Leaving money directly to a vulnerable beneficiary — someone with a disability, mental health condition, addiction, or simply poor financial judgement — can do more harm than good. A direct inheritance above £16,000 can end means-tested benefits like Universal Credit overnight, leaving the person worse off than before.
The solution is a properly structured trust. A disabled person’s trust offers the best protection: assets are held for the beneficiary’s benefit without counting as their capital, so state support continues. It also receives favourable tax treatment — no periodic or exit charges. For children who have lost a parent, a bereaved minor’s trust or 18-to-25 trust provides similar protection until they are ready to manage the funds.
The key is identifying the vulnerability and choosing the right structure before it is too late. If someone in your family might need extra protection, your estate plan should reflect that now — not after the damage is done.