What is a Special Disability Trust?
A Special Disability Trust is a trust for a beneficiary who has a severe disability. It can be created in your Will or set up during your lifetime. Special Disability Trusts provide for the current and future care and accommodation needs of a family member.
The trust is not limited to beneficiaries under the age of 18 – it extends to any beneficiary with a severe disability that precludes them from managing their own affairs.
It is a way of setting up financial security for your loved one with a disability once you are no longer here to do that for them.
A Special Disability Trust can only be used for limited purposes, which include:
- reasonable accommodation for the person with the disability;
- care costs arising from the disability;
- medical expenses (including health insurance);
- maintenance expenses on the trust assets;
- discretionary spending as set by the law.
Essentially this means that funds can be set aside to support your beneficiaries needs.
What are the benefits of a Special Disability Trust?
The benefits of a Special Disability Trust include:
- Peace of mind knowing that your beneficiary will be taken care of financially;
- Family members gifting assets up to $500,000 to the Trust may receive an exemption from the usual gifting rules which could assist their own eligibility to social security benefits;
- Up to $862,750 (from 1 July 2026, indexed each year on 1 July) in assets can be held in trust without affecting social security benefits.
For more information about Special Disability Trusts or to appoint one today, contact the team of Penrith Estate Lawyers at ALA Law (formerly Amanda Little) today.
