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Families with disabled beneficiaries who are dependent on their caregivers have special issues to consider when planning for the financial resources that will be available to these beneficiaries, including through their estates. The Ontario Disability Support Plan offers assistance to adults with disabilities, but there are limits. If the disabled adult inherits assets directly or they exceed the asset limit set out in the legislation, they may not qualify for the assistance until they have depleted their inheritance.

There is, however, an exception. A “Henson Trust” is an absolute discretionary trust such that a disabled beneficiary may receive Ontario Disability Support Plan benefits and their inheritance simultaneously. This allows the estate trustee to make payments to the beneficiary from the estate at their own discretion. The “Henson Trust” was established in the case, The Director of the Income Maintenance Branch of the Ministry of Community and Social Services v. Henson, 36 Estates and Trusts Reporter 192 (Ont. C.A.).

There, the Ministry of Community and Social Services stopped paying the benefits to the daughter of the deceased, who had left a fund in an absolute discretionary trust in his will. The ruling of the Ministry was overturned by the Ontario Divisional Court and the Court of Appeal. These courts indicated that because the estate trustee can essentially decide how much of the trust`s benefits, if any, the beneficiary will receive, and when the beneficiary will receive them, the beneficiary can still be eligible for government benefits.

Thus, a Henson Trust can be a great option to consider when planning for a disabled loved one. However, it is crucial to take extra care in choosing an estate trustee, as they will call all the shots for the beneficiary regarding benefits they will receive under the trust. To discuss estate planning for a beneficiary with special needs, please contact Andrea Kelly Law.

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