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Inheritance being lost

jaclyn Community member Posts: 1 Listener


My name is Jaclyn, Jac to my friends (my mother only calls me Jaclyn when I am in trouble!). My younger brother Stevie is profoundly mentally handicapped and has a mental age of about 18 months. Both of us had brain haemorrhages when we were 6 weeks old, and although I have been left with severe tunnel vision, I was the lucky one. Stevie loves trying food, listening to music, having a glass of Tia Maria and spending time with his family; the only word he has ever said consistently is Gaga, that’s what he calls me. He is my world.

About 15 years ago, when I was beginning my career, I decided that I wanted to work in law. I went to a seminar on Wills and Trusts, to see if I would like to specialise in this field. This seminar taught me more than I ever thought it would and I was shocked when I heard that if my mother left anything to Stevie in her will, and he was in receipt of benefits, then all he would be left is his personal allowance. This is because often inheritance is mean tested, which can lead to benefits being lost. My mum was so upset, she wanted his inheritance to allow him to have some luxuries in life, so that he could enjoy himself and keep living comfortably.

I learnt more and more about Discretionary Will Trusts. These can offer an answer, as they are not means tested and can help a loved one who is perhaps unable to manage their own money. I trained and specialised in this field so that I could try to help others in a similar situation to our family.

Please get in touch with me if you have any questions about Discretionary Will Trusts or would like some guidance. You can message me on here or give me an email on


  • Vic
    Vic Community member Posts: 9 Listener
    What do other people think about this?
  • AlexW_Scope
    AlexW_Scope Scope Posts: 224 Pioneering
    You can read Scope's information about Will Trusts at

    or call our team on 020 7619 7289. 
  • wideyes
    wideyes Community member Posts: 18 Connected
    edited May 2018
    Your advice Alex is very limited . I am 61 and my parents set uo
    a discretionary trust in 2008 but were poorly advised . Solicitors made me a primary beneficiary and a trustee !

    There is one other trustee and my brother is a beneficiary 

    The trust recently took advice from 2 sets of Trust leading solicitors [name removed]

    To set me aside now as a trustee would be viewed as Fettering 

    i have not received any funds from the trust but housing benefit administered by  Westminster council can use their own Discretion to look at the trust and decide whether it is a genuine trust or not and they could view the trust with me as a trustee as contentious !

    my parents were not advised to leave a separate note in how they wished the trust funds to be used . However the trustee of my trust  knew my parents very well and he can vouch in a court of law if we need to challenge the council .

    These trusts are nothing more than pieces of paper wherebye solicitors think they can make a quick buck in setting them up .

    i have spoken to many chartered accountants who strongly advise not to set up these trusts with less than £200.000 

    reason being the cost involved running a trust is  very expensive .

    we made enquiries with a trust company to handle my trust . They charge £200 just to handle paperwork to pay out £200 for anything required for the primary beneficiary .

    Unless you have family or probono accountants to help run the trust , you are caught out everyway  re tax on investments .

    as a non tax payer if the primary beneficiary does not work , the trust is charged by HMRC 40 % tax !!

    so you then start looking at making an election for the trust to be registered as a disabled trust which is exempt of high tax on investments returns .

    however if the trust invests money which yields a return of say eg 4% which is not a lot or invests long term in a bond over 20 years , one is permitted to draw annually 4 % and so the trust rolls up annually 4 % 

    If the disabled trust does not pay out funds to the disabled person your means tested benefits should not be affected 

    However trust solicitors advise to pay for medical bills etc items like a washing machine direct to the company or medic who bill the Disabled person 

    as long as the trust does not pay any funds to the primary beneficiary means tested benefits should not be affected 

    however you state on your site that if the trust funds increase via investments it will affect that disabled persons benefits 

    a trust by law must be run in an efficient manner and to be seen as investing funds to benefit the trust and its beneficiaries .

    That is why a trust is set up . A trust is not set up to own funds but not invest them . Own property as well 

    so how can a disabled person on limited income benefit from these trusts being on means tested benefits ?

    It means that under no circumstances must a trust be Disabled as the deed behind the trust stipulates different laws about how much a disabled beneficiary should receive which is entitlement to all the trust funds in that persons lifetime!!

    so one has to then determine pros and cons

    Disabled trust : tax breaks positive on interest on Investments as little tax to pay if any 

    Cons : means tested benefits affected 

    Discretionary trust : 

    high tax to pay on interest from investments : costly trust to run : yet the DWP housing benefit being local council have the discretion to add assets in the trust as capital !!

    Either way these trusts are a toxic minefield for any family to consider . Instead one is far better to give money to a guardian friend to use wisely on any disabled person as and when . As soon as you place property or money into a trust you are caught .

     Trust money cannot be invested in ISA products 

    cannot be invested in
    easy ascess accounts 

    No Main stream high street bank will accept trust money for investing in ISA or savings accounts .

    The trust then requires accountants to handle tax returns: 

    Wealth advisor on how to invest trust funds 

    Suggesting setting up a trust for a disabled child adult or family is a minefield legally financially tax inefficient and a ****** headache !
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