I have a disabled son. What can I do to ensure that he receives an inheritance?

I have a disabled child and was wondering what steps to take if I died. (I hope not to die soon, but I always think about it).

I don’t think he will be able to work and want to give him a comfortable life if I succeed. I am divorced from his mother.

I plan to leave a house and savings behind. I have a new partner and am planning to buy a house together (not selling my older house as my son lives there with my ex).

Are there ways to let him benefit from an inheritance but not spend it entirely from an early age, once he turns 18?

Do savings accounts make it worse for him when he needs benefits? Would a pension be better than saving? I know I won’t be there when he can claim that.

Are there financial charities that can help him? PH, via email

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Harvey Dorset from This is Money replies: It’s great to hear that you are taking the time to prepare for your son’s future.

While so many other parents will feel equally inclined to ensure that their children leave a legacy when they die, it’s understandable why this is so important to you given your son’s circumstances.

Your son’s disability will undoubtedly mean that planning for his future will be more difficult, as you will have to deal with the possible loss of certain benefits if you leave him money, and with issues such as whether he is able to manage his money himself. to manage.

As a result, you may need to use a trust, as discussed below, to ensure that his right to certain benefits is not called into question.

The good news is that you have something to leave him, and with some care you can guarantee that he will benefit from it in the future.

This is Money spoke to two financial advisers, one of whom specializes in financial planning for parents of children with special educational needs and disabilities, to find out what you need to do to ensure your son gets what he needs in the future has.

Rhiannon Gogh, director of SJP partner practice, Planit Financial Future, responds: This can be a difficult topic to face, so first of all, well done for tackling it.

Before we start, there are three key challenges when planning for a child with vulnerabilities that are essential to understand.

Firstly, someone with additional needs or disabilities may struggle to access their inheritance, especially if they are unable to make their own decisions.

Second, leaving money directly to someone with vulnerabilities can only make them more vulnerable. Speaking from experience, my son certainly wouldn’t understand if he was being taken advantage of.

Finally, an inheritance left directly to a vulnerable individual could jeopardize the means-tested care, benefits or support he or she already relies on.

Therefore, whatever planning you implement must provide secure access to the funds and obviously not leave your son worse off if he is unable to work.

I suggest you first consider how your will can be used to protect your son from these challenges.

However, a ‘normal’ will is not sufficient in your individual situation. I recommend that you approach a specialist lawyer to arrange a will with a trust. This means that instead of leaving money directly to your son, his inheritance can be protected through a trust set out in your will.

A trust is a legal arrangement that allows one person, the trustee, to hold money on behalf of someone else, the beneficiary.

Your trustees act as “gatekeepers” to protect the trust fund and ensure that the funds are protected only for your son. The trustees could monitor expenditure and act as a control mechanism.

Crucially, the assets held in trust should not affect the means-tested benefits he receives.

Appointing a lawyer with experience in trusts to protect the vulnerable is imperative.

The will includes your choice of guardians who will care for your son if both parents die before he turns 18. Your attorney can also advise you on how to help your son make financial decisions in adulthood.

In addition to the trust, you must also leave a ‘Letter of Wishes’.

This is a non-legally binding private letter to your trustees explaining why you set up the trust and how it should be used (or not!). For example, you can include wishes about future care or living arrangements.

You may also consider purchasing life insurance on your own life so that you can leave an amount in trust for your son if you die.

This often overlooked tool may prove to be an affordable way to create a protected legacy for him.

At the age of 18, all savings or money in a young person’s name is included in income-related benefits.

An amount as low as £6,000 affects entitlement to certain benefits.

However, a personal pension is usually only taken out from the state pension age. Although rules and regulations may change, you should consider whether a pension is appropriate for its circumstances overall, not just its impact on benefits.

There are some fantastic charities you can turn to for support. Your local Forum for parent caregivers can offer courses on wills and trusts, a forum where I have taught courses over the years.

The charity Contact provides support to families with disabled children.

Finally, Mencap Trust Company helps parents arrange trusts for vulnerable dependents, provides professional trust services and can recommend trusted attorneys.

Daniel Hough, financial planner at RBC Brewin Dolphin answers: You may currently owe a small inheritance tax.

Assuming no partially exempt transfers (PETs) have been made in the last seven years, you are entitled to your full nil rate band of £325,000.

In addition, because you own your own home and have a direct descendant, you are entitled to a zero rate of up to £175,000, capped at the value of your share of home ownership.

This means that you have a total benefit of €500,000 because you are not married.

Your inherited tax claims are approximately £550,000 and under current law your pension schemes are excluded.

There is ongoing consultation about changes to pensions, which will become part of the inheritance tax regime from April 6, 2027.

This consultation ends on January 22, 2025, so it is best to wait until it is completed so that you fully understand how these assets will form part of the inheritance tax calculation.

If you continue to work, your wealth will continue to grow, increasing the potential inheritance tax burden.

You want to leave your home to your child and you plan to buy a new house together with your new partner.

To buy this new home, you may need to raise capital from your Isa portfolio, or use some of your tax-free money from your pension if necessary.

Depending on the house you want to buy, you may need to take out a mortgage, so take your budget and affordability checks into account.

If you plan to buy a house with your tax-free money or ‘lump sum’, this will remove money from a current IHT-exempt product and place these assets into your estate, under current law.

When considering setting aside money for your child’s future provisions, you may want to consider a bare trust.

A bare trust may be appropriate for placing money as a lump sum for your child’s absolute benefit for future use.

You explained that given the nature of their disability, it is unlikely that they will ever be able to support themselves, so the more that can be put aside now, the better.

Further additions are allowed, and this is a good start for the seven-year gift rule to fully exempt the property from inheritance tax.

You will be known as the settlor and in your role as trustee you can control the nature of the capital or income payments from the trust for the benefit of your child.

If you’re considering this route, always make sure you have enough emergency funds to draw on. Six months of essential expenses is generally a good rule of thumb.

You may have this capital, but part of it may already be reserved for the upcoming purchase of your new home.

Finally, as a parent, I ensure that you have a will and power of attorney that meets your current wishes.

This is especially important for blended families so that you can ensure that your assets are passed on in accordance with your wishes.