Supporting Vulnerable Clients

Trust for a Vulnerable Person

A trust can be a useful tool and vehicle to provide for your loved ones. Whilst the Finance Act 2005 did produce a new tax regime for trusts, provision was made for a special tax treatment in relation to trusts for vulnerable persons.

We are experienced in creating and administering such trusts for families who have vulnerable beneficiaries to consider. This includes advising on setting up the trust, obtaining the vulnerable person election from H M Revenue and Customs (so that the amount of tax charged on any income and gains within the trust is not more than what it would have been if those income and gains were paid directly to the vulnerable person), also advising on the letters of wishes which prove crucial in providing your trustees with guidance when they need to act.

A trust for a vulnerable beneficiary can be set up during your lifetime to take receipt of gifts and inheritance from you or other family members.  This ensures that the trust fund can be used for the vulnerable person as and when needed and could provide for things such as privately paid therapies, equipment, educational needs and anything else over and above what is provided through state assistance. Other examples for use of the trust fund are for annual holidays, trips and which could also cover the cost of the vulnerable person’s carer or companion. By paying for these costs to the provider directly, it means these payments are dealt with trustees rather than through the beneficiary or their attorneys/deputies who are appointed through the Court of Protection to manage the vulnerable person’s financial affairs.

Your letter of wishes can also set out matters such as who you would like replacement trustees to be in the future, who the beneficiaries would be upon the death of the vulnerable person and any other detail that you feel may be useful to your trustees so that they can properly assist in the future.

Court of Protection

The Court of Protection has jurisdiction over the property and financial affairs over people who lack the mental capacity to deal with their affairs, also their health and welfare. The Court will appoint deputies to make decisions for people who lack mental capacity, if there are no Powers of Attorney in place or if the Power of Attorney is defective or needs to be cancelled. The Court will also deal with urgent personal welfare decisions on behalf of someone who lacks mental capacity, they will make decisions about the registration of Powers of Attorney or indeed whether an attorney needs to be removed, whether a Will should be put in place and can make orders to authorise gifts are made on behalf of the person who lacks mental capacity.

The team have considerable experience in dealing with applications to the Court of Protection to appoint deputies, the removal of deputies/attorneys, seeking orders for the execution of a statutory Will or gifting for inheritance tax, estate planning or even maintenance purposes, obtaining orders for sale over property/land which is held jointly with the mentally incapable person and dealing with care issues such as depravation of liberty safeguards and if necessary, the challenging of these. Jessica Beddows has significant experience in this area and has dealt with many cases through the Court of Protection which have required mediation or Court hearings where a settlement cannot be reached.

Care Fee Planning

We are experienced in providing advice regarding the options for care fee planning during your lifetime and when the time comes, assisting with the options for care whether at home or in a residential/nursing home. Jessica Beddows has experience of dealing with the local authority financial assessments, advising on obtaining any addition assistance and we work with trusted professional advisors who can assist with the same, if you do not already have these in place.

During your lifetime, we can advise you on structures that should offer some protection in later life and other matters which you may wish to consider or put in place.