Special Disability Trusts provide a very good way to provide for the long-term care and living needs of someone with a severe disability by controlling assets for their benefit. A Special Disability Trust can be created by your Will or by Deed whilst you are alive.
To be eligible to be a beneficiary of a Special Disability Trust, the disabled person must meet the definition of ‘severe disability’ under section 1209M of the Social Security Act 1991.
Accordingly, 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’.
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 your Will or Deed, 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 in order to comply with changes which came into effect on that date.
For more information, please contact our friendly and professional team at Peter Speakman & Co on 9822 8611. Subscribe to our email updates to be notified when we post new contact, and receive other updates via email.