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Discretionary Trust & Disabled Trust

JonnycJonny

Do these types of trust impact UC and other means tested benefits ? That is, impact on the savings / capital regulations. Cannot find a concrete answer on web.

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Comments

calcotti

Whether or not they count or are disregarded will depend on the exact wording of the trusts. They should be declared and a DWP Decision Maker will have to determine whether or not a disregard applies.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1145107/admh1.pdf#page19

JonnycJonny

Thank you for sign posting me to that document.

2oldcodgers

JonnycJonny said:

Do these types of trust impact UC and other means tested benefits ?

First of all where are the funds coming from?
UC is a means tested benefit which affects the claim if it is deemed to it being used to reduce your capital so as to increase your benefit payments.
Without knowing anything about your circumstances it is difficult to advise.
I set up a discretionary trust using an inheritance that I did not want and felt it better for it to be made available to the children, grandchildren etc.
Effectively that type of trust cannot make any payments to me as I was the donor.

poppy123456

2oldcodgers said:

JonnycJonny said:

Do these types of trust impact UC and other means tested benefits ?

I set up a discretionary trust using an inheritance that I did not want and felt it better for it to be made available to the children, grandchildren etc.
Effectively that type of trust cannot make any payments to me as I was the donor.

If the inheritance was meant for you then setting up a trust fund with the money could be seen as deprivation of capital, if the money took your savings above the maximum amount. (£16,000 for working age people)
You can’t just give your money away and still be expected to claim means tested benefits.

calcotti

I agree that setting up a trust for others using money you inherited is deprivation of capital if you are seeking benefits for yourself.

If you are asking are possible benefits for the beneficiaries of the trust then the funds may fall to be disregarded then considering their capital.

JonnycJonny

So if I were the beneficiary of a trust ( set up following an inheritance ) and money was used for goods / services in support of my disability the trust fund itself would be disregarded when it comes to means tested benefits ?

calcotti

JonnycJonny said:

So if I were the beneficiary of a trust ( set up following an inheritance ) and money was used for goods / services in support of my disability the trust fund itself would be disregarded when it comes to means tested benefits ?

As advised, it depends on the exact terms of the trust.

calcotti said:

Whether or not they count or are disregarded will depend on the exact wording of the trusts. They should be declared and a DWP Decision Maker will have to determine whether or not a disregard applies.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1145107/admh1.pdf#page19

2oldcodgers

poppy123456 said:

2oldcodgers said:

JonnycJonny said:

Do these types of trust impact UC and other means tested benefits ?

I set up a discretionary trust using an inheritance that I did not want and felt it better for it to be made available to the children, grandchildren etc.
Effectively that type of trust cannot make any payments to me as I was the donor.

If the inheritance was meant for you then setting up a trust fund with the money could be seen as deprivation of capital, if the money took your savings above the maximum amount. (£16,000 for working age people)
You can’t just give your money away and still be expected to claim means tested benefits.

At the time I was not claiming any means tested benefits. Deprivation can only be looked at if a means tested benefit is in payment

poppy123456

2oldcodgers said:

poppy123456 said:

2oldcodgers said:

JonnycJonny said:

Do these types of trust impact UC and other means tested benefits ?

I set up a discretionary trust using an inheritance that I did not want and felt it better for it to be made available to the children, grandchildren etc.
Effectively that type of trust cannot make any payments to me as I was the donor.

If the inheritance was meant for you then setting up a trust fund with the money could be seen as deprivation of capital, if the money took your savings above the maximum amount. (£16,000 for working age people)
You can’t just give your money away and still be expected to claim means tested benefits.
At the time I was not claiming any means tested benefits. Deprivation can only be looked at if a means tested benefit is in payment

Then why did you comment on the thread with your story when it's completely different circumstances to what the question is for. That's misleading information.

calcotti

2oldcodgers said:

poppy123456 said:

2oldcodgers said:

JonnycJonny said:

Do these types of trust impact UC and other means tested benefits ?

I set up a discretionary trust using an inheritance that I did not want and felt it better for it to be made available to the children, grandchildren etc.
Effectively that type of trust cannot make any payments to me as I was the donor.

If the inheritance was meant for you then setting up a trust fund with the money could be seen as deprivation of capital, if the money took your savings above the maximum amount. (£16,000 for working age people)
You can’t just give your money away and still be expected to claim means tested benefits.
At the time I was not claiming any means tested benefits. Deprivation can only be looked at if a means tested benefit is in payment

it is incorrect. When claiming a means tested benefit deprivation of capital could be considered to have place if capital was given away prior to claiming in order to try and become eligible for benefits.

JonnycJonny

Thank you Calcotti for your input - the link was very useful. Not sure why another Member began writing on this discussion. It turns out Scope has a short page on all this. It says:

'You can put money and property into a trust for a disabled person. Trustees manage the trust. This could be:

before you die

after you die, through your will.

This type of trust is good for managing:

Support with money

Risk of financial abuse
Means testing for benefits

For now it is all hypothetical - but when it comes to probate, forewarned is forearmed.