The main purpose in forming this type of Trust, is to protect the interests of loved ones who are no longer capable of looking after their financial affairs. The Trust can help ensure their quality of life, whilst at the same time assist in protecting ‘entitled benefits’.
The ‘Vulnerable Persons Trust’ is designed to protect the disabled, and those persons with special needs. This Trust is similar to a ‘Discretionary Trust’, in that the trustees have extensive powers over how the assets are managed within the Trust, and how they are utilised. There is a disparity between these two types of trusts, in which the ‘Vulnerable Persons Trust’ has favourable tax treatment for inheritance tax, capital gains tax, and income tax purposes, than that of a Discretionary Trust, (provided certain conditions are met).
We can advise you as to whether this Trust is suitable for your individual circumstances, and explain fully to consider all options available.