AUSTRALIA Law and Practice Contributed by: William Moore, Frank Hinoporos, Emma Woolley and Todd Bromwich, Hall & Wilcox
1 July 2026, indexed each financial year. The prin - cipal beneficiary must satisfy the definition of being severely disabled, in which case the SDT can receive a property for use by the principal beneficiary as their main residence, together with assets to the value of AUD862,750 (as of 1 July 2026, indexed each financial year), without affecting the disability support pension. Higher amounts can be contributed to the SDT, but this will reduce the disability support pension amount. Where government support is not a factor, or if more flexibility is required, discretionary trusts with bespoke provisions are an alternative option. These can be established through a Will on death (testamentary) or during a lifetime (inter vivos). Common considerations include appointing the appropriate controllers (trus - tees and appointors) to make decisions and regulate trust distributions, and placing limitations on capital and income distributions (such as dollar amounts or limiting them for certain purposes, such as health, education, care and maintenance). Further guidance for the controllers can be provided through a non- binding letter of wishes. Concessional tax treatment can also be obtained in certain circumstances, includ - ing minors receiving around AUD22,800 of tax-free The concept of a guardian can apply to a minor, and to an adult who is unable to make decisions for them - selves (for example, due to an injury or disability). For minors, a guardian is often appointed through a Will. If the parents die, this appointment can be for - malised through the Family Court or Children’s Court. Strong weight will be given to an appointment under a Will, but the court’s decision will ultimately be guided by what is in the best interests of the child. income from a testamentary trust. 8.2 Appointment of a Guardian For adults, a guardian is appointed through an admin - istrative tribunal to make medical and healthcare deci - sions. A separate administrator may be appointed for financial and legal decisions. Appointments are sub - ject to ongoing review, which may include a require - ment to submit accounts to the tribunal. In court disputes, the minor or incapacitated adult is represented by their litigation guardian or tutor. This
title varies between jurisdictions, and is usually the parent, attorney under a power of attorney or the administrator appointed by a tribunal. 8.3 Planning for Incapacity Each Australian state and territory has its own legis - lative framework governing incapacity planning, with differences in terminology, scope of authority, execu - tion requirements and delegable decisions. The fol - lowing legal mechanisms are available. • In respect of financial and legal matters, most states and territories allow for a person to make an “Enduring Power of Attorney”, appointing some - one to act on their financial and legal matters. In the Northern Territory, the applicable document is called an “Advance Personal Plan”. An Enduring Power of Attorney differs from an ordinary power of attorney as the appointment survives the donor’s incapacity. • In respect of personal and healthcare matters, the donor can appoint someone for personal and health decisions. The mechanism differs between jurisdictions (eg, “Enduring Power of Guardian - ship”, “Appointment of Enduring Guardian”, “Enduring Power of Attorney” or “Appointment of a Medical Treatment Decision-Maker”). • A person may also make a directive about their own future medical treatment (eg, refusing certain treatments). Depending on the jurisdiction, such directives may be legally binding or provide author - itative guidance. These are known as “Advance Health Directives”, “Advance Care Directives” or “Advance Care Statements”. In practice, these documents are commonly recom - mended as part of comprehensive estate planning. Additional incapacity considerations include the fol - lowing: • if a person holds a control role under a discretion - ary trust (for example, as appointor, principal, guardian or protector), it may be appropriate to nominate a successor to that role in the event of incapacity; and • if a person is the sole director and sole shareholder of a company, it may be appropriate to address incapacity in the company’s constitution and suc -
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