Vulnerable Person Trusts (VPTs) – Protecting Vulnerable Loved Ones

Last verified: 14 November 2025 (England & Wales)

Imagine knowing your vulnerable or disabled loved one will always be supported, without worrying that an inheritance will be misused, reduce their benefits or fall into the wrong hands.

A Vulnerable Person Trust is designed for precisely that: it ring-fences money for someone who cannot safely manage it themselves, while trusted people make calm, sensible decisions on their behalf.

A Vulnerable Person Trust protects your loved one, protects the funds and helps protect vital benefits.

Also sometimes called a “Disabled Person’s Trust”
Where the beneficiary meets the legal disability criteria, the trust can qualify for special tax treatment. For simplicity, we use “VPT” throughout.

Quick-read summary: A Vulnerable Person Trust (VPT):

Holds money and assets for the long-term benefit of a vulnerable or disabled person.
Enables trustees to pay for housing, care, day-to-day needs and quality-of-life extras without handing over complete control.
Can help preserve means-tested benefits by keeping funds outside the beneficiary’s direct ownership.
May qualify for favourable tax treatment if the legal conditions and elections are met.
It is usually written into your Will, so it only comes into effect when money actually passes in

A VPT is a way of saying “yes, they are included” without putting them or their benefits at risk.

Practical checklist

Use this as a sense-check when considering a VPT:

Identify who the vulnerable or disabled beneficiary is and what support they need now and in the future.
Decide who should act as trustees – people who understand the beneficiary and can make careful decisions.
Agree who else (for example, siblings) should be back-up beneficiaries in the very long term.
Ask your adviser to include a VPT in your Wills, rather than leaving assets to the vulnerable person outright.
Prepare a clear Letter of Wishes to guide trustees on priorities, spending and any worries you have.
Keep evidence of disability and benefit status so specialist advisers can claim any available tax treatment.
Plan to review your Will and Letter of Wishes regularly, especially if benefits or circumstances change.

A quick example

A couple have an adult son who cannot manage finances safely. They want him protected, but they do not want his inheritance to disrupt his support package or become vulnerable to misuse. Instead of a direct gift or disinheriting him entirely, they use a VPT in their Wills so that:

His share goes into the trust on the first death.
Trustees pay for accommodation, care, daily needs and extras.
His means-tested benefits are less likely to be disturbed because he never owns the funds outright.

The trust protects him, protects the money and helps protect his benefits.

How a VPT works

Funds are paid into the trust (usually through your Will). Trustees then hold and manage those funds for the benefit of the vulnerable person.

Support can often be given without handing over cash directly, for example:

Paying rent, care or support costs.
Paying utility bills or services straight to the provider.
Using controlled spending methods (for example, vouchers or pre-paid cards).
Funding therapies, equipment, holidays, social activities or independence support.

The trust exists to protect the vulnerable person, not to restrict them. It should make life easier, not limited.

Who can be a trustee?

Choose people who:

Understand the beneficiary’s needs and challenges.
Can act responsibly with money.
Are strong enough to say “no” when something is not in the beneficiary’s best interests.
Can work together and stay objective.

Often this includes siblings or close relatives. Professional support can be added where the estate is larger or the situation is more complex.

A Letter of Wishes should sit alongside your Will to guide trustees on:

What “good support” looks like for your loved one.
How you want the trust used in everyday life.
Any worries you have about particular people, habits or risks.

Although it is not legally binding, it provides valuable guidance.

Testamentary first (recommended)

Most families include a VPT in their Wills, rather than setting it up in lifetime:

The trust only springs into life when assets actually pass into it, usually on the first death.
There is no extra trust administration or HMRC registration while everyone is alive.
Costs are kept proportionate to the size of the fund.

In many cases, a Wil-based VPT is the simplest, most cost-effective way to secure long-term support.

Lifetime versions do exist, for example, if a significant gift is needed during your lifetime, but they need specialist drafting and earlier Trust Registration Service duties. Where that structure is appropriate, Fern Wills & LPAs will introduce you to trusted specialist support – there is no need to find advisers alone.

Long-term structure

Typically:

The vulnerable person is the primary beneficiary for life.
Other family members (for example, siblings) are named as back-up discretionary beneficiaries with strict limits on what they can receive while the vulnerable person is alive.
If you have more than one vulnerable child, each will often have their own VPT so that support can be tailored.
After the vulnerable person dies, the trust usually ends, and any remaining funds pass to the rest of the family or into another structure if appropriate.

Benefit protection

A direct inheritance can cause problems:

Means-tested benefits or local-authority support may be reduced if the beneficiary suddenly owns a lump sum.
They may be pressured to share or spend the money in ways that do not help them.

A VPT can help avoid benefit disruption by:

Keeping funds outside the beneficiary’s direct control.
Allowing trustees to pay for things the person needs rather than handing over the cash.

Who qualifies

A person may be treated as “vulnerable” or “disabled” for trust tax rules if they:

Cannot safely manage finances long-term, or
Receive certain disability-related benefits, or
Meet statutory definitions in section 89 Inheritance Tax Act 1984 and related legislation.

In practice:

We talk through your family’s situation.
We look at existing diagnoses and benefits.
If specialist elections or reporting are needed, we involve appropriate tax and legal professionals.

Tax overview

If the legal criteria are met and the correct elections are filed, a VPT can receive special tax treatment for Inheritance Tax, Income Tax, and Capital Gains Tax. If criteria are not met, standard Discretionary Trust rules usually apply.

You do not have to navigate this alone. When the time comes, Fern Wills & LPAs can coordinate introductions to trusted specialists to ensure elections and reporting are handled correctly.

What does this give your family?

Protection for someone who cannot manage money safely.
Stability and transparent decision-making.
Controlled, dignified support rather than drip-fed pocket money.
A structure that can adapt as needs and benefits change.
Peace of mind that your wishes will continue long after you are gone.

A Vulnerable Person Trust lets you secure your loved one’s future without putting their benefits, safety or independence at risk.

Cases

Case 1 – Adult son with learning difficulties
Mark and Helen have a 28-year-old son, Daniel, who has learning difficulties and receives means-tested support. Instead of leaving money to him outright, their Wills send his share into a VPT. Trustees cover the costs of extras for supported housing, including clubs, travel, and holidays. Daniel’s core benefits continue, and his quality of life improves.

Case 2 – Daughter with fluctuating mental health
A single mother worries about her adult daughter, who experiences periods of good stability followed by severe mental-health relapses. A VPT allows trustees to fund counselling, rent, and debt clearance when needed, without providing a lump sum that could be misused during a crisis.

Case 3 – Siblings as trustees
Grandparents leave part of their estate in a VPT for their autistic grandson. His two older sisters act as trustees with professional backup. They use the fund to pay for specialist education, sensory equipment and respite breaks for the whole family. The trust keeps everything transparent, fair and focused on their brother’s needs.

Ethical and governance note

For ethical and governance reasons, Fern Wills & LPAs does not take trustee appointments or create standalone lifetime trusts. However, Fern Wills & LPAs do create trusts that arise on death within Wills. Where a trust needs to be operated or registered, we will introduce you to an appropriate specialist to act and administer the trust. You remain free to choose your own adviser.

Next steps

This article gives an overview. A detailed Technical Guide, including legislative criteria, trustee duties, tax elections, and advanced notes, is available as a separate resource.

If you support a vulnerable or disabled loved one and want to protect their future:

We can discuss whether a Vulnerable Person Trust is suitable.
We can compare it with simpler or more flexible alternatives.
We can work alongside your existing professionals where needed.

Talking it through will help you decide how best to provide long-term security without putting your loved one, or their benefits, at risk.