Providing for SEND Children using a Disabled Persons Trust

As a Chartered Financial Planner, I’ve recently had the opportunity to focus my CPD on a topic that is immensely important to families with Special Educational Needs and Disabilities (SEND) children: securing their future through sound financial planning.

In England, around 17.3% of children are recognised as having special educational needs, equating to about 1.5 million children. When considering the broader family impact, this number potentially affects up to 3 million parents and 6 million grandparents. The widespread influence of SEND issues is undeniable and highlights the importance of specialised planning for these families.

Of these children, 517,000 in England have an Education, Health and Care Plan (EHCP). This is vital for those with learning difficulties or disabilities that require specialised educational provisions. Ensuring that these children have the appropriate support to flourish is paramount.
Understanding the complexities of SEND provisions involves a multidisciplinary approach, engaging carers, medical professionals, solicitors, financial advisers, and social workers. Each professional plays a crucial role in delivering comprehensive support to the families involved.

Understanding the Benefits of a Disabled Persons Trust

In addressing common concerns from SEND families, I’ve often discussed setting up a Disabled Persons Trust with their child as the primary beneficiary. So, you may be asking how it differs from other financial planning strategies.

Many families have saved for their children’s future through products such as Child Trust Funds or Junior ISAs. However, a significant challenge arises if, at 18, these children lack the mental capacity to manage these funds, leaving them inaccessible. A Disabled Persons Trust solves this problem as it is the Trustees rather than the beneficiaries who have control.

The funds in such a trust are taxable on the beneficiary, allowing for the utilisation of their personal tax allowances. Additionally, any gift made into the trust is immediately outside the donor’s estate for Inheritance Tax (IHT) purposes. Trustees have discretion over the fund’s investment strategy, and it’s possible to name other non-SEND beneficiaries within the trust document.

Setting Up a Disabled Persons Trust

When asked about the steps to establish a Disabled Persons Trust, my advice is always to seek professional guidance. A Disabled Persons Trust can be initiated during a donor’s lifetime or incorporated into the will-writing process. Given the intricate legal and financial considerations involved, consulting with a specialist lawyer is essential. Should you need assistance, I can facilitate an introduction to a trusted lawyer to ensure that your child’s specific needs are thoroughly addressed.

By offering this insight and expertise, I aim to provide families with the knowledge and guidance necessary to effectively plan for the future of their SEND child. Understanding and utilising structures like Disabled Persons Trusts can make a significant difference in securing a stable and fulfilling future for these children.

Ready to Help with Tailored Financial Advice

If you’re looking for financial advice or need assistance planning for a family member with special educational needs, me and the rest of the team at Wise Investment are here to support you. Contact us for a no-obligation chat to discuss how we can help secure a bright future for your loved one. Whether it’s setting up a Disabled Persons Trust or exploring other financial strategies, we’re here to guide you through every step.

Joseph Cooper FPFS

 

The information contained in this article is not a personal recommendation and should not be construed as advice. If you are unsure about the suitability of a particular investment strategy, you should speak to an authorised financial adviser.

Wise Investments Limited is authorised and regulated by the Financial Conduct Authority, reference number 230553. Registered in England 4970458.