Special Needs Dependents: Will and Trust Planning in the UK

Important Legal Disclaimer: This article provides general information about estate planning for families with disabled dependents and does not constitute legal, financial, or benefits advice. The rules governing trusts, benefits eligibility, and tax treatment are complex and fact-specific. For advice specific to your individual situation, you must consult a qualified solicitor specializing in disabled person's trusts and a benefits advisor. WUHLD's online will service is not suitable for wills requiring disabled person's trusts or discretionary trusts; these complex legal instruments require specialist solicitor input. Making errors in special needs planning can have serious, irreversible consequences for your loved one's benefit eligibility.

Rachel thought inheriting £65,000 from her grandmother would change her life. Instead, it destroyed it.

Rachel, 28, has severe learning disabilities and had been receiving Disability Living Allowance, Employment Support Allowance, and Housing Benefit—totalling £18,400 annually in support. When the inheritance hit her bank account, she immediately lost eligibility for all means-tested benefits.

Within six months, the entire inheritance was gone on care costs and living expenses that benefits had previously covered. Now the money is spent, but she still can't reapply for benefits for years. Her mother, who thought she was helping, is devastated.

This scenario happens more often than you'd think. According to Scope UK, even inheritances as small as £6,000 can affect benefit entitlements for disabled people. Yet between 50-60% of UK adults have no will at all, and many more have wills that accidentally disinherit their disabled dependents by leaving money directly to them.

If you have a disabled child, partner, or other dependent, standard will planning doesn't just fail to help—it can actively harm them.

This guide explains how to protect your disabled dependent's financial future while preserving their vital benefits. We'll cover disabled person's trusts, discretionary trusts, guardianship arrangements, and the legal mechanisms that keep families safe. This specialized planning builds on principles from fair estate distribution, comprehensive asset protection, and appointing proper guardians while addressing unique disability-specific requirements.

Understanding the Benefits Problem: Why Direct Inheritance Is Dangerous

When you leave money directly to a disabled person in your will, you're not just giving them an inheritance. You're potentially eliminating thousands of pounds in annual benefits they depend on.

Here's how it works: Most means-tested benefits have capital limits of £6,000 and £16,000. If you have savings below £6,000, they're disregarded. Between £6,000 and £16,000, the DWP assumes income from your savings and reduces your benefits accordingly. Above £16,000, most means-tested benefits stop completely. That's why trusts for children structured properly become essential for disabled dependents' long-term security.

The means-tested benefits affected include Universal Credit, income-based Employment and Support Allowance, income-based Jobseeker's Allowance, Income Support, and Housing Benefit. These can total £15,000 to £20,000 annually—far more than the income most inheritances would generate.

Non-means-tested benefits like Personal Independence Payment (PIP) and Disability Living Allowance (DLA) aren't affected by inheritance. But the means-tested benefits often cover essential living costs and care.

Consider Emma's situation. Her 26-year-old son receives £18,200 annually in means-tested benefits. Emma's will leaves him £30,000 directly. When Emma dies, her son loses all means-tested benefits the moment the money reaches his account. Within two years, the £30,000 is gone on care costs and living expenses. He then faces a lengthy process to reclaim benefits—if he can prove the money is genuinely spent and wasn't "deliberately deprived."

This isn't about gaming the system. It's about using legal trusts to ensure your loved one has extra support without losing the safety net Parliament specifically designed to remain available to disabled people.

According to Contact's Counting the Costs 2024 report, families with disabled children face enormous pressures: 44% have a parent with a disability or health condition, 62% had to give up paid work or reduce hours losing an average £21,174 annually, and 23% have no household employment. These families can't afford to lose benefits through poor planning.

Disabled Person's Trust vs Discretionary Trust: Which One Do You Need?

Two types of trusts protect disabled beneficiaries while preserving benefits: disabled person's trusts and discretionary trusts. Understanding which one suits your situation is critical.

Disabled Person's Trust (DPT)

A disabled person's trust has a named disabled principal beneficiary for whom the trust fund is used during their lifetime. The beneficiary must receive—or be eligible for—specific disability benefits: DLA care component at middle or higher rate, DLA mobility component at higher rate, PIP equivalents, or Attendance Allowance.

The key advantage is exceptional tax treatment. Disabled person's trusts are exempt from the 10-year periodic inheritance tax charges that affect discretionary trusts. Income can be taxed at the beneficiary's rate (usually 0% or 20%) rather than the trust rate of 45%. Capital gains tax relief is available through vulnerable person elections.

The limitation: For trusts created after 8 April 2013, trustees can only spend up to £3,000 or 3% of the trust value annually on other beneficiaries during the principal beneficiary's lifetime.

Disabled person's trusts work best for larger estates (over £325,000) where tax efficiency matters, and where the trust is genuinely primarily for the disabled person.

Discretionary Trust

A discretionary trust gives trustees complete flexibility over distributions to beneficiaries. There are no eligibility requirements—anyone can be a beneficiary.

The key advantage is maximum flexibility. Trustees can support the disabled person plus siblings, grandchildren, or other family members without restriction. This matters when you want to balance provision across your family.

The tax disadvantage: Discretionary trusts face periodic IHT charges every 10 years (up to 6% of value over the nil-rate band) and exit charges when capital is distributed. Trust income is taxed at 45% rather than the beneficiary's personal rate.

Discretionary trusts work best for smaller estates (under £325,000) where tax differences are minimal, or where flexibility to support multiple family members is essential.

Comparison Table

Feature	Disabled Person's Trust	Discretionary Trust
Eligibility	Beneficiary must receive qualifying disability benefits	No eligibility requirements
Tax Treatment	No 10-year IHT charges; income taxed at beneficiary's rate	10-year IHT charges; income taxed at 45%
Flexibility	Limited—max £3,000 or 3% annually for others	Complete—trustees have full discretion
Best For	Larger estates (over £325,000) with clear primary beneficiary	Smaller estates or situations requiring flexibility

Both trusts protect means-tested benefits. Assets in trust don't count as the beneficiary's capital. Both require careful trustee management and professional legal drafting.

James inherited £300,000 from his parents' estate. His solicitor established a disabled person's trust because James receives DLA care component at the higher rate. The trust generates £9,000 annual income, taxed at James's 0% rate (he has no other income) instead of the 45% trust rate. Over 20 years, this saves £81,000 in tax—money that enhances James's quality of life.

How Trusts Protect Benefits: The Legal Mechanics

Trusts work by creating legal separation between your loved one and the money. The beneficiary doesn't "own" trust assets, so they're not counted in means testing.

Trustees control when and how money is used. This discretion is what protects benefits. Because the beneficiary has no absolute entitlement to any specific amount, the DWP cannot treat trust assets as their capital.

Here's the critical rule: Trustees should pay FOR things rather than pay money TO the beneficiary's bank account.

Consider these examples:

✅ Trustees pay £3,000 directly for a specialist holiday = benefits unaffected

✅ Trustees purchase mobility equipment costing £2,500 = benefits unaffected

✅ Trustees pay £5,000 annually for private therapies not covered by the NHS = benefits unaffected

❌ Trustees give beneficiary £3,000 cash = could affect benefits assessment

❌ Trustees transfer £500 monthly to beneficiary's bank account = will affect benefits assessment

The DWP's perspective: Trust capital doesn't count toward the £16,000 limit, but any payments made directly to the beneficiary ARE assessed as income or capital.

Sarah's son receives £16,800 annually in means-tested benefits. His trust pays £4,000 yearly for music therapy, specialist holidays, and a gym membership—things that improve his quality of life but aren't covered by his benefits. Because trustees pay providers directly, his benefits continue unaffected. The trust enhances his life; benefits cover essentials.

Important warning: Trusts set up by the disabled person themselves (after inheriting money) may not protect benefits. This is called "deprivation of capital" and the DWP can treat the money as still belonging to them. Protection only works when the trust is established by someone else (typically parents) before the disabled person receives the money directly.

Choosing Trustees: Who Will Protect Your Loved One?

Trustees hold legal ownership of trust assets and have fiduciary duty to beneficiaries. They make discretionary decisions about what to pay for, manage investments, handle tax returns, and coordinate with care providers. This is a serious, long-term responsibility.

You need at least two trustees, but three or four provides better continuity as trustees age or become unavailable.

Who to Consider

Family members who understand your loved one's needs work well. Siblings, aunts, uncles, or cousins who share your care values and know the beneficiary personally bring invaluable insight. They understand what brings joy, what causes distress, and what support truly helps.

Professional trustees (solicitors, accountants, trust companies) bring expertise in trust law, tax compliance, and investment management. They're essential for complex estates or situations with family conflict. Professional trustees charge fees (typically 0.5-1.5% of trust value annually), but provide peace of mind.

A mix of family and professional trustees often works best. Family members provide personal knowledge; professionals provide technical expertise and continuity.

Consider age carefully. If you appoint trustees in their 60s when your disabled child is 20, those trustees will be in their 80s when your child is 40. Name younger replacement trustees in your will to ensure smooth succession.

Who NOT to Appoint

Don't appoint anyone with financial difficulties—if they're declared bankrupt, they're automatically disqualified as trustee.

Don't appoint people with conflicts of interest. If someone is also a potential beneficiary of the trust, tensions can arise between their interest and the disabled person's needs.

Don't appoint people who fundamentally disagree about care philosophy. If one trustee believes in maximum independence while another prioritizes safety above all else, conflicts will paralyze decision-making.

Never appoint only one trustee. Without checks and balances, power is concentrated in one person. If that trustee dies or becomes incapacitated, the trust fails until the court appoints a replacement—a costly, lengthy process.

Trustee Duties They'll Need to Handle

Your trustees will:

Prepare annual accounts and file tax returns
Make investment decisions (usually with professional financial advice)
Decide what to pay for based on beneficiary's needs and your Letter of Wishes
Coordinate with care providers, benefits advisors, and medical professionals
Maintain proper records of all decisions and expenditures
Follow trust law and fiduciary duties

Emma appointed her two older children (ages 32 and 29) plus her sister as trustees for her disabled son's trust. When her son is 40, his siblings will be 62 and 59—still young enough to serve actively. Emma named her nephew (currently 25) as replacement trustee to provide long-term continuity.

Writing a Letter of Wishes: Your Voice Beyond the Grave

Your will and trust deed set legal rules. Your Letter of Wishes guides trustees on how to follow your values within those rules.

A Letter of Wishes is a non-legally-binding document that gives trustees guidance on what you want for your loved one. Because it's non-binding, it provides flexibility as circumstances change. Because it's private (unlike your will, which becomes public after probate), it can include sensitive personal information.

You can update your Letter of Wishes anytime without changing the trust deed or will—no solicitor required, no formalities.

What to Include

1. Care Philosophy

Explain your values about independence versus protection, acceptable risk-taking, and quality of life priorities. Do you want trustees to encourage independence even if it involves some risk? Or does safety come first?

Example: "Tom thrives when he has structure but also needs flexibility for spontaneity. We've always balanced routine with new experiences. Don't let excessive caution prevent him from trying new activities, but ensure proper support is available."

2. Spending Priorities

Detail what matters most: holidays, therapies, social activities, equipment, housing adaptations, education. Help trustees understand where money does the most good.

Example: "Annual seaside holidays have been highlights of Rachel's life since childhood. Music therapy has significantly improved her communication. These should be priorities over expensive equipment that might seem helpful but she won't use."

3. Benefits Protection Instruction

Give clear direction to preserve benefits by spending trust funds on "extras" not essentials covered by the state.

Example: "It's critical that the trust enhances James's life without replacing state benefits. All spending should be for things not covered by his benefits—holidays, hobbies, therapies, entertainment. Never give James cash directly or transfer money to his bank account, as this will affect his benefits."

4. Relationship Maintenance

Identify who brings your loved one joy. Support for friendships, family connections, and community involvement matters enormously.

Example: "Emma's relationship with her cousin Sarah is precious to her. Trust funds should support regular visits, joint activities, and maintaining this connection as both women age."

5. What Happens After Beneficiary Dies

Explain where remaining trust funds should go. Typically this is siblings, other family members, or disability charities meaningful to your loved one.

Example: "After Tom passes, remaining trust funds should be divided equally between his siblings. If Tom developed a special connection with any particular care organization or disability charity during his lifetime, trustees may allocate up to 10% of remaining funds to that organization."

6. Practical Information

Share what only you know: communication style, fears and joys, medical history summary, who knows them best in their support network.

Example: "Marcus becomes anxious in crowded spaces but loves small-group activities. He communicates through gestures more than words. His key worker at the day centre, Michelle, understands him better than anyone outside family."

How Trustees Should Use It

Trustees should "follow unless compelling reasons not to"—your guidance carries moral weight without legal obligation. This flexibility matters when circumstances change in ways you couldn't foresee.

Review your Letter of Wishes annually or after major life changes (new medical diagnosis, change in care setting, new friendships or interests emerging).

Keep the Letter of Wishes with your will and give copies to all trustees. When circumstances change, write a new one and distribute it—previous versions become outdated.

Guardianship for Disabled Children: Who Will Care for Them?

If your disabled dependent is a child, you need to plan for their physical care as well as financial provision. The two issues overlap but require different legal mechanisms.

For Children Under 18

Guardianship appointment in your will works the same as for any child. If both parents die, your named guardians gain parental responsibility until the child turns 18.

Special considerations for disabled children:

Your guardian must understand medical and care needs. A learning curve is acceptable, but basic competence is essential. If your child has complex medical needs, can your proposed guardian handle them?

You may need younger guardians than you'd choose for a non-disabled child. Caring for a disabled child can be physically demanding. Consider whether your proposed guardian will have the energy and stamina required when they're 10 or 15 years older.

Your guardian should share your care philosophy. If you believe in inclusive education and your sister believes special schools are always better, that fundamental disagreement will cause conflict.

Should guardian and trustee be the same people or different? Arguments exist both ways. Same people: Guardian understands child's needs and can make cohesive decisions. Different people: Separation of powers prevents one person controlling both care and money, providing checks and balances.

Guardians have parental responsibility until the child turns 18. After that, everything changes.

When Your Child Turns 18: The Critical Transition

At 18, your child becomes a legal adult under UK law—even if they lack capacity to make decisions independently.

This transition catches families off guard. Guardianship automatically ends on the 18th birthday. You no longer have automatic parental authority. If your child needs ongoing decision-making support, you must arrange alternative legal mechanisms before they turn 18.

Important: Guardianship law differs between England/Wales and Scotland. This article covers England and Wales; Scottish readers should consult a Scottish solicitor.

Options for Adults Who Lack Capacity

Lasting Power of Attorney (LPA): If your child still has capacity at age 16 or 17, you can arrange an LPA while they're legally able to consent. Under the Mental Capacity Act 2005, only people aged 18 and over can make an LPA, but capacity should be assessed before the 18th birthday while planning is still possible.

An LPA for Health and Welfare allows you to make care decisions after they turn 18. An LPA for Property and Financial Affairs covers financial decisions.

Court of Protection Deputyship: If no LPA exists because your child lacks capacity to create one, you must apply to the Court of Protection for deputyship. The application fee is £421 (increased from £408 as of April 2025), and the process typically takes several months. During that time, you have no legal authority.

Additional costs include a £100 assessment fee for new deputies and annual supervision fees (£35 for minimal supervision when managing less than £21,000).

Appointeeship: For benefits only, appointeeship is simpler than deputyship. If your child only receives benefits with no other assets, you can become their DWP-appointed representative without court involvement.

Marcus's son Tom has severe learning disabilities. At age 17, Marcus worked with a solicitor to arrange a Lasting Power of Attorney (Health and Welfare) with Tom signing while he still had sufficient capacity under Mental Capacity Act 2005 principles. When Tom turned 18, Marcus already had legal authority to continue making care decisions. Without this, Marcus would have needed to apply for deputyship—a lengthy, expensive process with a period of no legal authority.

Start planning before your child's 16th birthday. Assess capacity while planning is still possible. Consult a solicitor specializing in capacity law to navigate this complex transition.

Funding the Trust: Life Insurance, Gifts, and Estate Planning

A trust is only useful if it has assets. How do you ensure your trust is adequately funded?

Life Insurance as Trust Funding

Life insurance creates instant capital when you die, ensuring the trust is funded even if you die young before accumulating substantial wealth.

Structure the policy to pay out directly to the trust, not to the beneficiary. Never name your disabled dependent as the direct beneficiary on a life insurance policy—their benefits will be lost.

Calculate the amount based on life expectancy and the enhanced quality of life costs you want to cover. A £200,000 policy could provide £8,000 annually over 25 years for holidays, equipment, therapies, and other enhancements.

David has a £250,000 life insurance policy that pays directly into his daughter's disabled person's trust. His daughter receives £15,600 annually in benefits covering care and essentials. The trust will provide approximately £10,000 yearly for therapies, holidays, hobbies, and quality of life improvements—things benefits don't cover. Her benefits continue; the trust enhances her life.

Learn more about using life insurance to fund family protection in our comprehensive guide.

Will Provisions

Your will can direct all or part of your residuary estate into the trust. You can exclude the disabled person from direct inheritance entirely, with all provision made via the trust.

Consider how to balance provision between your disabled child and non-disabled siblings. Some families provide equally to all children but structure the disabled child's share through a trust. Others provide more to the disabled child to reflect greater lifetime needs. There's no single right answer—it depends on your values and circumstances.

Lifetime Gifts into Trust

You can establish a trust during your lifetime if you have immediate wealth to transfer. This is useful because you can see the trust working and make adjustments.

For disabled person's trusts, lifetime gifts are treated as Potentially Exempt Transfers (PETs) for inheritance tax—no immediate tax charge if you survive seven years.

The downside: Less flexibility. You can't change your mind once assets are in the trust. Will trusts offer more flexibility because the trust only comes into effect on your death.

Pension Death Benefits

Pensions are less useful for disabled beneficiaries. Pension trustees typically can't pay into trusts created in your will—they have their own discretion about death benefit distributions.

Consider carefully whether pension benefits should go elsewhere (surviving spouse, non-disabled children) while your estate funds the disabled person's trust.

Realistic Funding Levels

Don't feel inadequate about smaller amounts. Even a £50,000 trust can significantly enhance quality of life—that's £2,000 annually over 25 years for extras that benefits don't cover.

Any trust is better than direct inheritance when benefits protection matters. A £30,000 inheritance paid directly eliminates £15,000+ in annual benefits. That same £30,000 in trust preserves benefits while providing £1,200 yearly for enhancements.

Tax Implications: IHT, Income Tax, and CGT on Special Needs Trusts

Tax treatment differs significantly between disabled person's trusts and discretionary trusts. Understanding these differences helps you choose the right structure.

This is a summary only. Tax legislation changes frequently and your personal circumstances matter. Seek advice from a tax specialist or solicitor before establishing any trust.

Disabled Person's Trust Tax Advantages

Inheritance Tax: Disabled person's trusts are exempt from the 10-year periodic charges that affect discretionary trusts. No exit charges apply when capital is distributed. However, the trust value aggregates with the beneficiary's estate on their death.

Income Tax: Trustees can make a Vulnerable Person Election allowing income to be taxed at the beneficiary's rate (usually 0% or 20% if they have no other income) rather than the trust rate of 45%. This saves substantial tax annually.

Capital Gains Tax: Vulnerable person elections also allow gains to be taxed as if they belonged to the beneficiary personally, using their personal allowances and lower rates. The trust's annual exempt amount is £3,000.

Discretionary Trust Tax Position

Inheritance Tax: 10-year periodic charges apply (up to 6% of trust value over the nil-rate band). Exit charges apply when capital is distributed. Entry charges apply if settled during lifetime above the nil-rate band.

Income Tax: The trust pays 45% on income above £500 (first £500 taxed at 20%). Dividend income above £500 is taxed at 45%.

Capital Gains Tax: Annual exempt amount of £3,000 (same as DPT). Gains taxed at 18% or 28% (residential property) or 10% or 24% (from April 2025) on other assets.

Practical Comparison

A £300,000 trust generating £9,000 annual income:

Disabled Person's Trust: Income taxed at beneficiary's 0% rate (if they have no other income) = £0 tax

Discretionary Trust: Trust pays 45% on £8,500 (after £500 basic rate) = £3,825 tax

Over 20 years, the DPT saves £76,500 in tax compared to the discretionary trust.

For estates under £325,000, tax differences may be minimal and a discretionary trust's flexibility might be more valuable. For larger estates, a disabled person's trust's tax advantages are substantial.

Always get professional tax advice. The rules are complex, change regularly, and depend on your specific circumstances.

Do You Need a Solicitor? (And What WUHLD Can Help With)

Be realistic about what requires professional legal help and what doesn't.

What Requires a Solicitor (WUHLD Cannot Help)

Establishing disabled person's trusts or discretionary trusts in your will requires a solicitor. These are highly technical legal instruments where errors can have catastrophic consequences for benefits eligibility.

Solicitors also handle:

Drafting trust deeds and trust provisions
Navigating complex benefit rules and trust taxation
Lifetime trusts (established while you're alive)
Court of Protection applications

Why specialist advice is essential: One error in trust drafting can cost your loved one thousands in annual benefits. The rules are complex, fact-specific, and change regularly. This isn't a suitable area for DIY will-writing.

Do not attempt to create disabled person's trusts using online templates or DIY will kits. Errors in trust drafting can be irreversible and may result in loss of benefits.

Solicitor Costs for Special Needs Wills

Typical fees range from £800 to £2,000 or more for wills with trust provisions. Costs vary by complexity, location, and solicitor experience.

This is more expensive than standard wills, but reflects specialist expertise that protects your loved one's future. Many disability charities offer free will schemes or reduced fees:

Mencap's wills and trusts service
Scope's legal advice service
Law Society Find a Solicitor (filter by specialism: wills, trusts, disabled beneficiaries)

What WUHLD Can Help With

While we can't draft trusts, WUHLD's online will service can help with:

Guardianship appointments for disabled children—naming who will care for them physically if both parents die. Learn more about choosing guardians in our detailed guide.

Provisions for non-disabled children and spouse in straightforward terms without complex trust arrangements.

Funeral wishes and personal requests to ease your family's burden during difficult times.

Executor appointments coordinating with your trust solicitor to ensure smooth estate administration.

Regular will reviews as your circumstances change. Find out when to update your will to keep it current.

Our Honest Approach

Special needs trusts are too important to compromise on. We don't offer them because we'd rather you get specialist advice than use a cheaper service that gets it wrong.

We're here for your other estate planning needs—and to be a trusted source of information even when we can't provide the service ourselves.

Our recommendation: Consult a solicitor to draft trust provisions, then use WUHLD for straightforward provisions for the rest of your family. This balances specialist expertise where it's essential with affordable solutions where they're appropriate.

Securing Your Disabled Dependent's Future

Planning for a disabled dependent's future after you're gone is one of the hardest things you'll do as a parent or carer. The fear never fully disappears.

But with proper legal structures—a carefully drafted trust, thoughtful trustees, and comprehensive instructions—you can create a safety net that protects both their financial security and their vital benefits.

You can't be there forever, but your planning can be.

Key takeaways:

Understand the danger: Direct inheritance—even small amounts—can eliminate means-tested benefits worth thousands annually. Your well-intentioned will could accidentally harm your disabled dependent.
Choose the right trust type: Disabled person's trusts offer tax efficiency for larger estates with clear primary beneficiaries. Discretionary trusts provide flexibility for smaller estates or situations requiring support for multiple family members.
Appoint careful trustees: Choose 3-4 people who understand your loved one's needs, share your values, and are young enough to serve for decades. Name replacement trustees to ensure continuity.
Write a Letter of Wishes: Give trustees detailed guidance on care philosophy, spending priorities, benefits protection, and what happens after your loved one passes. Update it annually.
Get specialist legal advice: Don't DIY special needs trusts—the stakes are too high and errors can be irreversible. Expect to invest £800-£2,000 in proper solicitor advice that protects your loved one's future.

While WUHLD's £49.99 online will service can't help with complex special needs trusts, we can assist with guardianship appointments, provisions for other family members, and executor arrangements.

Create your will online in 15 minutes with a free preview before you pay—no credit card required.

You'll receive:

Your professionally drafted will
A 12-page Testator Guide
A Witness Guide
A Complete Asset Inventory document

For trust provisions, consult a specialist solicitor. Then use WUHLD for your broader estate planning needs.

Frequently Asked Questions

Q: Can I leave money directly to my disabled child in my will?

A: Technically yes, but this will likely affect their means-tested benefits. If your child receives Universal Credit, Employment Support Allowance, or Housing Benefit, an inheritance above £16,000 will eliminate those benefits entirely. Even amounts between £6,000 and £16,000 will reduce benefits. A trust protects benefits while ensuring your child benefits from your estate.

Q: What benefits does a disabled person's trust protect?

A: Disabled person's trusts protect means-tested benefits including Universal Credit, income-based Employment Support Allowance, income-based Jobseeker's Allowance, Income Support, and Housing Benefit. Non-means-tested benefits like Personal Independence Payment (PIP) and Disability Living Allowance (DLA) aren't affected by inheritance anyway. The trust ensures means-tested benefits worth thousands annually aren't lost.

Q: How much does it cost to set up a disabled person's trust?

A: Solicitor fees typically range from £800 to £2,000 for wills with trust provisions, depending on complexity and location. While more expensive than standard wills, this reflects specialist expertise essential for protecting benefits. Many disability charities including Mencap and Scope offer free will schemes or reduced fees—check their websites for current offers.

Q: Can I set up a special needs trust myself?

A: No. Disabled person's trusts and discretionary trusts are complex legal instruments where errors have irreversible consequences for benefit eligibility. Online templates and DIY will kits are not suitable. You must use a solicitor specializing in trusts for disabled beneficiaries. The risk of getting it wrong far outweighs the cost of professional advice.

Q: What is a Letter of Wishes for a disabled person's trust?

A: A Letter of Wishes is a non-legally-binding document that guides trustees on your care philosophy and spending priorities. It explains what matters to your loved one, what brings them joy, and how you want trustees to use trust funds. Because it's non-binding, you can update it anytime without changing the formal trust deed or will. It remains private, unlike your will which becomes public.

Q: Do disabled person's trusts pay inheritance tax?

A: Disabled person's trusts don't face the 10-year periodic charges that affect discretionary trusts, making them significantly more tax-efficient for larger estates. However, when the disabled beneficiary dies, the trust value aggregates with their estate for inheritance tax purposes. Lifetime gifts into disabled person's trusts are treated as Potentially Exempt Transfers with no immediate tax charge.

Q: Who controls a disabled person's trust?

A: Trustees have legal control and discretionary decision-making power, not the beneficiary. This is what protects means-tested benefits—because the beneficiary doesn't "own" or control the assets, they're not counted in benefits assessments. Trustees decide what to pay for based on the beneficiary's needs and the settlor's Letter of Wishes.

Q: What happens to a disabled person's trust when the beneficiary dies?

A: Remaining trust assets are distributed according to the trust terms established in your will. Typically funds go to siblings, other family members, or disability charities meaningful to your loved one. You specify these arrangements when the trust is created, and can provide guidance in your Letter of Wishes about any flexibility you want trustees to have.

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Legal Disclaimer: This article provides general information about UK estate planning for families with disabled dependents and does not constitute legal advice. For advice specific to your individual situation, please consult a qualified solicitor specializing in disabled person's trusts and a benefits advisor. WUHLD's online will service is suitable for straightforward UK estates but not for complex special needs trusts; these require professional legal advice.

Benefit rules and capital limits change frequently. Check current eligibility criteria on GOV.UK or with Citizens Advice before making decisions.

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