S.89 Discretionary Trrust

Trusts Discussion
1

I am in the prcess of implementing a DoV to vary the distribution of an estate. Part of this is to implement a Vulnerable Persons Trust.

My client has emailed me to say:

It has been suggested to me (contrary to my previous understanding), that if a S89 trust has income, which it does not distribute to the disabled beneficiary, that income will nevertheless be considered and will cause loss of benefits and that in this respect at least a discretionary trust is preferable.

This goes against everything I have previously understood to be the case regarding both discretionary and s.89 discretionary trusts.

I would be interested to have other views on the subject.

Many thanks.

Martyn Dixon
Harold Bell Infields & Co

2

I have always assumed that where trust funds are made available to the beneficiary then that beneficiary’s means tested entitlements may be adversely affected. However, so long as such funds do not belong to the beneficiary (as would, for example, be the case of funds in a discretionary trust) they would not affect the means tested benefits.

Maybe my view is over simplistic.

Malcolm,m Finney