Estate Planning for the Disabled

Disability can occur at any age.  For some, disability occurs at birth and for others, disability can occur due to accident or illness during the course of life.  In some cases, the disability can affect a person’s decision-making ability, whilst in other cases it might affect physical abilities.

For those with physical disabilities but who are able to understand the nature and affect of their actions, it is possible for them to appoint a financial attorney to manage their financial affairs and a guardian to make health and lifestyle decisions in the event of loss of capacity.

Where a person lacks mental capacity, they may also be vulnerable to financial abuse, as well as physical or mental abuse.

Where a disability affects a person’s ability to make decisions and to understand the nature and effect of the decisions made, it is often the case that financial management and guardianship appointments are required for the making of financial, health and lifestyle decisions.

Where a person is concerned that a child, relative or friend is in need of someone to manage their financial, health and lifestyle decisions, then it is possible in each State and Territory of Australia to have the  Court or Tribunal appoint a financial manager or guardian to make these important decisions on behalf of the affected person.  Further, Courts and Tribunals have the power to review and revoke existing financial attorney and guardian appointments if there is a concern that the appointed attorney and guardian is not acting in the best interests of the affected person.

Whilst it is important to consider financial and lifestyle decision-making whilst alive, it is equally important to consider how assets will be distributed on death.

Where a person has the ability to understand the nature and effect of making a will, a will can be made.

But what happens when a person lacks the mental capacity to make a will and if he or she were to die, the estate would be distributed to persons he or she would not have wished to benefit?

In such cases, it might be necessary to consider a “statutory will”. A statutory will can be made in each State and Territory in Australia and is a will made by the Court for the incapacitated person.

From an estate planning perspective, the most common types of circumstances in which a statutory will should be considered are when:

  • There is an alleged mistreatment of the incapacitated person by the person who stands to receive a benefit from the estate
  • There is a disabled child who has been cared for by one parent and if the child was to die, the absent parent would stand to receive a benefit from the estate
  • An existing will needs to be amended due to a change of assets or personal circumstances and the will-maker is unable to make the changes to the will

The statutory will provisions enable the estate of an incapacitated person to be distributed to persons that the incapacitated person would have wanted to benefit if he or she had the required capacity to make a will.  It is a useful estate planning tool and should always be considered for will-makers who lack the capacity to make a will.

Marie Brownell

Head of Private Client Services

Accredited Specialist (Wills and Estates)

[email protected]