Protecting a vulnerable beneficiary with a Trust.

When a client is leaving their Estate to a vulnerable beneficiary, we work very closely with them to ensure that the beneficiary is protected. In these situations, a Trust can be ideal as restrictions can be placed on how the beneficiary receives their inheritance.

The beneficiary in this case is in receipt of means tested benefits and has a poor understanding of money and finances. Our client’s concern was that the beneficiary would have squandered their inheritance almost immediately.

The advice we gave them was for a Discretionary Trust, which would allow the trustees to avoid passing on the inheritance all in one lump sum. Instead, the Trustees are able to make payments as and when they are needed, maximising the residual Estate in the long term.

An additional benefit of the Discretionary Trust in this case was that by not inheriting all in one go the beneficiary did not lose their means tested benefits and has been able to continue their day-to-day life as near to normal as possible. This has meant that the beneficiary has been able to make the best use of the inheritance left to them after our client passed away.