In Australia, families with disabled members often confront the challenge of ensuring long-term financial security while navigating the complexities of Centrelink benefits.

Special Disability Trusts (SDTs) have emerged as a crucial mechanism to address these concerns, offering a structured way to provide for disabled individuals without compromising their eligibility for essential government support.

Some of the key features and benefits that SDTs provide are:

• Financial Security: SDTs provide a dedicated financial resource to support the disabled beneficiary throughout their lifetime, ensuring continuity of care and quality of life.
• Centrelink Benefits Preservation: Assets held within an SDT are generally exempt from the Centrelink means test, preserving the beneficiary’s entitlement to means-tested benefits like Disability Support Pension (DSP) or Carer Payment.
• Flexibility: The trustee appointed to manage the SDT has flexibility in investing, distributing, and utilising trust assets to meet the evolving needs of the disabled individual.
• Tax Considerations: SDTs may offer tax advantages, including concessional tax treatment on income derived from trust assets, subject to compliance with taxation laws.

Lambourne Wealth’s Involvement

Financial planners play a crucial role in the establishment and management of SDTs, providing for the following:

• Expertise in Disability Planning: Financial planners specialising in disability planning possess the knowledge and experience to navigate the legal, financial, and regulatory complexities associated with SDTs.
• Strategic Planning: They assist families in structuring the trust to optimize financial benefits while ensuring compliance with Centrelink requirements.
• Investment Management: Financial planners help trustees prudently invest trust assets to generate income and grow the fund, balancing risk and return.
• Tax Efficiency: They provide advice on tax-efficient strategies to minimise tax liabilities associated with trust income and distributions.
• Regular Review and Adjustment: Financial planners conduct regular reviews of the trust’s performance and beneficiary’s needs, making adjustments to the trust strategy as necessary.

Establishing a Special Disability Trust

Setting up an SDT involves several critical steps:

• Legal Consultation: Engage a solicitor experienced in disability law to draft a comprehensive trust deed that complies with legal requirements.
• Trustee Appointment: Select a trustee who understands the beneficiary’s needs and is capable of managing trust assets responsibly.
• Funding the Trust: Transfer assets into the trust in accordance with legal and Centrelink guidelines, ensuring assets are used exclusively for the beneficiary’s benefit.
• Financial Planning: Collaborate with a financial planner to develop an investment strategy aligned with the trust’s objectives and beneficiary’s needs.

How We Can Help

Special Disability Trusts offer a vital avenue for families to secure the financial future of disabled loved ones while safeguarding their Centrelink entitlements.

At Lambourne Partners, we believe that working with a financial planner in this process is crucial in navigating the complexities of SDTs, ensuring compliance with legal and regulatory frameworks while optimising financial outcomes. By leveraging their expertise, families can create a sustainable framework that supports the lifelong care and well-being of their disabled family members with confidence and peace of mind.

To find out more and how we can help in your situation, please contact us below or on 02 4969 6600 for a confidential and obligation-free discussion.