Q. What about my children?
A. Nobody likes to think about both parents not being there to bring up the children, but what if the unthinkable were to happen? Who would you wish to step in and be responsible for their day to day care ?
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If you have children under 18 when you die, serious problems can arise if you haven't made proper provision for them in your will.
Without a Will there are no specific rules as to who cares for your children. It is usually up to surviving family members to decide who take on this difficult role. But what happens if for some reason, those persons are not suitable or there is disagreement?
By making a proper will:-
- - The choice of those you would wish to look after your children is made by you.
- - Appointing a Guardian is done as part of your Will.
- - You appoint Executors to administer your estate on behalf of your children. This ensures that your money is available to meet your children's financial needs as they grow up, particularly in terms of education.
Without these instructions, resolving the serious problems as to who should administer the estate for the children's benefit may cost considerable time and money.
Q. I've got disabled relatives - what about them?
A. Great care is needed if you need to provide for beneficiaries who are either physically or
mentally disabled, or for people who receive certain kinds of benefits – particularly if they may need to go into care, are physically or mentally incapable of managing their affairs, or receive benefits which may be stopped.
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There are a number of different options available:-
Direct gift to the Beneficiary
This may lead to loss of public funding (i.e. benefits they are currently claiming) and the benefit of the gift being largely wasted. If the beneficiary is mentally incapable of managing his or her affairs then someone may need to be appointed to take responsibility and this can be a complex and expensive process.
Gift to another relative on behalf of the disabled beneficiary
You can leave the share intended for the disabled beneficiary to other relatives in the hope that they will support the beneficiary as necessary. However there are a number of risks with this approach. For example, if the relative you have left the gift to gets divorced, or is made bankrupt, or even dies, then the gift could be used to pay off debts instead of supporting the real intended beneficiary. Not to mention mis-use of the monies.
Setting up a trust
The recommended approach is to place the share of your estate intended for the disabled beneficiary in a trust fund with trustees who can be members of the family appointed to use the funds to the benefit of the disabled beneficiary.~ It is quite possible to do this in a way which preserves the right to any means tested benefits or funding and makes funds available for extra and additional expenditure which would not be covered by public funding or benefits.
Often in this way it is possible to make generous provision for a disabled beneficiary without any loss of capital or benefits.
You can set up such a trust under your Will but it is a complex matter and great care has to be taken in the wording of the trust document to avoid it being challenged or contested, but once this is correctly done it can work incredibly simply and smoothly..
This is only a brief outline of a complex area and we are happy to discuss it in greater detail - to do so please email Richard Howard.