Setting up a trust for my daughter with LD

[Bubbles99]

Hi there, I have been to the Mencap event on wills & trusts which was very informative but wondered what peoples experiences were and if anyone has managed to do for a reasonable sum, it is so expensive. Many thanks

[BenjiB]

I’ve no idea about trusts but just to say there are a few posts on it which may be helpful.

We haven’t decided what to do about this yet. So many different views!

[Bubbles99 in reply to BenjiB]

Thank you, I’ll have a look 😀

[Maurice_Mencap Partner]

Hi Bubbles99 , glad you found our Wills & Trusts session informative! I'm no expert on the subject, so would be great to hear from others if they have any experience of brining the cost down. Out of interest, what are the biggest expenses with setting something up?

For anyone that is interested in finding out more, Mencap's Wills & Trusts team can offer free and impartial information on planning for the future. and you can learn more on our website at mencap.org.uk/advice-and-su...

[Bubbles99 in reply to Maurice_Mencap]

It’s the solicitors fees, so expensive

[CALLADINE]

Hi Bubbles 99 we are currently looking to set up a trust for our 29 year old daughter. We have attended MENCAP information sessions, which were very helpful, but like you, we felt that they were very expensive, especially when they take an annual % charge. We are torn between having to pay a lot more money out, whilst MENCAP probably have a better understanding of dealing with LD, the other companies are going to leave more money for my daughter. There seems to be a lack of information (especially on charges) for trust funds in general. If anyone can help please let me know.

[Bubbles99 in reply to CALLADINE]

I agree. I set up a will about 15 yrs ago but did nothing about a trust for my daughter, however, I paid to have any changes at the time and they are fine in adding a trust. My issue is that the advice from Mencap is to use a specialist firm? I have recently sorted LPA for both Finance & Health for my daughter (and my mum) for cost via government website, I can tell you far less than a solicitor but I’m under no illusion this maybe more confusing but is there any advice to do DIY to at least a certain point ? Everything costs so much

[sl20]

Hi we did our wills with the co op and a trust will be set up when we both die. It cost about £2000 as far as I remember but there was no talk of an annual percentage charge. We felt we needed to get our wills done otherwise if something happened to us all the money from the sale of our house would go to pay for care.

[Bubbles99 in reply to sl20]

Thanks for your reply, that seems a lot, but they can get very complicated I know.

[redsails]

20 years ago we were in a similar position just prior to our son moving out of the family home and into his own supported living environment. A group of us parents were advised by our local Carers Centre to make or amend our wills. They further advised us to contact the Law Society and ask them to recommend solicitors in our area who specialised in drawing up wills and trusts where there is a vulnerable person involved. We were surprised to discover there were only 3 in our area who specialised in working with families such as ours. It’s the best advice we could have had as there were many factors, some quite complex, that we wouldn’t have been aware of. Making a will is a daunting prospect for many people and it’s important to get it right to ensure your vulnerable family member is protected financially. It cost us about £1,500 and although it seemed astronomical at the time we realise now it was a price worth paying just for their expertise and our peace of mind. Good luck.

[Bubbles99 in reply to redsails]

Thank you, much appreciated

[JacksDad]

Hi Bubbles99

We went through all this back in 2011, taking advice from MENCAP and a local STEP solicitor (Society of Trust and Estate Practitioners). Set up Jack's Trust with £10 and redid the wills to pay into the trust rather than to Jack personally. We decided to use our own trustees rather than MENCAP.

We decided to pay some money into the trust a year or two later. Then in 2015, Jack's mum suddenly passed away, followed by his gran a few months later, and their estates moved into trust for Jack. Losing your partner suddenly is a big enough blow, but the fact we had set up the trust previously at least made that side of things so much easier to deal with. I am so glad we did this at the time and didn't leave it to later.

I have searched my records but can't see how much it cost to redo one will and set up the trust. Don't think it was anywhere near £2,000 though. The second will was changed simply by adding a codicil. There should be no annual charges to pay once you are set up. Once the trust has some money in it, you need to register it with HMRC to have a Vulnerable Persons Election, assuming your daughter qualifies (gov.uk/trusts-taxes/trusts-.... This gives your trust a favourable tax treatment, the money in it is considered as your daughters, even though it is in a trust, but you do have to complete a tax return each year.

I manage the trust myself, and do the annual tax return, although we do take professional advice concerning investment etc when required.

To sum it up - do it now!

Good luck

Jack'sDad

[learner01]

Our solicitor advised us to set up a Vulnerable Person’s Interest Trust which is a discretionary trust. Which means that although the disabled person named can benefit from the trust they have no absolute right to the assets- if they did then the assets could be all be used to pay for their care. Although legal advice is expensive I found it helpful and saved making possibly even more costly mistakes including potential tax ones. I found legal and tax information written in such complex ways it’s very hard to understand and without knowing all the rules risked later discovering I’d misunderstood or missed something important. Presumably legal or tax advice would be an expense that could be paid for out of the trust but a solicitor or accountant could advise on that.

[Blue4rose]

We have also spent a lot of time looking at these options, and come to the same conclusion. It is not just the cost of setting up the trust, but the annual charges for investment management. Even more expensive is the annual cost of professional trustees if this is required, which it will be for us. If there are family members who are able to take on this role long term. The initial and annual charges for these services are a very significant drain on the funds left in trust for the vulnerable person. If anyone has found a more cost effective efficient service we would love to know.