Article of Interest on Wills & Estates

YOUR WILL AND THE DISABLED CHILD 

Parents with disabled children are highly motivated and focussed. They have come to expect professionals to respond to the individual needs of their children. Quite rightly, they expect skill and care from legal advisers in relation to the care of their children after they have passed on. Wills must contain structures to meet the individual needs of the child.

If the Lawyer is to draft an appropriate structure in a Will for the care of a disabled child, then that Lawyer must have the ability to understand the actual disability and the needs of that child.

There are various structures available. However, not each structure suits the needs of each child and one size does not fit all.

Mary is 22 years of age and a quadriplegic. She is unable to live independently and unable to work. Peter has been diagnosed with schizophrenia and suffers periodic psychotic episodes. He is unable to hold down a job. Jane is 32 years of age and has a serious gambling and alcohol problem. She works from time to time but is unable to hold down a job.

A special disability trust is a structure which can be created in a Will granting concessions as to how the asset test is applied for Centrelink purposes for those with a severe disability. However the requirements to qualify for the benefits are stringent.

A disability sufficient to warrant a disability support pension may not qualify the child for the benefits of a special disability trust . It is critical for the Will maker to understand the requirements and the restrictions of a special disability trust before attempting to establish this type of trust in the Will for the benefit of the disabled child.

An overview of our examples may see concessions flow for Mary from a special disability trust, but no concessions for Peter or Jane.

If the child does not qualify for the benefits of a special disability trust then other structures need to be considered. Options can include life insurance policies, superannuation directions and nominations, protective trusts and outright gifts.

A combination of all of the other options, or some of the options, can create an appropriate plan which caters for the individual needs of the disabled child.

Even if the child qualifies for the benefits of a special disability trust , a combination of structures should be considered to cater for the best interests of the child.

This type of estate plan takes particular skill and care.

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