# Having a Will is always Important but Why is it so Much More Important When a Child is Vulnerable or has a Disability? 
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-03-22
Category: LIFESTYLE
Category URL: https://financedigest.com/category/lifestyle
Meta Title: Why Making a Will is Crucial for Parents of Vulnerable
Meta Description: Learn how to safeguard your child's inheritance with trusts and avoid issues like loss of benefits or financial mismanagement in this informative article.
URL: https://financedigest.com/having-a-will-is-always-important-but-why-is-it-so-much-more-important-when-a-child-is-vulnerable-or-has-a-disabilityhtml

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_By_ [**_Christine Thornley_**](https://www.irwinmitchell.com/our-people/christine-thornley) **_,_** _Head of_ [_Tax, Trusts and Estates_](https://www.irwinmitchell.com/personal/wills-trusts-estates) _at Irwin Mitchell_

Making a Will often gets put on the ‘to do’ list and, although people know they should prioritise them, they are often only thought about once something has happened to a friend or family member.

Not making a Will often causes problems for families as, without a Will, the intestacy provisions apply and these don’t always ensure that assets are left to the correct people or in the correct way.

For [parents of vulnerable or Special Educational Needs](https://www.financedigest.com/new-research-reveals-many-brits-turning-parents-financial-help-buying-many-need-helping-hand.html "New research reveals how many Brits are turning to their parents for financial help, what they are buying and why so many need a helping hand") (SEN) children, making a Will is even more important. Some of these [children won’t be able to manage money](https://www.financedigest.com/necessary-lessons-in-debt-six-out-of-ten-brits-wouldnt-feel-comfortable-discussing-any-money-issues-with-their-children.html "Necessary lessons in debt? Six out of ten Brits wouldn’t feel comfortable discussing any money issues with their children") themselves and there may be a danger of them being taken advantage of for their inheritance. Often parents have fought for years to get their child the right [benefits and support structure and, inheriting money outright, can cause all of that to be taken away and any means tested benefits to be stopped](https://www.financedigest.com/defined-benefit-pension-schemes-should-they-stop-you-buying-a-business.html "Defined benefit pension schemes: should they stop you buying a business?").  People often think that [children only need protecting](https://www.financedigest.com/uk-opposition-calls-for-better-online-protections-for-children.html "UK opposition calls for better online protections for children") until they become adults but this is often not the case.

Making a Will is not only about who’ll benefit from an estate but also how. The use of trusts within Wills can [solve a lot of problems when there’s a vulnerable](https://www.financedigest.com/how-the-financial-services-industry-can-solve-the-issue-of-vulnerable-code.html "How the financial services industry can solve the issue of vulnerable code") child. Although this article refers to a ‘child’ the same principals and rules apply to any beneficiary and shouldn’t be forgotten by relatives who want to provide for a vulnerable child.

**Is it always wrong to leave a [vulnerable child money](https://www.financedigest.com/why-are-banks-still-so-vulnerable-to-money-laundering.html "Why are banks still so vulnerable to money laundering?") in a Will outright?**

Making a Will is about having the freedom to leave your [assets in the way](https://www.financedigest.com/4-ways-todays-investor-can-future-proof-their-assets.html "4 Ways Today’s Investor Can Future Proof their Assets") you want and accordingly, there is no ‘wrong’. Having said that, leaving a vulnerable child, assets outright can cause all sorts of issues and it might not be the sensible thing to do.

Examples of common problems we encounter are:

- The ‘child’ [lacking capacity and being unable](https://www.financedigest.com/financial-services-firms-unable-to-innovate-as-technologists-lack-boardroom-influence-warn-it-leaders-in-new-report.html "Financial services firms unable to innovate as technologists lack boardroom influence, warn IT leaders in new report") to acknowledge receipt for the money. This often results in an application being [made to the Court of Protection so that someone can acknowledge receipt and then manage that money](https://www.financedigest.com/money-laundering-made-easy-by-uk-financial-system.html "Money laundering made easy by UK financial system") for that child
- The child having the capacity to take the [money but then not being responsible enough](https://www.financedigest.com/nearly-40-of-millennials-dont-have-enough-money-to-invest-in-their-future.html "Nearly 40% Of Millennials Don’t Have Enough Money To Invest In Their Future") to know what to do with it. This can lead to the money being wasted and sadly, other [people ‘helping’ that child spend the money](https://www.financedigest.com/the-start-up-using-technology-to-help-the-20-million-people-in-britain-with-money-worries.html "The start-up using technology to help the 20 million people in Britain with money worries")
- Means tested benefits being stopped. This might not be such an issue if there are going to be sufficient funds to maintain that child for the rest of their life but, if the money [runs out after a year](https://www.financedigest.com/london-ranked-as-europes-most-attractive-city-for-businesses-and-employees-for-second-year-running.html "London ranked as Europe’s most attractive city for businesses and employees for second year running") or so, someone will have to go through the process of applying for all of the benefits again.

**How do I make sure my child is looked after without leaving them** [money they can control?](https://www.financedigest.com/who-really-controls-your-money.html "Who Really Controls Your Money?")

[Trusts are mentioned above and these are fantastic vehicles to ensure](https://www.financedigest.com/challenger-banks-ensuring-trust-in-your-email.html "Challenger banks: Ensuring trust in your email ") that money can be used for the benefit of a child but that they are also protected. To ensure children don’t just receive [assets outright at a certain age there are 2 types of trusts](https://www.financedigest.com/u-s-to-move-3-5-billion-in-afghan-central-bank-assets-to-swiss-based-trust.html "U.S. to move .5 billion in Afghan central bank assets to Swiss-based trust") often used:

- **Discretionary Trusts**

This type of trust is very flexible and is the most common type of trust when people want an extra layer of [protection to ensure children don’t just receive assets at a specified age](https://www.financedigest.com/how-can-we-protect-ourselves-in-the-age-of-pegasus.html "How can we protect ourselves in the age of Pegasus?").

A discretionary trust can be thought of like a bucket, it holds all or some of the estate assets. It relies on trustees and beneficiaries. The [trustees control the assets within the trust](https://www.financedigest.com/how-to-maintain-customer-loyalty-and-trust-in-the-face-of-a-pandemic-and-digital-competition.html "How to maintain customer loyalty and trust in the face of a pandemic and digital competition") (bucket) and can apply those assets for the benefit of any or all of the beneficiaries. Naming someone as a beneficiary doesn’t give them any right to benefit from the assets within the trust. The assets within the trust are not counted towards any mean tested benefits assessment. The trustees unanimously make a [decision at a particular time](https://www.financedigest.com/georgias-tbc-bank-slashes-loan-decision-time-with-fico-solution.html "Georgia’s TBC Bank Slashes Loan Decision Time with FICO Solution") about who (from the named beneficiaries) will benefit from the assets within the trust and when. If the assets aren’t paid out of the trust they can stay within the trust structure.

Our [clients often use this structure to protect](https://www.financedigest.com/pwc-grows-data-protection-practice-to-support-increasing-client-demand-for-gdpr-expertise.html "PwC grows data protection practice to support increasing client demand for GDPR expertise") children who aren’t very good with money, where there’s an unsatisfactory partner and very frequently where children are vulnerable.

This type of trust is an excellent mechanism to ensure those children can have [funds made available to them if they need](https://www.financedigest.com/fintechs-and-funding-who-needs-who.html "FinTechs and Funding: Who Needs Who?") them, but that they aren’t in control of those funds themselves and their benefits aren’t affected.

- **Disabled Persons Trust**

This type of trust also protects funds for the benefit of vulnerable children by [ensuring they don’t have control over the assets and that their means tested](https://www.financedigest.com/ensuring-traders-pass-the-test-of-mifid-ii-and-mar.html "Ensuring traders pass the test of MiFID II and MAR") benefits aren’t affected. However they can’t be used for all vulnerable children.

To use this type of trust the primary beneficiary of the trust has to be classed as disabled and what is classed as disabled for this purpose is defined in legislation. This in itself isn’t necessarily easy to understand but, put simply, it’s someone who’s incapable of managing their [property and financial affairs](https://www.financedigest.com/chinese-love-affair-with-manchester-property-to-strengthen-as-government-welcomes-new-investment.html "Chinese love affair with Manchester property to strengthen as government welcomes new investment"), and/or would (or does) qualify for attendance allowance, disability living allowance or PIP at certain rates.

If this type of trust is [set up the funds](https://www.financedigest.com/norways-wealth-fund-tells-firms-to-set-net-zero-emission-goals.html "Norway’s wealth fund tells firms to set net zero emission goals") within the trust have to be used for the benefit of the disabled person and cannot, during the disabled person’s lifetime be used for anyone else (subject to a minimum of £3,000 or 3% of the fund per year, whichever is lower).

This [type of trust isn’t as flexible as a discretionary trust and the funds couldn’t be used for the benefit of other children or family](https://www.financedigest.com/types-of-insurance-for-yourself-and-your-family.html "Types Of Insurance For Yourself And Your Family") members if the disabled person did not need them. People often ask why anyone would use this type of trust and give up the flexibility [offered](https://www.financedigest.com/opus-trust-marketing-publishes-a-report-to-offer-insightinto-the-changing-face-of-customer-communications.html "Opus Trust Marketing publishes a report to offer insight into the changing face of customer communications") with a discretionary trust, the answer is tax.

As soon as the disabled beneficiary has [passed](https://www.financedigest.com/trusted-web-platforms-you-can-use-to-pass-your-microsoft-70-761-exam-and-how-exam-dumps-will-help-you.html "Trusted Web Platforms You Can Use to Pass Your Microsoft 70-761 Exam and How Exam Dumps Will Help You") away other children or family members can benefit from the trust but the trust then also becomes subject to the same tax regime as a standard discretionary trust.

The difference in the trusts often causes families to weigh up whether or not tax or [flexibility is more important](https://www.financedigest.com/flexible-finance-the-importance-of-investment-in-changing-times.html "Flexible Finance: the importance of investment in changing times") to them. There’s of course no right answer and what is right for one family might not be right for another.

The one [thing that is right for every](https://www.financedigest.com/three-things-every-payments-professional-needs-know-psd2.html "Three things every payments professional needs to know about PSD2") family with a vulnerable beneficiary is that the use of trusts within wills is essential to make sure that that child is protected.


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