If you have a family member who is severely disabled you may want to consider setting up a Special Disability Trust to provide for the current and future care and accommodation needs of that family member.
A Special Disability Trust can be established either in your lifetime or through your Will.
A Special Disability Trust is created using a Model Special Disability Trust Deed which has been approved by Centrelink.
The benefits of a Special Disability Trust include:
- that family members gifting assets of up to $626,000.00 to the trust may receive an exemption from the usual gifting laws which could assist their own eligibility to Centrelink benefits; and
- the beneficiary of the trust can have assets valued up to $596,500.00 plus a residence in the Trust which are exempt from the Centrelink assets test.
A Special Disability Trust cannot be established unless the intended beneficiary meets the Centrelink eligibility test of being severely disabled either physically, intellectually, psychiatrically or as a consequence of a behavioural disability or other medical condition. The trust can only be used for limited purposes which include the reasonable accommodation for the person with the disability, the care costs arising from the disability, medical expenses, maintenance expenses of the trust assets and discretionary spending limited to $11,000.00 in any financial year.
It is important that you obtain financial advice and specialist legal advice to
- establish firstly whether a Special Disability Trust is appropriate,
- then assess the benefits of making a provision for disabled family member in a Special Disability Trust and
- finally prepare the legal documents to establish the Trust.
If you wish to discuss any aspect of Special Disability Trust we invite you to contact Jason Bell in our Adelaide office by phone, or email or by making an appointment.