Thinking about a Will can be difficult for anyone but it can be particularly challenging when your family includes someone living with a disability. That person's support needs are likely to be significantly different from other family members and require special consideration. These issues are particularly acute in regional areas like Busselton and Margaret River where access to housing and and other services (like therapies) can be difficult. In response to these challenges there are a range of possibilities including the use of a Special Disability Trust.
A Special Disability Trust is a unique structure which can, in an appropriate case, allow someone to secure a part of their estate for the sole benefit of a disabled beneficiary. The primary purpose of the trust is to provide for care and accommodation needs. The trust can own property or pay rent, purchase therapeutic equipment and pay caring staff. The trust is also permitted an annual withdrawal (the amount of which is indexed annually) to meet the beneficiary's other needs and desires.
Crucially, the trust can own the a home as well as assets up to a certain value (currently $813,000) without impacting the beneficiary's disability support pension. This is a significantly greater amount than that currently permitted under the normal asset test. There are also favourable tax rules for income earned by the trust. As a result, when used correctly, a Special Disability Trust can see somebody receive a home, an asset base sufficient to meet their caring needs and ensure they still receive their pension.
It’s worth also considering some of the disadvantages. This trust rules are quite rigid in terms of how the assets can be used and applied. The beneficiary needs to satisfy an initial test to confirm they're an appropriate subject of a Special Disability Trust. Also, the trust is subject to ongoing audit and review.
There are other options, including the use of general discretionary trusts, bare trusts, or life interests (with respect to property). If you need a bespoke estate plan to include someone living with a disability please contact us. We'd be happy to have a discussion about all of the options open to you including use of a Special Disability Trust. Please get in touch on 0474 112 316.
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