HM Insights

The Shetland blog: A plan to protect young or vulnerable family members

Every month, lawyers from Harper Macleod - the biggest Scottish law firm with an office in Shetland - share their insights on issues which can affect local businesses and individuals.

Julie Doncaster, a Partner at Harper Macleod who specialises in dealing with personal legal issues, examines how to protect young or vulnerable beneficiaries.

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The parents of young children or the carers of vulnerable adults can often feel overwhelmed by the thought of planning for the future or making their own Will. However, a well drafted Will, Power of Attorney or Personal Injury Trust Deed could ensure the long-term protection of a vulnerable person and the preservation of means tested benefits.

To highlight some of the key ways a carer can ensure their years of hard work in caring for a young or vulnerable person are not in vain; we consider the plight of the Dumpty family. 

Mr H Dumpty is widowed with two grown up children, Jack and Jill. Jill has some personal issues, is in the midst of separating from her husband and is struggling to cope. Jack is in a stable relationship with two young children.

If Mr Dumpty dies without a Will, Scottish succession provisions require his court appointed executor to make over a set proportion of his estate to Jill directly.  This may result in Jill's troubles spiralling out of control or her husband ending up with her inheritance.

To prevent this, Mr Dumpty could have opted to set up a trust within his Will to receive Jill's share. The trustees could thereafter drip feed funds to Jill or pay for items directly giving her the best chance to cope with her problems and avoid funds falling into the matrimonial pot.

Mr Dumpty's sister, Mary, is due to receive a personal injury award after a car accident. She is already in receipt of means tested benefits.  If Mary does not set up a Personal Injury Trust within 52 weeks of her award, her means tested benefits may be removed.

As a complication of her road accident, Mary was diagnosed with a brain disorder.  Within six months she has lost legal capacity and the family are required to apply for a Guardianship Order to look after her affairs.  Within the six months window, Mary could have instructed a Power of Attorney to be drafted so that she could choose who she would like to operate on her behalf. This would have involved a fraction of the cost of the Court application with very few ongoing obligations for the attorneys. In comparison, the appointed guardian will be subject to strict reporting requirements including preparing annual accounts and management reports. 

Finally, having not learned the lesson of his father's estate, Jack also dies without a Will. At 16 his young children will be entitled to receive their inheritance. A Will would have provided Jack the opportunity to appoint guardians to his children and extend the timeframe for inheriting to perhaps 25. Trustees would have been able to ensure the children received funds for their education, maintenance and even for their general enjoyment but would have protected them from deciding to spend their entire inheritance before they had even left school.

If any of the Dumpty's circumstances ring true for you or your loved ones, it is vital to seek legal advice as early as possible.

 

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This article originally appeared in the Shetland Times