Henson Trusts

PLANNING FOR A DISABLED CHILD OR OTHER INDIVIDUAL

As any parent of a disabled child knows, one of the most important aspects of your estate plan will be to provide for an adult child who is unable to provide for him or herself after your death. While a disabled adult in Ontario may qualify for government benefits from the Ontario Disability Support Program (“ODSP”), any inheritance from you (or any other person) may jeopardize this entitlement.

Under Ontario legislation, no person is eligible for ODSP income assistance if his or her assets or income exceed the allowable limits. Subject to certain exemptions, for example, a single person may only possess $5,000.00 in assets and receive income of $6,000.00 in any consecutive 12-month period.

A Henson Trust is an estate-planning tool that allows you to provide additional financial assistance to your child without disqualifying him or her from ODSP benefits. Unlike a trust that is derived from an outright inheritance or life insurance proceeds, which will generally disqualify the beneficiary from receiving ODSP benefits if trust assets exceed $100,000.00, a Henson Trust has no asset limit.

The terms of a Henson Trust provide the trustee with absolute and sole discretion regarding payments from the trust to the beneficiary. The trustee is not obliged, and cannot be compelled, to pay out any of the funds in the trust to the beneficiary for his or her support. Therefore, capital of the trust is not considered an asset of the beneficiary, and the interest, if reinvested in the trust, it is not considered income.

The Henson Trust provides an alternative for family estate planning that will allow you to ensure that your disabled child receives adequate and sustainable support throughout his or her lifetime.