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How parents of disabled children can make sure they are taken care of.

When parents of disabled children are asked what is the worst thing they fear for their children, their answers don’t differ from the ones of the parents of children without disabilities.  They are all afraid that they won’t be able to protect their sons and daughters in the future.  However, for the parents of children with disabilities, the situation is a little more challenging because many times they are the sole provider of care for children that won’t be able to take care of themselves even when they become adults.

How to make sure your child is taken care of when you are not there

Children and adults with disabilities are entitled to a pension from the state. And since they are unable to take decisions for themselves, they most often don’t own anything.  However, the situation can change when the parents of a child with disabilities die and their assets are inherited by the child. Pension is cut and a guardian is appointed to deal with the assets in a way that is supposed to be “the best” for the child.

With so much uncertainty around those issues, it is a relief that since 2006, families are allowed to establish Special Disabilities Trust for their children.

A Special Disability Trust is a way for parents and family members to provide assets for a disabled child that will not affect entitlement to disability support pension.

There are some restrictions to special disability trusts but in general, they are designed to provide a severely disabled child with the best care available. One of them is that the trust should be allocated to the day to day and accommodation needs arising from the disability.

A Special Disability Trust can hold a maximum of $669,750 (indexed annually) and no more than $10,250.00 per annum can be used for the disabled child’s day to day needs .

If you keep in these limitations, your child’s medical needs will be covered by disability pension up to the moment the trust starts operating. Special disability trusts can be established to become active after the death of parents or whenever they decide their child should inherit their assets.

This kind of trust also allows parents and family members to appoint a guardian that they trust and will take the best care of their child.

How do you establish a special disability trust for your child?

The process can be complicated by many regulations but it is fairly smooth when you have a good family lawyer by your side.

Here are the main steps you and your lawyer will need to take:

  1. Your child needs to be declared severely disabled according to the Special Disability Trust beneficiary assessment process
  2. You and your lawyer prepare a will and move forward with the establishment of the trust.
  3. Follow the Model Trust Deed that prescribes the compulsory clauses needed by the social security legislators, as well as recommended clauses that give more rights and options for the child and the parents.

One way of ensuring that your child will be taken care of when you are not around is to establish a testamentary trust through a will. In your will, you can set up the trust for your child (or grandchild) and it will only take effect after you are gone and the will is opened.

A will is a must for the parents of severely disabled children and a very good place to start establishing the Special Disability Trust.

However, parents do not need to be deceased for a Special Disability Trust to be established and active. Parents that are away from their children by duty or choice, often choose to establish a trust to ensure the financial their financial security.