How to plan your estate if you have vulnerable beneficiaries

A person in a wheelchair.

Planning how your estate will be passed on is always important, but it’s especially so if you have vulnerable beneficiaries.

Though definitions can vary, the Financial Conduct Authority (FCA) describes a vulnerable person as someone who, due to their personal circumstances, is especially susceptible to harm.

This might include:

  • Children or young adults
  • Older people
  • People living with disabilities
  • People experiencing mental health issues or struggling with addiction
  • People facing serious financial difficulties.

If you have beneficiaries who might be considered vulnerable, a carefully structured estate plan can make a considerable difference in their lives. Putting the right arrangements in place now can help ensure your legacy provides lasting support and protection for those who may need it most.

Read on to find out how to plan your estate if you have vulnerable beneficiaries.

You can use your will to appoint guardians

When planning for the future of a loved one who may be vulnerable, one of the most important decisions to make is choosing a guardian. This is the person who will step in to care for them when you die.

Although guardianship can be arranged in a separate legal document, the simplest way to do so is to name your chosen guardian in your will. This also allows you to coordinate other important arrangements, such as setting up a trust, all within the same legal document.

When selecting a guardian, it’s helpful to think about a few practical and emotional factors, such as:

  • How well they know your beneficiary
  • How close they live to a location that wouldn’t disrupt your beneficiary’s routine or care
  • If they are aware of any financial support or benefits your beneficiary is entitled to
  • How much do they understand the responsibility involved
  • Whether they are able to work alongside any trustees you’ve appointed.

Appointing a guardian is a significant decision. Taking time to talk it through with all parties involved can help ensure your beneficiary’s future is both secure and grounded in care and understanding.

Trusts can help you manage and set the conditions for asset distribution

Trusts can be an effective tool when it comes to planning how your assets will be used after you’re gone. Not only do they have potential tax benefits, but they can also allow you to set out the terms of when and how your wealth is distributed.

Rather than passing everything on in a single lump sum, a trust allows you to set specific conditions around access. For example, you might choose to release funds when a beneficiary reaches a certain age or finishes their education.

Once your assets are placed in a trust, they’re managed by a trustee who is legally obligated to act in the best interests of your beneficiaries. While the beneficiaries may receive financial support from the trust, they don’t have legal ownership of the assets until the terms you’ve set are met.

This can be especially helpful when planning for someone who may be vulnerable. With the right trust structure, you can ensure funds are available to support them, without putting their financial security at risk or overwhelming them with full access.

There are several types of trusts available, and some are designed specifically to support vulnerable individuals. A financial planner can help you understand your options and recommend the most appropriate trust for your circumstances.

A letter of wishes allows you to make specific requests regarding trusts, assets, and care

A letter of wishes is an informal way to communicate your personal hopes and preferences about how your estate is handled after your death. While it doesn’t carry legal weight like a will, it can serve as valuable guidance for guardians, trustees, and executors.

One of the biggest advantages of a letter of wishes is that it’s easy to update as your circumstances – or those of your beneficiaries – change. You don’t need to go through a formal legal process, which makes it a practical tool for outlining more personal or evolving matters.

For example, if you have a vulnerable beneficiary, you might use this document to share thoughts on their daily care, education, or medical needs. It can also reflect any preferences you have about how they’re raised, such as religious or cultural considerations.

If you’ve established a trust, the letter of wishes can provide helpful direction to your trustees, clarifying how you hope the funds will be used and under what conditions money should be released.

Ultimately, a letter of wishes is a thoughtful way to add a personal touch to your estate planning, ensuring that your values and intentions continue to guide your legacy.

Get in touch

A financial planner can help you develop a plan that’s built around your beneficiaries’ circumstances. Whether that means accounting for long-term care needs, safeguarding against financial misuse, or helping cover future education costs, they can help create a strategy that offers lasting support.

They can also assist with setting up appropriate trusts, so your assets are managed with care and released in ways that truly benefit your loved ones. With the right plan in place, you can move forward with confidence, knowing your legacy will continue to protect those who need it most.

To speak to a financial planner, get in touch.

Email info@blueskyifas.co.uk or call us on 01189 876655.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients 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, trusts, or will writing.