Settled Advance from bare trust


(Helen Taylor) #1

I am advising clients who are parents of a severely learning disabled girl who is turning 18 in two weeks time. She does not have capacity to manage her own affairs and will never live independently. With all good intentions they have been spending their own money on her and saving birthday and Christmas gifts from extended family, her Disability Living Allowance and now her PiP payments, throughout her childhood into a simple bank account in her name, on which the mother is named as trustee. It now amounts to about £100k. I am satisfied that it is in her best interests for the monies to be protected for the purpose of assessment for benefits and want to use s32 to make a settled advance into either a disabled persons trust or even a fully flexible discretionary trust. However, there is no trust document as such so am I right in thinking that the date for commencement of the trust will be the date the bank account was opened which was 2000. In which case, can I only advance half? Could the parents instead / as well as, rely on the Children Act and their parental responsibility, in order to decide to settle it all on discretionary trust? do Forum members have any ideas about how to deal with this?

Helen Taylor
Franklins Solicitors


(Paul Saunders) #2

It looks to me as though the mother is no more than a bare trustee.

If the purpose of placing the monies in a discretionary trust is to secure future means tested benefits, I would have thought this would undermine the ability to claim, as in other “deprivation” scenarios.

Paul Saunders


(Helen Taylor) #3

Thank you for taking the time to respond. I appreciate the risk about the Deprivations rules but I have a forlorn hope there may be some sympathy in terms of the assessment of her capital and deprivations.

Anecdotally, I understand from contacts at a leading learning disabled charity, that it is sometimes accepted that in these circumstances such a transfer will be ignored, the blame lying with the well meaning parents who saved the benefits paid to them for her and spent their own instead. If no action is taken, the money will be certainly taken into account and the clients would like at least to attempt something.

On that basis I would like to try and get as much as possible out of the bare trust and so my question is in Trust Law about the commencement date of the bare trust and whether they could rely on s3 Children Act?

Helen Taylor
Franklins Solicitors