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Living well with Alzheimer’s – financial provision

James Hyams looks at what provision can be made in your will for vulnerable persons.
A lot of people might be concerned about making financial provision for a family member who has been diagnosed with Alzheimer’s disease, primarily to ensure that they are well looked after but also to protect and manage their finances appropriately.  This can be done through your will and it is important that if you want to leave money to somebody who may be deemed to be a vulnerable person, you make your solicitor aware of your beneficiary’s circumstances to help ensure the best outcome for them.
Leaving money directly to a vulnerable person can be problematic for the beneficiary, however.  For example, if you have a relative who is receiving means-tested benefits there is a risk that, if not handled appropriately, the money or assets they inherit from you mean that they become ineligible to receive the same package of benefits or their benefits income is stopped completely.
For those who are unable to manage their own finances for any reason, and those who are in receipt of other financial support, trusts (where somebody else would manage the money on their behalf) are useful tools to ensure that your bequest is of real benefit to the beneficiary. The trustees manage the funds and can make payments for the benefit of the vulnerable person as they deem appropriate. These circumstances are far more common than you might think and at Balfour+Manson we have years of experience of dealing with these matters sensitively and in the best way for you and your beneficiaries.
Funds which you put in a trust for someone else’s benefit may also be ‘ringfenced’ to avoid the capital being used up by the cost of residential care. This can help if you are worried that a family member with Alzheimer’s may at some point in the future require full time care, even if they are currently managing to live at home. A ‘liferent’ trust can be set up in your will which holds property or funds in a trust wrapper for the beneficiary’s (the liferenter’s) use. The liferenter could continue to live in the property, rent-free, but they would not actually own the property. If the liferenter did ever go into care permanently, the liferent would terminate and the property would pass in terms of your will. This ensures that at least some of the property could be passed to other relatives rather than have to be sold to cover the cost of care.  You can specify in your will the circumstances which would bring the liferent to an end, and whether the property is then to be sold or transferred to other beneficiaries.
It can be daunting, but taking steps to discuss financial provision for someone suffering with Alzheimer’s can ease a lot of worries and allow you to focus on their daily quality of life, family relationships and friendships.
If you would like to take advice specific to your own situation then please telephone 0131 200 1200 and ask to speak with a Solicitor from our Private Client department.

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