Suppose your loved ones include children, adults with disabilities, or anyone who might struggle to manage money or personal decisions alone.
In that case, a “standard” will could leave them exposed. The right will and, crucially, the correct supporting documents can safeguard their security, state-benefit entitlement, and long-term quality of life. Below is a practical framework you can share with clients when the conversation turns to vulnerable beneficiaries.
Appoint the Right Guardians
For minors or adults who need day-to-day support, naming a guardian in the will avoids a costly, time-consuming court application later. When weighing candidates, look at:
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Relationship and proximity – familiarity and continuity of care matter.
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Awareness of benefits – the guardian should protect means-tested benefits or local-authority packages already in place.
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Ability to work alongside trustees – guardians look after the person; trustees look after the money. They must cooperate smoothly.
Speak to every proposed guardian before signing the will. A short conversation now prevents surprises in the future.
Ring-Fence Assets with Specialist Trusts
Passing assets outright can jeopardise benefit entitlement or expose a beneficiary to financial abuse. Trusts allow you to drip-feed support, preserve benefits and sometimes secure favourable tax treatment.
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Discretionary Trust: Ideal where a beneficiary receives means-tested benefits or is vulnerable to undue influence. Trustees decide when and how to distribute funds. Periodic and exit charges can apply for Inheritance Tax (IHT), but the assets remain outside the beneficiary’s estate.
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Disabled Person’s Trust: Available when the beneficiary meets the statutory disability test (for example, they receive Personal Independence Payment or Attendance Allowance). Any ten-year or exit IHT charges disappear, and income/capital gains can be taxed at the beneficiary’s (often lower) rates.
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Personal Injury Trust: Used to hold compensation awards so that the funds are ignored when means-tested benefits are calculated. This is essential when a court settlement or insurance payout is involved.
Create a Robust Letter of Wishes
Unlike a will, a letter of wishes is private and can be rewritten at any time without a solicitor. Use it to:
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Guide trustees on how (and when) to make distributions, such as releasing lump sums at 25, 30, and 35 or paying school fees directly.
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Share details of therapies, routines, or professionals involved in the beneficiary’s care.
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Express cultural, religious, or educational values you hope will shape future decisions.
Because the letter is non-binding, choose trustees you trust to follow it in spirit.
Address Capacity and Decision-Making
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Lasting Powers of Attorney (LPAs): If the vulnerable beneficiary is an adult and still has capacity, encourage them to establish Health and Welfare and Property and Financial LPAs.
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Deputyship: Where capacity is lacking, the Court of Protection can appoint a deputy, which is slower and more expensive than an LPA.
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Professional trustees: Appointing at least one professional can reassure family members that complex tax and benefit rules will be monitored continuously.
Keep Inheritance Tax (IHT) in View
The IHT nil-rate band remains frozen at £325,000 per person for 2025/26, and the residence nil-rate band can add up to £175,000 if a main home passes to direct descendants. Where estates are likely to exceed the nil-rate band, consider spousal exemptions and lifetime gifting strategies (which can fall outside the estate after seven years).
Review Regularly
Needs change, new diagnoses, changes in benefits, relationship breakdowns, or legislative tweaks can all undermine an otherwise solid plan. There is a need to:
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Review wills and letters of wishes every three to five years or sooner if circumstances shift.
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Check trust investments annually to confirm they remain suitable for the beneficiary’s risk profile and time horizon.
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Stay alert to tax changes, HMRC guidance is frequently updated following Budgets and Autumn Statements.
A will is only the starting point. Guardians, specialist trusts, letters of wishes and ongoing professional oversight knit together to create real protection for vulnerable beneficiaries. As financial planners, we sit at the centre of that conversation, liaising with solicitors, accountants, and, most importantly, families, to turn good intentions into watertight arrangements.
Need help weaving these pieces together? We’re happy to collaborate with your solicitor or introduce you to one who specialises in vulnerable-beneficiary planning. With the right structure in place today, your legacy can continue to nurture and protect the people who need it most, long after you’re gone. Schedule a free, no-obligation chat here. A guide on selecting a financial advisor is also available here.
The information in this article is based on UK law and HMRC guidance as at 22 May 2025 and is provided for general guidance only; it does not constitute legal or tax advice. Always seek personalised advice before taking action.
