law was utterly buggered overhauled by the last government. It had been a common tax dodge, where the rich would bung stuff into trust and the family offspring would live off the trust fund and never have to pay inheritance tax because the trust itself never "died". The govt didn't ban trusts, but they made it less effective to put stuff in trust by putting an additional tax on the contents to make up for what they were losing in IHT. It's levied every 10 years based on the value of what the trust is still holding onto, so a trust is still a useful thing short-term, ie if you spend the contents before too many 10-year levies kick in. There are various sorts of trust, and it's explained in stiff legal terms on the HMRC website. But the most common is a "discretionary" trust and all that means is that it's set up to give the trustees (the people who are made legally responsible for it) a bit of leeway to decide what to pay and when.

Another relevant trust term is "vulnerable persons trust"; a disabled person who is not capable of looking after themselves may be exempt from the 10 year charge. It is possible to set up a discretionary trust to benefit both vulnerable and non-vulnerable persons, and as long as your trust accounts are clear and you can split the money out clearly, you can claim the revaluation relief for the vulnerable person's part.

I am not sure what the best way of managing the house ownership issue is. I believe one solution is that the trust can own a building for the use of the disabled person, rent it out to them at a fair rate, and then the person can claim housing benefit to that amount: one of the issues with making a will to benefit a disabled person is that you don't want them to end up owning assets which mean they do not qualify for means-tested benefits when clearly they will never work and the only reason they have inherited the assets in the first place is because their family know the state won't support them properly. But as I said, it could all change. I understand there was a lot of criticism from legal folk when the trust laws were revamped, and pressure to change them again. And I've heard the present government is keen on means-testing benefits and in particular removing all benefits from disabled people with assets, though whether that would extend to assets held in trust for them, I've no idea. But that's the sort of thing that Mencap et all should be keeping an eye on.

OP, I suggest that you treat the house ownership in the following way:

1 Remember that average life expectancy is 80 and 83 for you and your husband

1. Remember also that wills are written in ink, not stone.

Make a will at this stage on the basis that the trustees have discretion to keep the house on for the children and the guardians if appropriate until they're adult (this may not, however, be necessary or desirable), on the basis that you will review your wills once the children are, say, 21, and the re-do them to allow for a sale of the house once the second of you dies (in, what, 40 or 50 years?), and your daughter to get her half outright and the other half to go into a discret. trust for your son.

You should really review your circs every 5 years anyway, and make whatever changes to your wills as suit your family as those circs change