22.01.25
At Renaissance Legal, we work closely with families who have disabled or vulnerable loved ones to help secure their future through careful planning and trusted legal advice. Recent news that some banks are scrapping trust accounts has understandably caused significant concern for families who use them as part of the smooth running of a Trust for the benefit and security of their family member. Charities and advocacy groups have expressed dismay, highlighting the challenges this decision could pose to those who are already navigating complex financial and legal landscapes – and dealing with numerous other challenges in their everyday lives.
This change could have a profound impact on the operation of Disabled Person’s Trusts (DPTs)—a vital mechanism that many families use to provide financial stability for loved ones with disabilities and/or additional needs. By way of an update for our clients and followers, below we explore the issue and what it means for those affected.
What Are Trust Accounts and Why Are They Important?
Trust Accounts are bank accounts used to hold and manage funds on behalf of a Trust. In the case of a Disabled Person’s Trust, where families set aside money for a beneficiary in a way that protects their eligibility for means-tested benefits while ensuring their needs are met, a Trust Account is used by the Trustees to pay for anything the beneficiary may require.
For many families, Trust Accounts are much more than a banking product—they are an essential mechanism for accessing money responsively to meet the needs of the beneficiary. In essence, they are part of the plans families have put in place to achieve peace of mind, security and to safeguard their loved ones’ future. Without them, managing the financial affairs of a Trust can become unnecessarily complicated and burdensome, often requiring professional help at additional cost.
What Is Changing?
As reported in numerous news outlets, including this piece in The Guardian, some high street banks have begun phasing out Trust accounts stating declining demand and operational challenges. However, charities and legal experts – in a view shared by myself and our own expert team – argue that this decision disproportionately affects disabled people and their families, for whom Trust Accounts are not simply a convenience but a necessity.
Without access to Trust Accounts, Trustees may be forced to hold or manage funds through other financial products, which can lead to issues such as:
- Administrative headaches: Trustees face complex record-keeping and may need to juggle multiple accounts to meet their obligations.
- Increased risk: Using accounts not specifically designed for Trusts can lead to errors or complications, potentially putting the Trust at legal or financial risk.
- Delays: It may take longer for Trustees to access funds and make payments out.
- Higher costs: Families may need to rely on costly professional management services to ensure compliance and proper account handling.
The Role of Disabled Person’s Trusts
Disabled Person’s Trusts play an important role in financial planning for individuals with disabilities. They allow families to set aside assets in a way that does not affect the beneficiary’s eligibility for means-tested benefits. By creating a DPT, families can ensure that their loved one has access to funds for additional needs, like specialist equipment, therapies, or leisure activities, experiences and holidays, while still receiving essential support via benefits. Trust Accounts are an integral part of managing these Trusts effectively, providing a dedicated and secure place for funds to be held and accessed by Trustees.
How We are Supporting Families
At Renaissance Legal, we understand the frustration and anxiety this change may cause for families who are already managing significant responsibilities. As legal specialists in supporting disabled and vulnerable individuals, we are keenly aware of the practical challenges this poses to Trustees and beneficiaries alike.
We want to reassure our clients and the wider learning-disabled community that we are closely monitoring this issue and support any push for a solution that ensures families have access to appropriate banking services for managing Trusts.
What Can Families Do?
If you are concerned about how this change might affect your Trust or financial arrangements, here are some steps to consider
- Review your Trust arrangements: Speak to your solicitor or legal advisor to understand how the changes may impact your specific circumstances.
- Engage with your bank: Ask your current bank for clarification on their position and whether they offer any alternative solutions.
- Seek expert advice: A financial advisor is likely to be best placed to guide you through this uncertainty, offering practical advice on appropriate financial products to help manage the Trust.
How can we help?
If you have any questions about Disabled Person’s Trusts, or would like to discuss your Trust arrangements, please get in touch. We’re here to support you and help secure the best possible future for your loved ones.
I am currently trying to set up a Discretionary Trust for my son and finding it impossible to locate a bank which will do so.
What do you suggest I do please??
Thank you for your comment Arlette. As we outlined in the piece, we are in the same position as families in that there is no current solution and we understand the frustration that many families will be experiencing. A financial advisor is likely to be best placed to guide you through this uncertainty, as they can offer practical advice on appropriate financial products to help manage the Trust.
Sorry but I can’t see a solution to resolve this problem?
What do disability trusts in excess of £25,000 do, as it would appear that it is only the Metro Bank who provide accounts up to£25,000?
Also, do not Renaissance provide any help, guidance or financial advice regarding the setting up and management of a disability trust or is your service simply, the drawing up of a generic legal document which is not specific to the individual?
Finally, where does this leave the disability trust itself and it’s management/servicing of the trust?
Thank you for your questions, Louise. As solicitors, we can provide guidance on setting up a Disabled Person’s Trust. Our sister company, Renaissance Trust can support families to create the right Trust and assist with the administration. There are other options for the Trustees in terms of investment and it isn’t necessary for all of the assets to be held in a Trustee bank account. We discuss all of this when we meet with clients. If you would like to contact us about your personal circumstances we’d be really happy to help and explore your options.
We want to set up a Disabled Person’s Trust for our Disabled daughter who currently lives with us.
Banks we’ve contacted have each stated they no longer offer these Trusts apart from Skipton who ‘suggest’ a minimum initial deposit of £100k !!
Mencap Trust will only set one up if they are the sole Trustees whereas our two sons are happy to be the Trustees if we pass on. PLEASE help.
Hello John, thank you for your comment. We can assist with the creation of a Disabled Person’s Trust for your daughter, and help you explore more about the choice of Trustees and the administration of the Trust. However, we are unable to provide any advice on the banks as we aren’t qualified or regulated to give financial advice.
We have arranged for a member of our team to contact you directly for an informal discussion about your circumstances and to answer any initial questions you may have.
Hi Katherine
my wife and I set up a pilot discretionary trust some years ago. This is primarily aimed at looking after our disabled but my daughter will also paryially benefit as she will be coordinating care when we die.
I have banked with Barclays for 60 years but they will not provide a trust bank account and neither will anybody else except Cater Allen and Metro bank. Both get poor reviews so I am still looking for a solution. Have you discovered any other sources of trust accounts? BSocs will but they only pay out to beneficiaries so no use for running a trust.
Dear John, thank you for your question. A member of our team will reach out to you directly about this as we are not able to advise or recommend on particular banks/providers. Regards