iTrust Vulnerable
Vulnerable Beneficiary Trust
Key Features of iTrust Vulnerable
It is designed for circumstances where simply transferring an inheritance outright may not provide the best outcome for the beneficiary.
The trust can be used to support a person who requires enhanced financial oversight even where they do not meet the statutory definition for special tax treatment. Where the statutory conditions are met, additional qualifying treatment may be available for a separately identified fund.
Key Features
Can help protect access to means-tested support
Can help protect access to means-tested support — keeping capital under trustee control may avoid the consequences of an outright inheritance, and the Trustees can take the Beneficiary’s benefit position into account when deciding how support is provided. Benefit entitlement depends on the rules and circumstances applying at the time and cannot be guaranteed.
Special tax treatment is not automatic
Where the Beneficiary meets the statutory conditions, the Trustees can consider ring-fencing a defined part of the trust for that person and making the elections or claims available for qualifying vulnerable or disabled beneficiaries. Special tax treatment is not automatic and depends on the Beneficiary’s circumstances, the trust terms and how the relevant fund is administered.
The trust can be used to support a person who requires enhanced financial oversight
The trust can be used to support a person who requires enhanced financial oversight even where they do not meet the statutory definition for special tax treatment. Where the statutory conditions are met, additional qualifying treatment may be available for a separately identified fund.
Qualifying vulnerable-beneficiary fund available where appropriate
Qualifying vulnerable-beneficiary fund available where appropriate — if the statutory conditions are met, the Trustees can formally identify and ring-fence a defined part of the Trust Fund for that Beneficiary and administer it under the rules required for the relevant tax treatment.
Support can be provided without handing over a lump sum
Support can be provided without handing over a lump sum — the Trustees can pay carers, landlords, therapists, education providers, equipment suppliers and other providers directly, or reimburse properly evidenced expenditure where appropriate.
Letter of Wishes
Your Letter of Wishes allows you to explain your priorities, concerns and preferred approach to long-term support. The Trustees can take that guidance into account while retaining the legal discretion required by the trust.
Keeps trust capital under trustee ownership rather than placing it outright in the Beneficiary’s hands
Keeps trust capital under trustee ownership rather than placing it outright in the Beneficiary’s hands, which can reduce exposure to misuse, undue influence and inappropriate third-party control.
Can receive additional gifts over time
Can receive additional gifts over time — the Trustees can accept further cash, investments, protection policies or other suitable assets through the appropriate transfer documentation, subject to Trustee review.
Features to retain without substantive change
Special vulnerable or disabled-beneficiary tax treatment
Special vulnerable or disabled-beneficiary tax treatment may be available where the statutory conditions are met and the appropriate fund, election and administration are put in place.
Changes to beneficiaries, trust funds or distributions which may affect qualifying vulnerable-beneficiary treatment are subject to Trustee and technical review before implementation.
What Happens to My Vulnerable Child When I'm Gone?
If an inheritance is left directly to your child and takes their savings and other counted capital above £16,000, they could lose their entitlement to Universal Credit.
And that’s just one of the things many parents don’t realise when planning for a vulnerable child’s future.
Watch our FREE webinar now to learn what you should consider and how you can plan for your child’s future when you’re no longer there.
The session is around 25 minutes and is hosted by Alan Mountford-Brown, who has personal experience of planning for a vulnerable family member with Angelman syndrome.
Watch when it suits you
Sign up once and access the webinar on demand.
The trust allows support to be provided under trustee control
The trust allows support to be provided under trustee control, with the Beneficiary’s circumstances and benefit position considered as part of the Trustees’ decision-making.
The trust creates a financial-support and asset-management framework. It does not itself confer authority to make medical, care or welfare decisions for the Beneficiary.
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Contact UsFrequently Asked Questions
What is iTrust Vulnerable?
It is designed for circumstances where simply transferring an inheritance outright may not provide the best outcome for the beneficiary.
Can the beneficiary still receive substantial support?
Yes.
The purpose is to allow trust funds to be used for the beneficiary without necessarily requiring all of the capital to be transferred into their personal ownership.
What might the trustees pay for?
Depending upon circumstances, this could include accommodation, care, equipment, education, therapies, transport and wider quality-of-life needs.
What about means-tested benefits?
The precise trust, benefit rules and beneficiary circumstances need to be considered.
The advantage of the structure is that the family is not forced to assume an outright inheritance is always the best answer.
Important information
The benefits described are general illustrations of how the relevant iTrust may operate when appropriately structured and funded. Actual legal, tax and asset-protection outcomes depend on individual circumstances, the assets involved, the terms of the trust and any supplemental instruments, effective implementation and applicable law at the relevant time. Trustee decisions remain subject to the trust deed and their legal duties. Tax treatment and protection from third-party claims cannot be guaranteed and specialist advice may be required.
Eligibility for means-tested benefits and special vulnerable-beneficiary tax treatment depends on the applicable statutory rules and the Beneficiary’s circumstances at the relevant time.
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