Q. Helen
I’m a very practical person who likes everything to be in order and as such, I would like to have a will prepared which will cover the needs of my family once I’m gone. This is where my problem lies. I have three wonderful children, who I love dearly. My youngest was born with a disability, which makes it impossible for him to be independent and although he can get about and do some things for himself, he requires quite a lot of care. Once I’m gone, the vast majority of my estate will have to go towards providing such care, but what is the best way to arrange this?

Also, once I’m gone I would very much like for my two daughters to be involved in my son’s life and to share his care as and when they can (as they do now). But  I am worried they will get upset when they find out how my estate has been divided and that they get far less than their brother. Can I request in my will that they only get what I have left them if they agree to look after their brother?

A. Legal content provided by Rod Cunich, Slater & Gordon
Helen, I applaud your practicality and your understanding that the needs of your family once you are gone, require need planning in the here and now.

I’m sure your daughters are well aware of the needs of their brother and that you wish to plan for how these will be met once you’re gone. I would urge you to be open and honest with your daughters, advising them of the legal advice you have been given and involve them in the process of drafting and preparing your will.  This will not only remove any likelihood of shock and disappointment, but it will also give you the opportunity to convey in person what you are hoping to achieve. Also, if you have included your family, then there is less chance you will feel obliged to change your will if they disagree with what you have requested.

If it is too distressing for you to talk to your daughters directly, or you are confused by the legal language used, then you may be able to call on your solicitor to explain the process to them. Sometimes a third party can remove the confusion and emotion, which is often felt when talking about death and dying.

I would also suggest that, if possible, you refrain from stipulating that your daughters only benefit from your estate if they are responsible for your son. This is not fair on them, or him, and will only create ill feeling between all parties concerned. You say that you have three wonderful children and hopefully your daughters won’t abandon their brother, or go against your wishes.

It’s worth remembering that, in most cases, it is not a parent’s responsibility to provide for their adult children once they have left the family home and any inheritance left to them is a gift, not a right. I’m sure your daughters will understand that your son needs the bulk of your estate in order to access the care he requires and that they won’t begrudge him this.

As your situation involves complex legal advice, I have asked Rod Cunich of Slater & Gordon to provide you with some ideas on how you can ensure your will meets your requirements.

Helen, there are numerous legal structures which can be utilised to address this situation, but the structure must be co-ordinated with your financial planning.

Having consulted all your children and gleaned an understanding of their position, the starting point is to consult a financial planner to help you undertake some financial modelling.  This process will help you work out pretty accurately:

• how much money will be available when you die,
• how much will be required to support your child after balancing Centrelink benefits, the cost of accommodation and a multitude of other considerations,
• what will be available for your other children on your death, and on the possible death of your disabled child,
• funding options to achieve your desired outcomes including the use of life insurance, annuities, superannuation and funds management.
  
  

The modelling will help identify which legal options are most appropriate to your circumstances, and what in reality ‘fairness’ might look like. It’s recommended that a financial adviser who specialises in this type of modelling be engaged to work hand-in-hand with your lawyer to develop the optimum solution for you.  Some of the legal structures commonly used in combination with financial advice are:

1. A ‘special disability trust’ created while you are alive or stipulated in your will.  This type of trust can be used to assist with the provision of care and accommodation without impacting on Centrelink benefits.  They are restricted to severely disabled people so you would have to have your child assessed by Centrelink to determine if he does qualify.

2. An 'all-needs protective trust' created while you are alive or stipulated in your will.  These trusts are much more flexible than special disability trusts as the funds can be used for all purposes incorporating lifestyle needs including holidays and hobbies. And there is no restriction on who can use them.  The shortcoming with them however, is that property owned by the trust and income generated do count towards the Centrelink means tests, so care must be taken not to adversely affect Centrelink benefits.

3. A combination of both types of trust.

Should your disabled child pass away first, the remaining capital in both these trusts can revert back to your other children, or their descendants. 

Your other children can be involved in the management of the trusts as trustees or as ‘family advisors’.

If you would like more advice, you can contact Rod Cunich at Slater & Gordon on 1800 555 777, or visit SlaterGordon.com.au for more information. 

I hope this advice has helped you tackle a tricky subject and that your family appreciate all that you are doing for them.