Wills

[Lizzie]

My daughter has a mental health illness. I have 3 children. My concern is when my husband and I die and we leave money behind. Our daughter can become very unwell when she has a large amount of money. Also it may affect her disability payment. What have others done about this. 
sorry this is vague. But my concern about this is disabling.

[Ru-bee]

Hi @Lizzie and welcome. 

While I can't personally offer guidance on this, I'm wondering if it might be something that you could discuss with your lawyer to talk about what options there might be when creating the will?

[Lizzie]

I do plan on doing that but I don’t want to go in there with no knowledge. Thanks for your reply.

[tyme]

I'm not sure how old your daughter is, but from experience, people set up trust funds to hold onto that money @Lizzie

I hear your concerns. I hope you get some answers from the lawyer.  

[PeppyPatti]

Hi @Lizzie 

How are you tonight ? 

Yes, I met a man who got very unwell when he got two inheritances. I even went with him to the bank and tried to get him to place it in a trustees fund ( I think) but the next day he walked in there and took all the money out. He was also extremely rude to me about that.......

Even though I'm 57 my stepmother decided to gift me money. She has it in a trustees account for me. There is nothing I can do to withdraw anything. As I'm on a pension, I got a lawyer and a whiz bang financial advisor I was referred to  from GOOD friends  - people who have known me all my life. She is working out my pension not to be affected even with my new found wealth. 

I'm extremely vulnerable. I'm both extremely grateful for her concern however a tiny bit  annoyed that she doesn't trust me. 

Hope this helps. 

[Lizzie]

From my own experience I’m sure your grandmother had your best interest and wellbeing in mind. Take care.

[Lizzie]

Sorry-step mother

[LondonCalling]

Lizzie, I know how you feel because I have exactly the same worry.

I'm getting ready to consult a lawyer by writing a list of questions and concerns to discuss. So what folllows is not legally informed and maybe not factually correct - just my thoughts.

I understand that setting up a Trust managed by one or more Trustees is usual. I'll  be asking about: 

• The cost of establishing a Trust and the ongoing management fees (for example, whether they need to be audited each year).  
• If the amount in the Trust is small, could it mostly be chewed up in management fees?
• Should I set up a Trust for my daughter while I'm still alive?
• How will it affect my daughter's disability pension?
• What's the alternative to a Trust? 

A friend of mine manages his brother's inheritance simply by having it in a high interest bearing bank account in his own (my friend's) name because then it doesn't affect his brother's pension. That takes a lot of small-t trust, of course, and is not secure legally.

But Trustees for legally-established Trusts also have a lot of power over how and when the money is spent. So it must be really important to pick the right mix of people to be Trustees - who will have my daughter's best interests at heart and have good judgement, but also people who can be impartial - not have any self-interest in the money, and not be swayed into bad decisions by my strong willed daughter.

My other (financially sensible) daughter would be an obvious choice, but I'm worried about creating a situation where their loving relationship as sisters is damaged by one being a Trustee. Also, however much we don't want to think one of our own kids would abuse their financial power over a sibling, it happens in some families and trusted children can be pushed into bad decisions by greedy partners.

I understand that legal firms and the government State Trustees can be nominated as Trustees, but charge ongoing management fees.

I realise not everyone will have this choice, but I'm looking at whether I could give my daughter her inheritance as a house or apartment, instead of money. If she lived in it, I don't think it would affect her disability payment. And if the house was owned jointly (not necessarily 50:50) with her sister, it couldn't be sold without both agreeing.

Best wishes, and you're doing the right thing by  thinking about this question.

[Itsadog]

Hi. I'm going through the other end of this atm as a consequence of a poorly written Will and a sibling with a mental health condition. My mum got really sick and realised the Will was inadequate but was never able to see a lawyer to amend it before she died. Now we're in a big mess and I am exhausted trying to manage my sibling.

So here's a few thoughts based on what I'm going through - hope it helps.

1. Do not be afraid of setting up a Trust managed by the other Siblings - they are going to end up having to manage even worse if you don't and that will potentially damage the relationship even more. It is really hard and emotionally exhausting to try to get a financial power of attorney or guardianship after the horse has bolted.

2. As my mum discovered - it's better to see a lawyer at a bigger practice who may have dealt with setting up wills for children with disabilities, and who have experience with trusts; and don't scrimp - you want it done properly.  My mum went to the little local law firm that was cheap and the resultant will has caused so more problems than if she had done it herself. It also helps if the lawyers are going to be around for a while, I found with my late brother's will, it's far easier to get the law firm who wrote the Will to help set up the Trusts.

3. Ensure you have provisions in case one of you get dementia or some other cognitive issue that could impact on decision making (incl those around your daughter, esp if she relies on her parents for help) and/or if the surviving partner has to go into care. This is another thing we are struggling with. 

4. Let both your other kids and possibly an aunt/uncle do be Executor. It's going to be harder with a person with a disability to manage an estate and it would help if someone a little at arms length could help out.

5. Don't forget your Superannuation. It is often paid as a lump sum separate to your Estate and can be hard to get put in Trust

Good luck. Like I said, this is just my experience. 

[rav3n]

hi there @Itsadog just popping in to welcome you to the forums! and hey @LondonCalling, thank you both for sharing your insights.  

i also wanted to share a quick tip around tagging - you can tag members by using the @ symbol and typing out their username and selecting it once it pops up. once you've tagged them, the username will turn blue and this will ensure the member gets notified of your response, like this @Lizzie hope this helps!

@Lizzie the above posts are responses to you 😊