Making a will to benefit a child with special needs and/or a vulnerable adult -points to consider
A well written Will is the only way to make sure that the needs of a child with special needs are met to best effect, and in a tax efficient manner.
An experienced probate and wills solicitor will be able to help you.
Some questions which your solicitor may ask at your first meeting to help them draft the very best will to meet your purpose are:
1. What is the short and long term diagnosis of the child?
2. Is the child’s disability mental or physical or both?
3. What are the child’s physical emotional and financial needs now and what are they likely to be in the future?
4. Is the child’s condition likely to improve or dis improve?
5. Is your child in receipt of state benefits, a disability allowance, a medical card or other means tested benefits?
Your solicitor will advise you on the tax implications of the will as drafted.
Your will depending on your circumstances may include a benefit for qualifying expenses, as a benefit taken for qualifying expenses of a person permanently incapacitated by reason of physical or mental infirmity are exempt from Capital Acquisitions Tax provided the Revenue Commissioners are satisfied that the benefit was or will be applied for such a purpose.
Your solicitor will most likely look at setting up a Discretionary Will Trust; this gives the benefit to trustees named in the will to hold for the benefit of the vulnerable beneficiary. A discretionary trust as its name suggests gives the trustees discretion as how best to manage the trust fund and in the end distribute the property or funds.
Discretionary trusts are exempt from discretionary trust tax, (initial DTT 6%) where it can be shown to the satisfaction of the Revenue Commissioners that it is created exclusively for the benefit of one or more named individuals who are because of age or improvidence or physical, mental or legal incapacity incapable of managing their affairs.
Revenue Commissioners will not confirm the exemption of the trust as set up pre death so your solicitor may request a letter from the child’s doctor or letters from yourself or your child’s carers to confirm that the person is incapable of managing their affairs. Your solicitor will keep it with your will so that it can be provided to the Revenue to support an application for Discretionary Trust Tax exemption is claimed
This is a complex area and you should seek the advice of an experienced solicitor who will be happy to assist you.
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