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Special needs children (of any age) are those that need extra care due to a physical or mental condition, such as a developmental disability, autism, cerebral palsy, mental retardation, or any of the dozens of other significant issues that can affect their legal capacity and autonomy.
Many parents in South Australia have children with special needs and know all too well about the extra care they require, the government benefits they rely on, and the financial challenges they face.
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Do you have a family member that can’t be trusted to responsibly deal with money?
Maybe they are too young or too old to maturely handle a substantial inheritance. Perhaps they have mental or psychological illnesses.
Perhaps they are addicted to illicit drugs, gambling or alcohol. Or maybe they’re just a fool with money, and are too impulsive to ever save or stick to a budget.
You can think of a trust as a kind of legal-container, in which assets are held safely for the benefit of one or more people. A testamentary trust is setup in a Will, which appoints one or more trustees to distribute income & capital to beneficiaries over time and with certain guidelines in place.
This offers several benefits over standard Wills. Incorporating a testamentary trust into your Will is not relevant in every situation, but our specialist Adelaide estate planning law firm can help you determine if this legal measure would be of benefit to you and your loved ones.
There are different types of testamentary trusts. A discretionary testamentary trust generally names a class of beneficiaries from which the trustee can choose to distribute, meaning that the trustee controls the assets and maintains legal protections for them until they are distributed to the end-beneficiary. Sometimes the trustee only distributes income from invested assets to one class of beneficiaries, keeping the capital distribution for a separate class of beneficiaries. In this way, the income-benefit of an asset can be given to a person, without them (or their “predators and creditors” being able to get their hands on the underlying asset.
Parents of a child with special needs face unique challenges when planning their estates, and unless they address them correctly, they risk making mistakes that could have long-term, costly consequences for their child.
For example, they may make the child ineligible for important federal government benefits once he or she becomes an adult, and they may leave their child without the financial resources he or she needs to live the same kind of life they provided when they were alive.
The mistakes that parents of a special needs child often make when they are planning their estates can have long-term negative consequences for the child and significantly impact his or her lifestyle once the parents are deceased or become incapacitated and can no longer look out for their special needs son or daughter.
Special needs beneficiaries (often children) are those that need extra care because of a disability, such as autism, cerebral palsy, mental retardation, or other physical or mental condition. Many Australian parents have children with special needs and know all too well about the extra care they require, the government benefits they rely on, and the financial challenges they face.
Many families with special needs children need to rely on Medicare and Centrelink to help with the high cost of health care. This financial support can continue throughout the child’s life. Parents and grandparents of special needs children and adults may want to provide for their disabled loved ones in their Will but they do not want to risk losing the child’s eligibility for public benefits. A Special Disability Trust is the answer.
A Special Disability Trust (sometimes called a Special Needs Trust) allows a person with a physical or mental disability to have assets held in a particular type of government-approved trust and those assets will be excluded from consideration for purposes of qualifying for certain government benefits.
Expenses that can be paid for by the trust may be such items as special medical aids & equipment, medical & dental needs, medication, accommodation, entertainment & transportation needs.
Most parents of disabled children worry about the day they won’t be around to help care for them, whatever their age. They want to help them qualify for government (state or federal) assistance for medical and other services, and also to provide for their recreation, clothing and other small luxuries that improve the disabled person’s quality of life.
The difficulty for these parents, is in trying to grapple with the too-hard decision of who will look-after their children after the parents have gone. Many cannot overcome this emotional-paralysis, and simply hope against hope they will live just slightly longer than their child, so that neither parent nor child ever have to deal with the situation.
The reality is that most disabled children outlive their parents, so providing for their care after the caregiver’s death is a vital issue. If the parent simply leaves money for the child, it could disqualify the child for government assistance, but still not provide properly for the child’s special needs.
A special needs trust may present a solution. A lawyer specialising in the legal needs of the elderly and disabled, can help the parents or other family members to set up a trust. With careful planning (both legal & financial), the assets may not be taken into account by the government when assessing the child’s entitlement to assistance, but distributions from the trust are used to provide greater comfort & independence for the child.
In this way, even after the parents have died, they can continue to care for their children. This can assist children with a variety of disabilities, including Down syndrome, autism, cerebral palsy, the aftermath of vehicle accidents, chronic diseases or anyone who may need a combination of government and private services to provide a good quality of life.
Choosing a person to care for your children is difficult. In fact, for many families, it’s the hardest part of planning their estate.
It’s not easy to think of anyone else, no matter how loving, raising your child.
The problem only gets harder if your child has a disability.
Yet, you can make a tremendous difference in your child’s life by planning ahead.
The thought of creating an estate plan can at first appear intimidating, but if you break down the process into smaller pieces, it will make it more manageable. By taking it step by step, it’s more likely that you’ll be comfortable getting started with the process.
Deciding what goes into an estate plan that fits your life and accomplishes your goals should be done with the help of a lawyer who specialises in estate planning.