Special Disability Trusts provide an exceptionally good way to provide for the long-term care and living needs of someone with a severe disability by controlling assets for the disabled person’s benefit. You can create a Special Disability Trust by Deed whilst you are still alive, or pursuant to your Will.
A disabled person must meet the definition of ‘severe disability’ under section 1209M of the Social Security Act 1991 to be eligible to be a beneficiary of a Special Disability Trust.
Before establishing a Special Disability Trust it is important to seek verification from either the Department of Human Services or the Department of Veterans’ Affairs that the person for whom the trust is being established meets the definition of ‘severe disability’ before establishing a Special Disability Trust.
Special Disability Trusts must be used to provide for the principal beneficiary’s accommodation and care needs.
The benefits of a Special Disability Trust include:
- asset and income exemptions up to specified limits for Centrelink purposes for the principal beneficiary;
- gifting concessions up to a specified limit for eligible family members of the principal beneficiary; and
- beneficial tax measures.
Whether created by Deed or Will, Special Disability Trust Deeds must comply with the requirements of the special disability trust legislation. Deeds created before 1 July 2011 need to be varied to comply with changes which came into effect on that date.
Please contact Fleur Craig of Armour-Craig Legal to discuss.