Yahoo Finance Child Trust Fund: How families can access money for disabled young people
Parents who care for disabled young people will be better supported to access vital savings thanks to the launch of a new easy-to-use guide.
The toolkit has been developed with parents to fulfil a pledge to tackle barriers in accessing savings, including child trust funds.
It aims to help parents and carers better understand their rights and what they need to do under the Mental Capacity Act to manage the finances of their child – should they lose the capacity to make decisions for themselves.
The news comes in response to a government consultation published in February, which found many parents were unaware of the legal steps to be able to make financial decisions on behalf of their child as they transition into adulthood.
Funds saved in bank accounts, such as child trust funds and junior ISAs, can help families provide round-the-clock care for their child or be used to buy specialist equipment to support their needs.
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What is a child trust fund?
A child trust fund is a type of tax-free savings account given to every child born between 2002 and 2011, as a part of a government scheme to help children arrive at adulthood with savings.
The fund matures when the account holder turns 18. It is an asset, therefore, anyone wanting to access a matured child trust fund must have the proper legal authority.
What can parents and carers do?
To access these funds, parents need to apply to the Court of Protection, one-off or deputyship, or have a Lasting Power of Attorney in place.
The Court of Protection makes decisions regarding people who may lack capacity. The Court exists to protect vulnerable people who lack mental capacity and their best interests, which might include choosing trusted individuals to make decisions on their behalf.
This is an important principle designed to safeguard the funds of vulnerable people and support those with learning difficulties or disabilities to make their own decisions when they have capacity to do so.
A one-off order gives someone the legal authority to make a specific decision in the best interests of a person that lacks capacity. You may use a one-off order to access money earmarked for a specific need such as wheelchair or caring equipment, or sell a young adult’s property.
The new guide marks the first step in the Government’s pledge to raise awareness of the law to support families, providing the information they need in an easily accessible format so they can access funds quicker.
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What changes when a child transitions to adulthood at 18?
When a child in your care starts to transition to adulthood, your parental responsibility to make decisions on their behalf will start to change. New decision-making rules will start to apply, which you will need to consider before making decisions for them.
When a young person reaches the age of 16, the MCA framework will begin to apply to them. Until the age of 18, you will also retain parental responsibility to make decisions for them.
Precisely how the MCA and parental responsibility interacts can be complicated, but the best approach is for you to now proceed as if the MCA applies in all cases of decision making on behalf of your young person.
To make a decision on the behalf of someone who has turned 18, you must seek their consent and apply the principles of the MCA. If they lack the capacity to provide consent, you must obtain the relevant legal authority to make the financial decision for them.
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In particular, you will have to obtain legal authority to make financial management decisions involving another adult’s property and assets, for instance savings in a bank account. This is a principle of common law which applies even if you are the person’s:
parent (including if you have made contributions to assets or property) or
next of kin, spouse, or family member.
As a result, if a young adult lacks capacity to access their bank accounts or their own property, you must seek proper legal authority to access them on their behalf.
What happens in an emergency?
If you need to gain emergency access to the finances or property of a young adult, then you can apply for an Emergency Interim Order from the Court.
An Emergency Interim Order can give you access to an account or property in as little as 24 hours. However, the Court will determine whether the need is urgent. You can apply to make an urgent or emergency application to the Court of Protection
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What is the Mental Capacity Act
The Mental Capacity Act applies to anyone over 16 years old in England and Wales who lacks the capacity to make some or all of their own decisions.
It maintains a long-held legal principle that any adult must obtain proper legal authority to access or deal with property or finances belonging to another adult including their son or daughter.
This law is in place to empower and support adults with learning difficulties or severe disabilities to make their own decisions about their property or finances where they can.
It also serves to protect their bank accounts from fraud and abuse by individuals looking to exploit their vulnerability. In the case of Child Trust Funds putting in an application to manage a young person’s finances or supporting them to make a Lasting Power of Attorney in good time will help families access their savings quickly.
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“Parents who care for their disabled children face huge challenges every day and we understand the frustration they’ve often experienced when trying to access their savings,” Justice Minister Mike Freer said.
“Raising awareness of the Mental Capacity Act is a vital part of supporting families, so they better understand the important and necessary steps they need to take when their loved one loses capacity – easing their child’s transition into adulthood while protecting their finances from fraud.”
The government is working to speed up the application process for families, with initial results showing waiting times have reduced from 24 to eight weeks.
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