A trust can be used to provide financial support for a disabled or otherwise vulnerable beneficiary without giving them direct responsibility for managing a large inheritance.
The trustees can manage the trust’s money or property and make payments according to the beneficiary’s needs. This can provide long-term oversight and protect somebody who may struggle to manage their own finances or who could be vulnerable to pressure from other people.
Certain trusts for vulnerable beneficiaries may qualify for special tax treatment when the relevant legal conditions are satisfied. However, receiving money or assets can also affect a person’s entitlement to means-tested benefits, depending on the type of trust and the beneficiary’s rights.
The trust must therefore be carefully structured around the person’s circumstances, likely future needs and any benefits or care arrangements they receive.