Special Disability Trust:

If a loved one or family member has a special disability you may want to consider establishing a Special Disability Trust to plan for the future care, medical and living needs of that person. There are many benefits, including tax concessions and gifting concessions that make this trust particularly attractive. It is highly recommended that you consult a financial adviser or Asset Protection and Trusts Lawyer for advice before establishing a Special Disability Trust.

The purpose of a Special Disability Trust is to establish a vehicle to hold funds, through gifts and contributions, which can be made at any time by almost anyone, to meet the reasonable care and accommodation needs of the principal beneficiary. The trustee is permitted to pay for the beneficiary’s dental and medical expenses, including membership costs for private health funds, pay the maintenance expenses of the trust property assets, and spend on discretionary items not related to the care and accommodation needs of the beneficiary. A qualified Asset Protection and Trusts Lawyer may have regard to your circumstances and advise you of devising and implementing a Special Disability Trust.

There are various features and benefits of using a Special Disability Trust. Firstly, there is a gifting concession of up to $500,000 combined for eligible family members of the principal beneficiary. Also, an assets test assessment exemption of up to $596,500 (indexed each year) is available to the principal beneficiary. Immediate family members of the principal beneficiary who are of age or of service-pension age or more and are receiving a pension (for example, Age Pension or Carer Payment) are eligible for the gifting concession. If there is more than one contributor to the trust, the combined concession first applies to those eligible family members who are receiving a pension after reaching age or service pension age. Immediate family members include: natural parents, legal guardians (as defined), adoptive parents, step parents, grandparents and siblings. In addition, contributions or gifts of assets to any value can be made to this type of trust at any time by almost anyone. Obtaining sound legal advice from a supportive and understanding Asset Protection & Trusts Lawyer may ensure you establish and maintain a Special Disability Trust in a legally-compliant manner.

There are various legal requirements that need to be fulfilled to establish a Special Disability Trust. Firstly, the principal beneficiary must meet the eligibility criteria for Special Disability. Then the trust deed must contain required clauses stipulated by the law. Also, there are investment restrictions, reporting and audit requirements. Obtaining proper legal advice from an Asset Protection and Trusts Lawyer may be hugely beneficial to ensure these obligations are met.

If you need further legal advice on your Special Disability Trust matter, you may book an appointment with us by telephone on (02) 9233 4048 or by email to info@navado.com.au. 

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.