How Can A Trust Look After Your Loved Ones?

Carers Week comes by once a year to remind us of the important role that unpaid carers play in our community. The carers of the UK are incredibly valuable, and as of 2021 there were 5.8 million of them. 

We considered ways in which we could help bring carers peace of mind should they pass away before the person they care for. Our conclusion was a Trust.

Trusts can be especially helpful in the case of a beneficiary being disabled, too young or incapacitated. Meaning that they are either unable to, or do not know how to best make use of an inheritance should their carer pass away.

This is where setting up a Trust, appointing a Trustee and recording your wishes comes in. At Fidelis Legal Services we offer Trusts, but also Professional Trustee Services. There is no requirement to nominate us as Professional Trustees and our clients are free to choose whoever they like, with many selecting more than one. 

As we are a limited company, it is not an individual that would be appointed as Professional Trustee. Instead, the company acts as a Trustee meaning anyone within the Trusts management team can act. This means that there is always someone available to act as Trustee, and will not be affected by potential sickness, holiday etc. There are also the other inherent protections that a limited company provides.

When a client passes away, leaving a Trust with beneficiaries who are particularly young or unable to handle responsibility with the inheritance, we could then manage the distribution of the Trust assets as Professional Trustees. In this role we would distribute the bequests or use the Trust to purchase things for the beneficiary, following the guidelines given to us. The most common types of Trusts which work like this are:

• Residuary Discretionary Trust: Where there are concerns regarding a beneficiary, for example reduced capacity or potential loss of means tested benefits, you can exercise more specific control of your estate.

• Disabled Persons Discretionary Trust: Trustees look after the interests of those who are incapable of managing their affairs. Additionally, income received within this Trust benefits from a lower rate than the typical Trust tax.

  
  

A carer may choose to leave directions in their Will to set up a Trust in case something happens to them and there is no other person to aid the care-recipient in funds or care.

This case study based on a real client’s story makes an excellent example of how a Trust can benefit carers.

Case Study – Disabled Person’s Trust 

Please note that names have been changed for privacy reasons and client confidentiality.

We are Trustees for a gentleman called Steve, who had sadly become almost totally paralysed due to medical conditions. His carer, also his mother, has passed away, leaving behind a Trust and naming us as Professional Trustees. This was set up as a Disabled Person’s Trust. 

Due to his condition, we immediately began managing his inheritance through the Trust. It is especially important for someone with his needs to not receive a lump sum straight away as he would struggle to manage it by himself. However, he did not need to use his bequest immediately. This was due to his condition having developed to the point that he qualified for fully funded NHS care. As such, we have been holding his inheritance and investing funds to generate growth until he requires it.

The Court Appointed Deputy, his brother, has been keeping us informed and helping us to understand Steve’s needs. A Court Appointed Deputy is required should a person lose capacity without an LPA in place. It was recently reported that that Steve’s condition has improved due to the care he’s been receiving. This is delightful news for us to hear, but what happens now?

Whilst in care, Steve has not required any funds from the Trust. It is our duty as Trustees to grow the funds and achieve the most out of the funds in the Trust. This means we have a duty to invest the money, typically in a high interest account to ensure that it doesn’t get eaten up by fees, which even if small can add up. The added benefit of this is that the Trust then grows and ends up as a larger sum for the beneficiary by the time they need it.

Should Steve’s condition continue to improve, there are many new and different things he may then require. As Trustees, we would then investigate and buy these things for him from the funds. For example, he is likely to benefit greatly from a higher tech wheelchair, allowing him a lot more freedom. It would also be important to provide financial support should he no longer qualify for NHS fully funded care.

We may not be carers, but we have both the carers and beneficiaries’ best interests at heart. We do our best to carry out Steve’s mother’s wishes and ensure that he receives the care he deserves but can also enjoy a more fulfilling life where possible.

Our Trusts Management team supports people like Steve daily, both young and old. For carers, a Trust can be that peace of mind that should something happen to them, their loved one is well protected and so is the money left behind for them.

Trusts don’t have to be solely for incapacitated or disabled beneficiaries; we offer a wide range for families of all descriptions. 

Let us help you look after your loved ones once you are gone, or you can appoint a Trustee yourself. It is not uncommon to have more than one Trustee. Whichever option is best for you, we’re here to help with any advice you may need about Trusts, so get in touch.