Becoming a primary carer for a minor, older relative or someone with special needs carries special responsibilities. In particular, you must ensure their needs will be met in the event that you can no longer do it yourself.
Establishing a trust, either by will or deed, is one way to ensure your family’s financial needs are met. Trustees can look after:
- life interest trusts
- protective trusts
- minors' trusts
- charitable trusts.
You may wish to appoint a manager to look after the financial and administrative requirements of family members resulting from compensation payments awarded by courts for personal injury or from insurance settlements that must be held on behalf of a disabled person.
A financial manager can provide:
- assistance in settlement arrangements
- advice to the court by submitting appropriate documents, including the anticipated cost of funds management
- liaison with care professionals and medical experts as required
- legal expertise
- development and execution of an individual investment strategy
- keeping of financial records and payment of bills
- tax services.
Special disability trusts
Many aging parents are concerned about what will happen when they are no longer able to care for children with a severe disability.
The Australian Government has introduced a social security concession that assists families to make private provision for people with severe disabilities, using a trust structure.
Immediate families may place up to $500,000 into a special disability trust for the future care and accommodation of a child with a severe disability.
This trust will not affect the social security means test and gifting rules, however the trust must legally exist and meet the government’s requirements.
Complete financial management
You may consider a complete financial administration service for someone who is unable to manage their financial affairs due to factors such as declining health or mental capacity.
Some financial institutions offer a service that manages the day-to-day administration of your investment portfolio, preparation and execution of their investment strategy if required, preparation and lodgement of tax returns, payment of bills and personal expenses, ensure all insurance is up-to-date and make all Medicare and health benefit fund claims and provide assistance with accommodation moves. Where necessary, they act under power of attorney and make all financial decisions.
You need Adobe Reader to view PDF files. You can download Adobe Reader free of charge.