What are the trust property requirements for a Special Disability Trust?

Telemon Lawyers > FAQs > Probate, Wills & Estates > Special Disability Trusts > What are the trust property requirements for a Special Disability Trust?

The Social Services Act 1991 (Cth) sets out strictly the requirements for a Special Disability Trust.

Most important, it is not possible for a beneficiary of a Special Disability Trust to put their own property into the trust unless it meets the exemptions set out in Section 1209R of the Act. Subsections (1) and (2) provide:

(1)  The assets of the trust must not include any asset transferred to the trust by the principal beneficiary of the trust, or the principal beneficiary’s partner, unless:

(a)  the transferred asset is all or part of a bequest, or of a superannuation death benefit; and

(b)  the transferor received the bequest or superannuation death benefit not more than 3 years before transferring the transferred asset.

(2)  The assets of the trust must not include any compensation received by or on behalf of the principal beneficiary.

Thus the Act requires that unless the assets are held by a third party, trust property cannot be the beneficiaries assets unless they were received by will or superannuation within three years of the transfer to the trust.