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Court of Protection agrees inheritance can be placed in trust so as not to affect means-tested benefits

The England and Wales Court of Protection has approved an application for the £170,000 inheritance of a 21 year old woman (LMS) with a learning disability to be placed into a disabled person's trust (rather than inherited outright) so that it will be protected from benefits means testing. 

It does seem a little strange that the Court decided that the "significant operative purpose" of creating the Trust was to better effect the wishes of LMS' late grandfather who had intended his granddaughter to benefit financially from her inheritance, rather than to allow LMS to receive her benefits (despite this appearing to be a clear motivation to bring the case to Court). 

It is important to note that the decision is not binding on any benefits authorities.  

As always, it is advisable to take advice before writing your Will if you are intending to benefit individuals who are receiving means tested provision, in order to determine the most effective way of achieving this. 

The EWCOP decided that entitlement to means-tested benefits was not in this case a 'significant operative purpose' of the settlement. Its real purpose was to put into effect the wishes of LMS' late grandfather, who had intended her to benefit financially from her inheritance, and would have changed his will if he had realised that giving her the money outright would have led to her benefits being cut. The EWCOP thus decided to approve the settlement. However, the relevant local authority and benefits agency are not bound by this decision and are free to contest its conclusion (Re LMS, 2020 EWCOP 52).


courtofprotection, wills, disabledpersonstrust

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