An important Financial Planning Tool for families caring for a loved one with a disability
Leonard Henson was a true hero. Like so many of our cherished advocates he was motivated by trying to protect and plan for his daughter with a disability. Today, the Henson Trust goes the extra mile in not only safeguarding ODSP benefits, but secures great flexibility around estate planning.
A Henson Trust, also known as a discretionary trust, is structured to protect the assets of a person living with a disability, as well as their right to collect government benefits and entitlements such as The Ontario Disability Support Program.
When building your long term financial plan it is very important to consider whether a Henson Trust should be a component of your estate plan.
Setting Up a Henson Trust
- A Henson Trust is most often set up in a person’s will. When setting up a Henson Trust you will want to consult with a lawyer who has experience setting up this type of trust. Visit the Professional Services Directory for a list of lawyers.
- When setting up a Henson Trust it is important to consider the trustees you appoint. The Trustee is given the responsibility of handling the assets that have been left in the trust for your son or daughter. The Trustee(s) responsibilities can extend over a long period of time and end when the trust is terminated.
Factors When Considering Your Trustee:
- Know the needs of the beneficiary
- Someone you trust
- Someone of similar age in long term
- Someone who understands Trustee Act and ODSP regulations
- Someone who has time to manage the trust
- Someone with basic financial management and investment knowledge
Trustees' Responsibilities When Managing a Henson Trust:
Using Henson Trust Funds:
- Use their discretion in releasing funds from the trust
- Manage, and invest the assets of the trust
- Maintain records of transactions in the trust
- Oversee the preparation of Tax Returns for the trust
- Maintain real property owned by the trust
- Act as keeper of your son or daughter's well being
- Act within the ODSP regulations and the Trust Act
Using Henson Trust Funds:
- A person can receive more than the $10,000 in a 12 month period but if they did, some of the excess would be deducted from the ODSP amount. In some circumstances, it may be appropriate to give up some of the ODSP benefits in favour of receiving more than the $10,000.
- The beneficiary can receive additional funds over $ 10,000 for disability related costs (support workers, therapy, equipment, etc.)
- The use of funds of the Henson Trust will be at the discretion of the trustee. They are the only people who can decide how the funds will be used for the person with disability. This is why it is critical to consider who you are appointing as trustees.