A child or adult with special-needs could be a result of an motor-accident, injury or due to child birth and complications during pregnancy or at the time of delivery. Regardless of the cause: special care, knowledge and wisdom is needed to care for a loved one with special needs. Working with skilled professionals and organizations we will provide the peace of mind for your loved ones during your lifetime, while providing after-care when you are no longer here. There is no guarantee that their siblings and family members will provide the care you need for them – so put in writing and make your wishes known.
Have you thought about key information such as:
- Will they continue to live in the family’s home?
- How and who can dedicate the non-physical time with them daily?
- Does the caregiver’s faith align with the families?
- What happens to your special-needs child should the caregiver decide to take up residency in another province or country?
- Does the caregiver have the expert knowledge to source annual government credits and benefits available?
- Do they understand the law of the land?
- Have they tapped into the skills and knowledge of your special need’s child?
- How often should they take your child on day and out of province or country trips?
- Have you considered an agency with a strong track record to be the trustee instead of a loved one?
- Where feasible, should the child decide they want to get married how are the assets dealt with? Can they be co-mingled or better yet, what provisions are in place to prevent the co-mingling of their inheritance in the event the new union is dissolved?
Now is the time… not later!
You have invested many years working and taking care of your family and life happens. Wealth accumulation and the how it’s dispersed becomes even more important for families with special needs or acquired injured child(ren) and adults.
- The intricacies of managing and taking care of a loved one can last a lifetime. Finding the strength and financial resources, along with the government recourse can also be overwhelming.
- As you are thinking about a careful constructed estate plan, establishing a Henson Trust should form a part of this plan.
What is a Henson Trust?
A Henson Trust is an absolute discretionary trust which guarantee’s your financial affairs will be structured appropriately and will ensure you are maximizing all the benefits that may be available to you and minimizing the risk to your family and caregivers.
Henson Trusts – What Are They and Why Are They Used?
One of the ways an individual may qualify for income support under The Ontario Disability Support Program Act is to qualify under the definition of a “person with a disability.” Generally, to qualify as a person with a disability, the individual must have a substantial physical or mental impairment that is expected to last at least 12 months and substantially limits that individual’s activities of daily living in at least one of the following three areas:
- Personal care;
- Activities in the community;
- Activities in the workplace
Once a person has qualified as a person with a disability, certain financial tests must be met. If a prospective recipient or recipient of ODSP has assets (more than the provincial maximum as legislated with some exceptions) or receives income over a prescribed limit, they will cease to be eligible to receive ODSP payments
Certain assets and funds are excluded from the asset limits and the accumulation of income in the funds is exempt from inclusion in the disabled’s persons income. One of the most important of these funds is what is referred to as a “Henson trust.” Henson trusts are used to provide extra comforts and income for the disabled person without jeopardizing government benefits.
A Henson trust established for a disabled beneficiary does not result in the loss of government benefits because the beneficiary has no vested right to receive income or capital from the trust.
Henson trusts have the following elements:
- the trustee(s) must have absolute discretion;
- the assets of the trust do not vest in the beneficiary; and
- that there is a gift-over following the death of the beneficiary.
There is no limit on the value of capital that can be put into a Henson trust, however, distributions from the Henson trust are subject to the income limits imposed by The Ontario Disability Support Program Act. It’s possible for the Henson trust to provide a steady income for the beneficiary, however, the income must remain low in order to not jeopardize the ODSP payments.
 S.O. 1997, c.25, Sch, B
 If the disabled person has a spouse, the disabled person is allowed a further additional funds / assets (up to the legislated provincial maximum).
- Without a Henson Trust, you risk losing your ODSP support payments including your health and dental benefits.
- When planning for disabled beneficiaries you must ensure that all provisions are structured properly, taking into account “liquid assets” and income restrictions.
In other words, instead of being able to include the government benefits available to your loved one and improve your disabled beneficiary’s comfort, care and enjoyment of life, the inheritance would be depleted for day-to-day care.
EXECUTION AND DELIVERY
With estate planning a team of specialists, can aid in the decision-making process when a family member is diagnosed with special needs or acquires an injury.
Now is the time to implement an Estate Plan. You can engage our team of specialists, or we can collaborate with your associated professionals and aid in the understanding of the following:
- Government benefits and how they work.
- Planning dynamics on the family situation.
- Clarifying relevant legislation.
- Bringing humanity and perspective to the planning process.
Parents have many considerations when implementing an Estate Plan, but it does not have to be difficult. Knowledgeable professionals can help to ensure you have provisions for the best structure for your family member with special needs or acquired injury.