Mental health is key for estate planning

It could be that a beneficiary may be unable to manage a lump sum of money themselves, for example they may not spend the money wisely, or they might be vulnerable to third parties.

Likewise, if they are in receipt of certain benefits, receiving a lump sum of money outright could mean that they no longer qualify under means-tested assessment rules. 

In these circumstances, it may be more prudent to use discretionary trusts within the client’s estate planning, allowing them to nominate trustees to manage the money on behalf of the beneficiary.

This is usually done in accordance with a letter of wishes setting out the client’s intentions and wishes for how the money should be used.

Libby Holding is legal services director at The SimplyBiz Group