Family is at the heart of everything. When a family member has a severe disability, ensuring their well-being and future care becomes paramount. A Special Disability Trust (SDT) can be a vital tool in building that foundation of care and support. At Foye Legal, we provide sensitive and practical legal advice to help you navigate this important process.
A Special Disability Trust (SDT) is a legal structure designed to support the future care and accommodation needs of individuals with severe disabilities. These trusts are typically established by parents or immediate family members to ensure long-term care and provide peace of mind.
SDTs offer significant advantages, including:
However, specific criteria and legal rules must be followed to successfully establish and qualify for an SDT.
To be eligible, the beneficiary must meet the definition of having a “severe disability,” as outlined in the relevant legislation. This includes specific criteria, and there are three definitions under which an individual may qualify.
Yes, children under the age of 16 may qualify as beneficiaries of an SDT. However, special rules apply to setting up these trusts for minors, so it’s important to seek professional advice.
The primary purpose of an SDT is to provide for the reasonable care and accommodation needs of the beneficiary. Allowable expenses include:
Additionally, SDTs allow for up to $13,000 annually (indexed each July) to be used for discretionary items, providing flexibility for the beneficiary’s needs.
Trustees must adhere to strict rules regarding what qualifies as “reasonable care and accommodation needs.”
To qualify as a valid SDT, the trust must:
The trustee’s responsibilities include:
Special Disability Trusts are created using formal legal deeds, usually prepared by experienced lawyers. These deeds take effect immediately upon establishment.
Alternatively, an SDT can be incorporated into your will. In this case, the SDT is activated upon your death, and the specified share of your estate is transferred into the trust to benefit the disabled individual.
Special Disability Trusts are complex and require careful planning to ensure compliance with all legal requirements. At Foye Legal, our experienced team can guide you through the process, helping you provide for your loved ones with disabilities while maximising the benefits available under the law.
Seeking legal assistance early gives you control over your situation, helping you avoid complications and manage costs effectively. This guide provides practical tips, checklists, and key insights to help you confidently navigate legal processes to secure the best possible outcome.
Your first consultation is vital in safeguarding your interests and laying the foundation for the best possible outcome. At Foye Legal, we value the trust you place in us and are committed to providing clarity, strategy and unwavering support from day one.
A Special Disability Trust (SDT) is a specific type of trust established to provide for the care and accommodation needs of a person with a severe disability.
The primary beneficiary must meet the eligibility criteria for a disability support pension or receive a similar level of support, and the trust is designed to manage assets for their benefit while potentially offering certain social security concessions to the donor(s).
A range of assets, including cash, shares, and property, can be held within an SDT.
The trust funds can be used to pay for the reasonable care, accommodation, and other needs of the principal beneficiary, such as medical expenses, therapies, personal care, and maintaining their quality of life. There are specific rules around how the funds can be used to ensure the primary benefit is for the person with the disability.
One of the key benefits of gifting assets to an SDT in Australia is the potential for the gifted amount to be exempt from the gifting rules that can affect a person’s social security entitlements.
There are limits to the exempt amount, and specific conditions apply to both the donor and the trust to qualify for these concessions, making it important to seek expert legal and financial advice when considering establishing an SDT.
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3/1 MEMORIAL DRIVE SHELLHARBOUR CITY NSW 2529
LEVEL 3, 63 MARKET STREET WOLLONGONG NSW 2500
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3/1 MEMORIAL DRIVE SHELLHARBOUR CITY NSW 2529
LEVEL 3, 63 MARKET STREET WOLLONGONG NSW 2500
contact us to make an appointment
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