Five things an IFA needs to think about for clients who have special educational needs and disabilities (SEND) children or grandchildren
Working with the families of children needs careful consideration. The families must consider the needs of the child, often for the entire life of the child and they must look at planning through the prism of their child’s vulnerability, needs and possible outcomes. Similarly the family will need to consider the needs of their non-SEND children and how best to balance the respective needs of all their family.
It is crucial that the family as a whole reviews their planning, with grandparents needing to take into account the requirements of SEND children as well as parents. Indeed, some planning from grandparents can be invaluable in securing a SEND child’s future and ensuring the best outcomes, proving both tax efficient as well as financially prudent.
What should you think about to make the best possible plan for SEND families?
1. Understand the nature of the SEND child’s condition and needs
You will need to have a clear picture of the nature of the disability, real and potential vulnerabilities and the possible needs the child has in the short, medium and long term. All planning will stem from that analysis.
It is often tricky to establish the child’s pathway until well into their teens so it is important to build in as much flexibility as possible until the future looks as clear as possible.
2. Make sure that an appropriate Will is in place
Clients should make careful provision for SEND beneficiaries with suitable protection and flexibility. If gifts or legacies are left as a direct inheritance to SEND beneficiaries then this can cause problems if the legacy passes direct to a beneficiary who cannot manage money effectively or indeed if a sudden capital or income boost interacts poorly with existing state benefits received by the beneficiary.
Instead of a direct gift your client can incorporate a trust into their Will, allowing trustees to hold assets on behalf of and for the benefit of the SEBD beneficiary. A well drafted trust makes sure that trustees can apply the gift most appropriately for the SEND child to maximise the benefit of the gift. This can include distributing cash and benefit in a manner that will preserve state financial assistance and protect capital for long-term purposes.
As an inheritance can be intended to provide security for the SEND beneficiary in the long term throughout their lives it is vital to preserve capital so that it is there to enhance and secure the SEBD child’s future.
Make sure that your client has made dedicated provisions for their SEND child in their Wills and refer them to a specialist solicitor if they need proper advice on this planning.
3. Make sure that your client has proper legal protection in place to make sure that the SEND child is looked after if client should die or lose capacity
A Will should make proper provision for Guardians of children if the parent has died. This will normally be the second parent or someone chosen by the deceased parent in their Will.
It is equally important to make provision for care of SEND children in Lasting Powers of Attorney (LPAs) if the parents are carers for SEND children. Tailored provisions in LPAs can ensure that the SEND child’s wellbeing is taken into consideration in case their parent loses capacity
4. Make sure that the SEND parents have planned for their child becoming an adult
The law is clear that every adult over the age of 18 has the right to make their own decisions where they have capacity to do so. Parents of SEND children need to pay particular attention to how decision making will be carried out and whether their child will be able to make decisions, will need support in making those decisions or whether the child will have no capacity to make decisions.
In the case of the first two circumstances it is likely that the child has capacity and the parents will need to consider advising the child to make LPAs, appointing the parents (or other parties trusted by the SEND child) as attorneys. Attorneys can be very useful in ensuring that the person who made the LPA’s rights and wishes are safeguarded. LPAS are an invaluable tool to help SEND children have the protection they need in case of an exigencies. In particular welfare LPAs will provide proper protections so that parents remain involved in decision making about their child’s welfare and wellbeing. The financial LPA will allow them to help the child manage their finances. In both cases the attorneys’ involvement is as a safeguarding measure.
If a child does not have the capacity to make LPAs then the parents should apply to the Court of Protection for deputyships which will allow them to act on behalf of the child in relation to both finances and welfare. This will keep parents in the position of being able to make important decisions and protect their child’s interests.
Parents should also be ready to assess what support the adult child is entitled to from state benefits and support with a particular view to which will be means tested. This will inform estate planning and family financial support which may be needed.
5. Lifetime financial planning
Provision for SEND children should be made as part of normal lifetime wealth and tax planning and the considerations are the same as when making a Will.
Trusts are an important tool in providing protection for the child while also delivering general Inheritance tax planning benefits. There are a wide variety of trust options to consider, including Disabled Beneficiary Trusts, where there are unique tax benefits although such a trust may reduce access to state support and benefits.
Trusts using capital and income from grandparents or inheritances received by parents can be especially helpful.
You can help support parents of SEND children to make the best financial and welfare decisions. The circumstances will vary and it requires careful analysis and understanding of the circumstances to give accurate advice.
If you have a client who is a SEND family member and you would like to talk about how to help them plan for the future then please contact us at firstname.lastname@example.org or on 01865 987781. We have many years’ experience in Court of Protection matters and general private client work ranging from Wills and Probate to Lasting Powers of Attorney, with a specialism working with SEND families. We help parents navigate this complex area easily and effectively, giving them piece of mind that the vital legal protections needed for their child are in place should something happen to them. We can help your client prepare a Will, decide which trust to set up and choose the trustees, including acting as their trustees ourselves, and make applications to the Court of Protection.
Written by Edward James.