4 ways financial planners and solicitors can support families with special needs

Families with special needs or vulnerable children often face a unique set of legal and financial challenges.

Whether the vulnerability is due to a disability or mental health challenges, such as addiction, these families typically require more tailored support than others.

A joined-up team of financial planners and solicitors is well-positioned to assist such families. By working together, they can provide coordinated advice that addresses both the financial and legal complexities involved, and can help families create plans that protect their children now and well into the future.

Read on to find out four ways financial planners and solicitors can support families with vulnerable children.

1. Putting financial protection in place if they’re unable to continue care

Many families with vulnerable children plan carefully for what will happen after they die, but fewer have arrangements in place for times when they may be unable to provide care during their lifetime.

This could be due to illness or the physical demands of caring becoming harder with age. Indeed, there is often a transition period between the parents providing care and death, during which the support arrangements may need to adapt.

Solicitors can help put legal protections in place by drafting Lasting Powers of Attorney (LPAs), both financial and health and welfare. They can also help formalise care arrangements and ensure that legal responsibilities are clearly documented.

Meanwhile, financial planners can identify potential financial difficulties if a parent has to stop working or reduce their hours. They can also work with families to explore insurance options that could help provide coverage for care if they fall ill or are unable to work.

Additionally, financial planners can model the cost of care or reduced income and develop a budget to ensure sufficient cash is available. This reduces the risk of being forced into bad financial decisions at a stressful time.

2. Ensuring continuity of care after death

For families with children who have special needs, one of the greatest concerns is what will happen when the parents are dead.

Ensuring continuity of care involves naming future carers, appointing trustees, and setting out how decisions should be made on the child’s behalf if they are unable to do so themselves.

Solicitors can play a crucial role here by drafting wills that reflect the family’s wishes and accommodate their care needs. This might include appointing guardians and trustees to care for the children and manage their wealth, or assisting in setting up new LPAs where appropriate.

Financial planners can make sure that the appointed guardians and trustees get the support they need to manage the financial side of these arrangements.

They can also help forecast the long-term financial needs of the child to enable parents to see how far their funds will go once they’re gone and what adjustments they may need to make.

3. Establishing trusts

Trusts are often central to securing a vulnerable child’s long-term financial wellbeing, particularly when they may not be able to manage money independently.

Financial planners can advise on the most appropriate type of trust, such as a discretionary trust or a disabled person’s trust. They can then support the trustees by advising on how trust assets should be held and distributed over time.

Solicitors establish the trust and draft the trust deeds to ensure they reflect the family’s wishes and are compliant.

Together, financial planners and solicitors can help ensure trusts are properly set up, and that the funds are sustainable and used effectively to support the child’s care and quality of life.

4. Preserving entitlements to allowances and benefits

For families with even moderate levels of wealth, there is a real risk that a child with special needs could lose access to important allowances and benefits if assets are not structured carefully. This risk applies both during the parents’ lifetime and after their death.

The key is to organise wealth with benefit entitlement in mind. While this is particularly important for planning after the parents’ death, it can also be relevant while the parents are still alive, as it helps ensure the child continues to receive funded support.

Financial planners can help families map out their finances with a clear understanding of how different assets, income streams, and inheritance strategies may affect the child’s benefits. This might include advising on the use of trusts during the parents’ lifetime, managing gifting strategies, or deciding what assets to leave to the child.

Meanwhile, solicitors can establish and maintain trusts, ensure wills are aligned with the intent of preserving benefits, and offer guidance on the legal implications of transferring certain assets.

Get in touch

To find out more about how our sectors can coordinate for the benefit of our mutual clients, get in touch.

Email info@fbwealth.co.uk or call us on 0333 1122211

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, tax planning, trusts, Lasting Powers of Attorney, or will writing.