I’ve been approached by a client who is on means-tested benefits and qualifies as ‘vulnerable beneficiary’. His mother has died intestate. He is nominated as the beneficiary of her death in service (total £60k). He wants to set up a trust to receive the payment so as to preserve his benefits.
Given that the payment is discretionary I don’t think a Deed of Variation to set up the trust is going to get me anywhere, which means the trust will be set up by the client and settlor-interested. I don’t this is much of an issue given the low values involved.
Do you think the best approach is to contact the trustees to ascertain whether they would be willing to pay the funds to a trust set up for the benefit of the beneficiary? I suspect they would be altogether happier if the trust had been set up by the deceased. Has anyone come across a similar situation and has any comments?
Also, I was leaning towards a Disabled Persons trust, but given that the trust will be settlor-interested is it better to simply have a discretionary trust?
Many thanks.