There are several types of trusts. You will need to discuss your situation and circumstances with a solicitor, who will advise you on all the options available to you.
The most common types of trust are:
1. Discretionary trusts
With a discretionary trust, the trustees can decide which beneficiaries will benefit from the trust. None of the beneficiaries have an absolute right to all the money in the trust, nor the income that comes from it – they only have a potential right. The trustees may, at anytime, grant them a sum of money from the trust, if they think that it is appropriate. Throughout the year, the trustees can choose whether or not to make payments to your child with a learning disability and how much to pay. They can also choose to buy things for his or her benefit. This way, the payments can reflect your child's needs at the time.
With a discretionary trust, your child is not technically ‘entitled' to money from the trust. This means that the money or any other assets in the trust will not be taken into account when assessing whether they can receive means-tested state funding. The only thing taken into account will be the value of the payments actually made to them. In addition, because it is a discretionary trust, the assets will not be treated as part of their estate on their death for the purposes of inheritance tax.
I live on my own in my own flat. I chose it and the money in the trust fund paid for it.
2. Disabled person's trusts
This is a special type of discretionary trust that can be created for a person who is incapable of looking after their affairs or is entitled to disability living allowance at the highest or middle rate.
Under the terms of this trust, your child with a learning disability would be named as the 'primary beneficiary' of the trust, and other beneficiaries, such as your other children, would be named in a separate class of beneficiaries. The primary beneficiary will then be entitled to the income of the trust, although this should not affect their entitlement to state benefits. However, if the trustees decide to make a payment from the capital of the trust to any one of the beneficiaries of the trust, they must make the same payment to the primary beneficiary.
There are certain tax advantages to this type of trust whilst it is running but, when your child dies, the trust will be taken into account for inheritance tax purposes.