Complicated questions about care and wills - disabled child

[drspouse]

OK so this is going to get long, bear with me!

We have 2 DCs, older one is 14 but unlikely to live independently for a while into adulthood (though his goal is a flat up the hill and he can at least cook a bit now!). I suspect he will eventually be able to, and will be able to work though maybe not full time. Younger one 11, probably won't go to university but I can see her doing a "gap" year teaching outdoor pursuits or similar so may be out the door sooner. Older one gets DLA, so will likely get PIP/have an EHCP into his 20s.

Wills-wise we have mirror wills which both put any money left to the DCs in trust till they are 23. Planning to up that till 25. My DF confirms he's left money only to me (and my DB) not directly to DCs. Need to get confirmation from my mum but there's always the possibility she's just left it to my DB and not me at all.

DH retired, I'm working part time though decent salary. Will probably retire in 10 years. We also have a rental flat which bumps up his pension/my salary.
I'm trying to plan for a) one of us being widowed and b) one of us being in care.

I know that even if just one of us is left in the house but a dependent adult lives there, they can't sell it.

I'm a bit more confused about what happens to: a) the pension one of us might leave for the other one to live on b) my life assurance [DH has a long term illness and being 10+ years older didn't take any out] c) the income from the rental flat.

I have just looked up my pension and it does pay to a dependent child IF you don't have a spouse when you die. I'm assuming this means if I die first then even if DC1 can't work due to disability, my pension will go to DH and when he dies it will stop.

I guess I'm asking for advice on how to protect the income we have because of our DCs being younger than your average pensioner/near pensioner, and also our older DC not necessarily being able to support himself.

I'm also concerned about our DCs getting lots of money in one go if we do both die without spending most of it on care fees (!) as DS in particular would not be responsible with large sums of money.

This does sound like the opposite of most people's "we want to save all our money and not spend it on care homes because we want to leave it to our children". But it is also concerning.

it sounds to me as though you need to look into trust funds for the children. Do you have a trusted relative or friend who would be atrustee for you? tother than that you'd need to pay for professional to do it.

One of my relatives is a solicitor and has been roped into being executor for all my aunts' and uncles' wills - more to the point he's also nearer our age and we have similar outlooks on life. I think he would be good as a trustee, thanks for the idea.

I'm also quite unclear about income from e.g. DH pension, his half of the flat income, if he should go into a care home. I know I and whichever DC is still there (unless it's DD only and she's working) would not have the house taken out from under us, but I'm less clear on the income.

Mencap run “wills and trusts” webinars for parents in your circumstances, might be worth booking onto one

Thanks - will look into that.

If DH needs care, his income will be taken into account for the financial assessment. Your income isn’t taken into account for his financial assessment.

For the financial assessment, DH’s main residence would be disregarded if you live there, his DC under 18 live there or a relative who is ‘incapacitated’ lives there. This is a mandatory disregard.

DH’s individual beneficial interest in the property that is not his main residence would most likely be considered in his financial assessment. There is no mandatory disregard. There is the possibility of a discretionary disregard, but it is unlikely if it is a rental property. It is meant for more unusual exceptional circumstances. Your individual beneficial interest in the property won’t be considered when looking at his financial assessment. It is the value of the individual beneficial interest in the property rather than being as simple as the total value of the property halved.

You might find this Age UK leaflet helpful.

Oh, that's really helpful, thanks.
For tax purposes we both earn half the rental income but in fact I own 90% as it's my former residence and DH owns 10% (this was at the suggestion of the solicitor).
So it sounds like we can't do much about the income, but we can be clearer about what will happen, and DH pension/rental income would likely be used to fund care (which is appropriate obviously) but for wills we need to do more about setting up a trust.
We also had a conversation about inheritance from my DPs - if we still have mortgage to pay we'd use it for that, but if not we'd use it for a small property for one or both DCs (as we live in a much cheaper area than my DPs!)

Just a quick point on trustees, from professional experience- as well as a trustee with some idea how trusts work (and how difficult and expensive they are), which you have in your solicitor relative, do also try to choose someone younger than you. A friend or relative 10 years younger and also with a financial or legal background would be ideal.

Good point. I can't think of anyone like that but will have a ponder.

A previous poster mentioned Mencap. They have a separate organisation that acts as trustee for those with a learning disability or autism, if that's appropriate to your situation:

https://www.mencaptrust.org.uk/