Estate Planning for Children with Disabilities

Hi All,

We’ve been given the bad news that a loved one has the big ‘C’ (the father) and the family is now looking into estate planning.

The outcome of the will is to ensure all children are included and protected.

There are five children (all adults), three of which have disabilities.

Fictitious names listed for simplicity.

The oldest (Amy) unfortunately was born with severe brain injuries. She is ******* and has been bed ridden since birth. She is under state care (Victoria).

Another child (Brad) was born with cerebral palsy and was involved in a serious car accident which left him with an acquired brain injury and bound to a wheelchair. He requires round the clock care which he receives from TAC and his parents.

The third child with a disability (Felicity) is the one the family would like to protect the most and her story is probably the most heart touching.

She is 35 and has a mental disability. Her IQ is that of a small child. However she is independent enough to live out of home and not reliant on her parents for primary care. She has never worked. Her sole income; disability payments from Centrelink.

Unfortunately it is the company she maintains which is most concerning. As she is simple, she has been abused, taken advantage of, belittled and mistreated. We know that people
with criminal convictions have used her to trick her parents into handing over large sums of monies on multiple occasions. Her centre link payments are withdrawn by these low lifers and she very rarely has any money for herself.

I could go on but will refrain from posting the worst of it.

For the record Felicity has a heart of gold. Very helpful, kind and considerate and is loved by her family, irrespective of the many times the family provides help, support and attempts to remove her from these people.

The father wants all to inherit equally, but wants the two children without disabilities (Emily and Zara) to execute the will and to manage the financial affairs of the other siblings with disabilities.

The mother is also battling mental issues and is on heavy medication.

It simply cannot be that Felicity be allowed to directly access inheritance that could well be close to $1m with the ravenous vultures circling to empty her accounts.

These people are quite literally scum. I am not referring to defacto or spouses.

The family is very aware that these undesirables (who have nothing to do with the family) will push and fight to have the inheritance accessible.

My questions:

1. How best can we structure the will to completely and confidently protect Felicity? Emily and Zara need to manage it somehow as they would have Felicity’s best interests at heart.
2. Even though the family would want Felicity to inherit, is there a way to ensure her estate is not vulnerable?
2. Emily and Zara are already appointed as Brad’s administrators by VCAT. Can they legally set the terms of Brad’s will as he is not capable?
3. As Amy will probably not be mentioned in the will (I am assuming) would the state have a right to contest?

Again this is a loving family with no intentions to exclude. Only to protect.

Advice would be greatly appreciated.

 

Your friend needs some serious legal advice. Consider one thing, even if they have the best of intentions, are the siblings capable of managing financial affairs?

Often people make siblings, family etc executors because they have good intentions. But they may make bad financial or emotional decisions.

 

Your loved one will need some specialist legal advice; however, a Special Disability Trust may be a good starting point.

 

1. Special disability trusts for each disabled or discretionary trusts with independent trustee. Each share to separate trust. Legal advice should be sought by the person making the will.

2.yes as above

2. No. Attorneys cannot make wills

3. They can make a family provision claim

 

Who manages such trusts?
May it be a family member?
Is there any professional fund manager/management company that handle such things?

 

Can be a family member or a professional trustee

 

Can even be several. I have seen a trusted adviser AND family member act jointly.

There can also be insurance bond alternatives or work alongside the trust. A key benefit is removing tax concerns

 

Dear Tangible,
some solicitors will do 30 minute first visit for free.
We interviewed three of them, and settled on the one that we felt comfortable with.
Can I suggest you find some who will do that?
I hope this helps

 

No legal advice here but a comment to consider.

Has anyone asked the siblings if they want to manage the money/estate for the other three siblings. That could be a huge stress and responsibility they might need to assume for the rest of their siblings lives and not something I would wish upon a sibling. Could have a very detrimental impact on the sibling relationship.

Could state trustees or similar be used instead?

 

Very good points; it's no picnic. It's a thankless and sometimes confronting series of tasks.
However, one or both of the siblings may choose to be Private Managers and they then make every money based decision (which is nearly everythingwhen you think about it). The NSW Trustee and Guardian helps by checking your accounting annually. Although it is under-staffed and under-funded, it's a god-send.
There would be something similar in Victoria.