How to protect and look after a vulnerable beneficiary

When acting as an executor, it’s essential to prioritise the welfare and best interests of vulnerable beneficiaries. A vulnerable beneficiary may be unable to manage their inheritance independently.

What is a vulnerable beneficiary?

A beneficiary is often classed as “vulnerable” if they require additional support to manage their health, wellbeing, or finances. Perhaps they are facing an uncertain situation, such as a divorce, and would benefit from some additional support. A vulnerable person could fall into one or more of the following categories:

  • Minors (aged under 18 years)
  • Someone with physical or mental disabilities
  • Someone with diminishing mental capacity
  • Someone facing divorce or dissolution proceedings
  • Someone facing bankruptcy proceedings, or facing other financial difficulties

Why is it important to know if a beneficiary is “vulnerable”?

Finding out if any beneficiary in an estate which you are administering is important. It will help you to understand how best to manage the inheritance due to that beneficiary. You will also be able to help in protecting their interests, whether you are an executor or a trustee.

How can I protect a vulnerable person?

Check the Will

Read the Will again to check if there is mention of a trust for the beneficiary. This may be either a discretionary trust, or a vulnerable persons trust. These types of trust are sometimes referred to as a disabled persons trust or a disabled beneficiary trust.

Certain trusts allow trustees to manage inheritances for vulnerable individuals, helping them handle finances better. Trusts can also maximise eligibility for government support and benefits.

Appoint a guardian or trustee

Ensuring that the needs of a vulnerable beneficiary may require you to consider appointing a trustee or guardian to oversee the management of their affairs. This could include looking after their finances, making decisions on their behalf regarding the distribution of monies and proper investment.

Powers of Attorney

Find out if the beneficiary has a Lasting or Enduring Power of Attorney in place, and whether the power of attorney covers their property and financial affairs and/or their health and welfare decisions.

Having a power of attorney in place means that you can communicate with the beneficiary’s attorney on their behalf, and make arrangements for paying any monies to them from the estate.

Monitor welfare and financial needs

Depending on the particular needs of a vulnerable beneficiary, you or their appointed attorney or guardian should assess what additional help they require in order to best manage their expected inheritance.

For instance, a vulnerable person may benefit from regular home visits to check that they have the appropriate equipment and care resources available at home. You should also consider what funds they may require for their living arrangements, medical needs, education or work needs.

You should also carry out a review of their finances, to ensure that they have sufficient financial provision, particularly if they are a beneficiary of a trust. A vulnerable beneficiary may either have need for periodic lump sums of money, or to receive smaller and more regular payments to help with their day-to-day life.

Seek professional advice

As always, if you are in any doubt as to how best to support a vulnerable beneficiary, you should seek professional legal advice from a lawyer, and also from any professional carer or social worker already helping the vulnerable beneficiary.

Signposting to other support networks

As well as your support during the estate administration, a vulnerable beneficiary will likely benefit from additional support if they do not already have this.

Support can come in various forms, whether it be a caregiver, social worker or other professionals.

Search our Probate Directory for organisations such as Citizens Advice Bureau (CAB) who can help with financial support and advice, and advice regarding housing, welfare and community support.