Disability trust charges

Terri6
Terri6 Online Community Member Posts: 1 Listener
edited February 10 in Benefits and income

I am setting up a disability trust and looking to purchase a house with my brother as his closest relative we have lived together. The executors of the trust are questioning conflict of interest and putting us off saying we need more funds available to pay tax and solicitors fees. How much power do they have, can we change to another solicitor to advise us as they have been difficult in the past? As we would have tax relief with the trust, how much would a solicitors ongoing maintenance of the trust be?

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  • MW123
    MW123 Scope Member Posts: 913 Championing

    @Terri6

    In essence, the executors are focused on ensuring that the trust is managed fairly, transparently, and exclusively for your benefit, as required by their fiduciary duty. They need to be certain that the house purchase is genuinely in your best interests, with any benefit to your brother being incidental. The executors of your disability trust are concerned about a potential conflict of interest because purchasing a house where your brother also lives could be seen as benefiting him, not just you. They have a duty to ensure trust funds are used solely for your needs and that your decisions aren't unduly influenced. Even if everything is legitimate, the appearance of a conflict can still be problematic.

    To address these concerns, consult a solicitor specialising in disability trusts who is independent of the current situation. Review the trust deed to ensure it allows for property purchases and addresses potential conflicts of interest. Finally, let your new solicitor handle all communication with the executors to protect your interests and ensure their concerns are addressed professionally.

    Disability trusts in the UK can qualify for favourable tax treatment, including relief from income tax and capital gains tax, depending on how they are set up. These trusts can also protect the disabled person's means-tested benefits, provided they meet the conditions of a qualifying disability trust. A specialist solicitor can advise on this. The cost of a solicitor’s ongoing management of the trust will vary depending on its size.

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