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Estate planning to cater for people with a disability

11 Sep 2015

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  • Wills & Estates

Having regard to general disability issues in your estate plan

As a parent, relative or carer you may have deep concerns about the future welfare of your child or dependent with special needs.

Making provision for a child or dependent through a standard Will and appointing a guardian therein may not provide peace of mind to the will-maker with respect to ensuring that a beneficiary with special needs will be sufficiently taken care of after they are no longer around.

At Snedden Hall & Gallop Lawyers, we can help alleviate your ‘concerns beyond the grave’ by advising you about the various options available for ensuring the ongoing care and maintenance of your dependent with additional needs. We understand that there is no ‘one size fits all’ approach to estate planning, especially when there is a person with a disability involved. The nature of the disability and the extent of the needs of the person are determinative factors to be taken into account when tailoring an estate plan to suit the individual.

Before you seek legal advice

We recommend that you do the following before you seek legal advice from one of our estate planning solicitors:

  1. Turn your mind to the unique support needs required by your dependant based on their level of need and individual circumstances.
  2. Develop a ‘vision for the future’ by jotting down some important features of the type of legacy you wish to leave.
    For example, it may be that your dependant’s disability does not affect their capacity to handle their own finances so you may wish for them to have flexibility in regards to how they access their inheritance. Alternatively, you might decide that assistance with managing their inheritance is required; and so placing restrictions on how they access their inheritance might be more appropriate. In the latter circumstance, it is important to consider who may be the appropriate person to perhaps act as trustee to manage the inheritance.
  3. Compile a detailed list of the behavioural patterns and idiosyncrasies that you have learned about the person in your experience in caring for them, and make notes about the supportive measures that you have put in place that have proven to be successful in accommodating their needs.

Leaving a set of instructions as to what ‘just works’ when dealing with the person can be a saving grace to someone that has been entrusted to take over their guardianship.

Special Disability Trust

Our team is experienced in preparing wills with Special Disability Trusts (SDT) for our clients who are seeking to provide a sustainable future for beneficiaries with special needs. An SDT is a protective trust that can be established through your Will to take effect when you die. For some people, this may be an attractive vehicle for facilitating security and financial wellbeing in an otherwise uncertain context.

In short, where eligible, an SDT is a protective trust that can be created to assist families and carers by providing for the future support, accommodation and medical needs of persons with disabilities, so long as it complies with the formal requirements of social security legislation.

The eligibility of the person with special needs for income support from the Department of Human Services will determine whether an SDT is an available option with respect to your estate plan.

A major advantage of this structure is that a beneficiary under an SDT may well be able to retain all or a large portion of their Disability Support pension, while continuing to receive support from the assets in the SDT towards the expenses of appropriate care, accommodation and medical treatment.

Generally speaking:-

  • Income from the SDT trust will be disregarded for the purpose of the application of the income test in determining the beneficiary’s entitlement to social security benefits;
  • Where the money held in trust is applied to the care, accommodation and medical treatment, it will not be counted toward their income for Centrelink’s purposes.
  • Assets that are held in the SDT and which are assessed as falling below the threshold test (currently set at $626,000) will not count towards the asset test for the purpose of determining the beneficiary’s eligibility for a social security benefit.
  • The principal place of residence of the beneficiary is not deemed an ‘assessable asset’, which, in practical terms, means that the beneficiary can have assessable assets up to $626K plus the home before the assets are included in the assets test.

To discuss the benefits of a Special Disability Trust further, or any other available options for providing for your loved ones, please contact our Wills and Estate specialists.