Gifts, inheritances and the kindness that can backfire

I will admit that of everything in SEND financial planning, this is the topic I have found hardest to raise out loud. The technical side is straightforward enough to explain. Telling somebody that the money they intend to leave your child could actively harm them is a different sort of sentence to get out.

So let me put the mechanism down plainly first, because once you see it, the awkwardness becomes much easier to accept as the price of avoiding real damage.

A grandparent or a relative wants to provide for a disabled child. They leave money in their will, or they give it during their lifetime. The motivation is love and nothing else. Done the obvious way, that gift can reduce or remove the means tested support the child depends on, so that generosity displaces help rather than adding to it.

It is one of the cruellest quirks in this area, because it turns kindness against its own purpose.

The mechanism is the same one that makes a standard will risky for a disabled child. A great deal of the support a disabled person relies on is means tested, which is to say assessed against their capital and their income. Money received directly increases their capital. Increased capital can push them past thresholds, and past a threshold, support reduces or stops.

So a relative who leaves a sum directly to the child, meaning to improve their life, can accidentally dismantle part of the arrangement already supporting it. The net benefit ends up far smaller than intended. The disruption to carefully assembled support can be considerable, and unpicking it afterwards is not a matter of handing the money back and carrying on as before.

Note what has gone wrong here, because it matters for how you talk about it. Nothing about the giving was wrong. The problem is entirely in how it was given.

That distinction is the whole of the conversation you are about to have.

The conversation families avoid

Preventing this comes down to communication, and specifically to a conversation with the relatives who may be planning to provide for your child.

Almost nobody wants to have it. Money and inheritance are sensitive at the best of times, and there is something that feels close to grasping about discussing the contents of somebody else’s will, particularly when that somebody is your parent or your aunt and the subject is what happens after they die. Add the general British discomfort with talking about money at all and you have a conversation that gets postponed indefinitely.

Have it anyway.

Here is the thing that makes it easier than you expect. Relatives want the gift to help. That is the entire point of the gift. Told that the obvious route could do the opposite, most of them are not offended. They are horrified, and then they are grateful somebody said something before it was too late to change anything.

The discomfort of raising it lasts an afternoon. The consequences of not raising it can run for years, and they land on your child rather than on you.

It helps to frame it as information rather than instruction. You are not telling anybody what to do with their money. You are telling them that there is a technicality in the benefits system which means a direct gift may not reach your child in the way they imagine, and that there is a straightforward alternative. Most people take that well. The ones who do not usually need a little time rather than a better argument.

If saying it aloud is too much, write it down. A short letter or an email to the relatives most likely to be affected, explaining the position once, calmly, in your own words, does the job and spares everybody the moment of eye contact. It also means the information survives being half remembered.

It also helps to raise it early, while nobody is ill and no will is being redrafted. A conversation about inheritance held in a hospital corridor is a conversation nobody will remember accurately afterwards.

And do not restrict it to wills. Lifetime gifts count too. The relative who quietly puts money aside each year, or who wants to hand over a lump sum for a birthday or a milestone, is doing something with exactly the same effect and usually with even less awareness of it.

Directing generosity safely

The usual answer is to direct the generosity into an appropriate structure rather than to the child.

Where a disabled person’s trust exists, or can be established, relatives can leave money to the trust instead of to the child directly. The funds are then held for your child’s benefit without counting as their personal capital, so the existing support is preserved and the gift genuinely adds to their quality of life rather than substituting for something they already had.

Which means relatives need to know to leave the money to the trust and not to the child. That is the whole ask, and it is why the conversation matters so much. A relative who updates their will to leave a bequest to the trust rather than to the child has provided for them exactly as they intended, without any of the unintended consequences. The structure turns a risky gift into a safe one, and the wording involved is not complicated for a solicitor who knows what they are being asked to do.

Say that last part to relatives too. People worry they are being asked to take on something elaborate. They are being asked to change a name.

This points at a broader principle, which is that in SEND families it is worth thinking about the extended family’s arrangements as they affect the child, not only the parents’ arrangements. Grandparents’ wills, relatives’ intentions, lifetime gifts and the occasional unexpected legacy can all touch the child’s support, and all of them benefit from being pointed the same way.

That is not the same as controlling anybody’s decisions, which is neither possible nor any of your business. It is making sure that those who wish to provide for your child have the information to do it effectively. A family whose generosity is coordinated and well informed can provide for a disabled member far more effectively than one where kind gifts keep arriving in forms that quietly undermine the structure holding everything up.

There is one more group worth including, and it is the one families forget. Godparents, family friends, the neighbour who has known your child since they were small. People outside the bloodline leave money too, and they are the least likely of anybody to have been told how any of this works.

None of this is an argument against generosity. It is a precious thing, and disabled children benefit enormously from a family that wants to provide for them. It is an argument for aiming it properly.

So have the awkward conversation. Make sure relatives know the trust exists and know to give to it. Coordinate the plans across the family, and revisit it when wills get rewritten, which people do more often than they admit.

A personal aside to finish. In most families, including mine, generosity does not arrive as a carefully structured bequest. It arrives as cash in a birthday card, pressed into a hand, slightly furtively, by somebody who does not want a fuss made about it. There is a great deal of love in that gesture and I would not want to sterilise it.

The point is only that the larger version of the same instinct, the one written into a will years in advance, deserves five minutes of thought that the birthday card does not. Give it those five minutes. Then let people be kind.

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Wills and trusts are not regulated by the Financial Conduct Authority. The writing of a Will involves the referral to a service that is separate and distinct from the services offered by St. James's Place.

This article is general information drawn from professional and personal experience, not legal or financial advice. Gifts, inheritances and trusts interact with means tested support in complicated ways, so take specialist advice before anything is written down.

Legacy Capital Management is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website at www.sjp.co.uk/products.

The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.

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SJP Approved 30/07/2026