How to Protect Your Disabled Child in Your Will (Without Risking Their Pension or NDIS)

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If you’re a parent of a child with disability, one of your biggest concerns might be what happens to them when you’re no longer around. You want to make sure they’re supported—financially, emotionally, and practically. But leaving them money through a regular will can sometimes do more harm than good, especially if they receive the disability support pension or NDIS.

This is where a testamentary trust comes in. It’s a powerful tool that can help you protect your child’s future while keeping them eligible for essential support.

What Is a Testamentary Trust?

A testamentary trust is a type of trust you include in your will. It doesn’t come into effect until after you pass away. Instead of giving your child a lump sum directly, you leave their inheritance in a trust. A person you choose—called a trustee—manages the money on your child’s behalf.

The trustee can use the funds to pay for your child’s needs, like housing, therapy, medical care, support workers, education, or even social activities. This way, your child gets the benefit of your estate without the risk of losing government help or struggling to manage a large sum of money on their own.

Why Is a Testamentary Trust Helpful for Children with Disability?

Leaving money directly to your child might:

• Push them over the Centrelink asset or income limit,

• Reduce or cancel their Disability Support Pension or NDIS support,

• Make them vulnerable to financial abuse or pressure,

• Place too much responsibility on them if they’re not able to manage money on their own.

A testamentary trust helps avoid these problems. The money is controlled by someone you trust, and used only for your child’s benefit. It’s a way of offering long-term care—on your terms—even after you're gone.

Can My Child Keep Their Pension if They Inherit Money?

It’s one of the most common concerns:
"Will my child lose their pension if I leave them money in my will?"

If the money is given to them directly, the answer may be yes. But with a well-structured testamentary trust, it may be possible for them to keep their Centrelink and NDIS support, while still benefiting from your estate. It depends on how the trust is set up, so professional legal advice is key.

Example

Let’s say Susan has a son, Daniel, who lives with an intellectual disability. Daniel receives the disability support pension and uses NDIS funding for a support worker and transport. Susan owns her home and has savings, and wants to leave everything to Daniel when she dies.

But Susan’s solicitor explains that if Daniel inherits everything directly, he could lose access to his pension. Instead, Susan includes a testamentary trust in her will. When she passes away, her estate goes into the trust, and her niece is named as the trustee. The trustee uses the money to pay for Daniel’s rent, care, outings, and health costs—while Daniel continues to receive government support.

What to Do If You’re Thinking About This

A testamentary trust isn’t a DIY project. It needs to be included in your will and written properly to do what you need it to do. Every family is different, and every child’s needs are unique.

If this is something you’re considering, it’s important to speak with a qualified lawyer who understands how to structure the trust in a way that protects your child and complies with current laws.

This blog is here to help you understand the big picture—so you can make informed decisions and ask the right questions when the time comes.

Need Guidance?

If you’ve been wondering how to protect your disabled child in your will, or how to leave money without affecting the disability support pension, you’re not alone. Many families face the same questions—and there are thoughtful, practical solutions out there.

On this blog, I explore topics like testamentary trusts, wills, and estate planning for vulnerable beneficiaries. If you’re looking to take the next step, I encourage you to reach out to a solicitor with experience in disability and estate planning. They can guide you through it with care.

This post is for general information only and is not legal advice. For advice tailored to your situation, speak with a qualified legal professional.