Everyone should make a Will to ensure their family is protected after death. If you have a child or a family member who has a physical or mental disability who is incapable of managing their affairs, it is particularly important that you make a Will which provides for the future care and needs of that person.
If you die without a Will, your estate will be distributed according to the Rules of Intestacy. These rules set out how a deceased’s person estate will be divided and your wishes will not be taken into account. If you have a child or a family member who has a physical or mental disability and is incapable of managing their affairs, and you die without a Will, the rules of intestacy treat all children the same and do not make special provision for children with these disabilities. This could result in that child losing their disability allowance, medical card or other benefits from the state as their assets may exceed the means test allowances for these state benefits. The person, depending on the value of the estate which they inherit, may require to be made a Ward of Court.
The best way to cater for the needs of a child with a disability is to make a Will where your wishes are taken into account and where you can make proper provision for them after death. This can be done by appointing Testamentary Guardians and creating a Discretionary Trust where some of your estate is put into this Trust for the benefit of your disabled child. Your Trustees will have the power, with guidance from you in a letter of wishes, as to how best use the Trust funds for the benefit of your disabled person. The advantage of a Discretionary Trust is that the disabled person will not have legal ownership of the Trust and therefore will not be compromised by State means test for allowances.
A Discretionary Trust created in a Will, is a complex document that needs to be prepared with the benefit of proper legal and tax advice. A properly drafted Discretionary Trust in a Will can avail of Discretionary Trust Tax exemptions under Section 17 of the Capital Acquisitions Tax consolidation acts 2003.
What do you need to consider when making a Discretionary Trust in a Will?
- Who to appoint as Executors (we recommend a minimum of 2 Executors).
- Who to appoint as Testamentary Guardians of the person with the disability (we recommend a 2 Guardians).
- Who to appoint as Trustees of the Discretionary Trust (we recommend a minimum of 2 Trustees).
Although the Trustees, Guardians and Executors can all be the same persons, it is wise at least to have one separate party to act as a Trustee to ensure independent scrutiny.
David Walley + Co Solicitors recently attended the Down Syndrome Dublin Conference and we advised parents of children with down syndrome how they can best cater for the needs of their child in their Will. We would be delighted to meet with you and advise you of your options.