When parents are asked “who is your favourite child?” They always answer “I love them all I don’t have a favourite child” Having a child with special needs can be frustrating and requires extra special care and consideration. In the course of things their other children will complete their education pursue a career, marry and have children of their own however their sibling with a disability may not depending on their disability and skills. I believe my mother said it best when she was planning her will and her granddaughter with a disability. “Margaret will always need some help”. That’s the dilemma, treating all your children equally and fairly after they’ve gone while their sibling “may always need help” It’s essential that the procedures you’ve implemented for your child’s future following your death are legally bound together and provide that extra help they may need. A properly drafted will, will oversee the orderly distribution of your family’s property and possessions at that time. However, if your child already receives Government disability benefits, it is important to consider that all provinces have limits on the amount of liquid assets a recipient of government support can receive. In Ontario, for example, the current liquid asset limit is $40,000. If a recipient’s liquid assets exceed the provincial government’s asset limit, their child will lose their disability benefits until the assets are reduced to legal limit reducing their share of their parents estate.
To ensure that your child’s inheritance doesn’t jeopardize his or her entitlement to government support, the inheritance should be placed in an Absolute Discretionary Trust. This form of trust will best protect their child’s inheritance in that its wording gives the trustee absolute and unfettered discretion and control over the trust’s assets. Moreover, the trust’s funds can never “vest” to the trust beneficiary. Accordingly, the beneficiary cannot challenge the trustee, or go to court and break the trust, nor can any court order the trustees to pay out the money. Since the beneficiary is legally deemed to be “poor” and possessing no assets of his own, he will continue to qualify for disability benefits.
In Ontario, Absolute Discretionary Trusts are commonly referred to as “Henson” trusts after the celebrated 1989 court judgment involving Leonard Henson and his daughter Audrey, who was a recipient of government disability benefits. In September of that year, the Divisional Court of Ontario ruled that a trust of more than $82,000 created by the will of Leonard Henson for his daughter did not constitute a liquid asset that would prevent her from receiving her monthly disability benefits, even though the liquid assets in the trust exceeded their asset limit. To further strengthen the validity of the trust on January 25 2019 the Supreme Court of Canada upheld a challenge to the trust by proclaiming the beneficiary of the trust was “Poor”
“An equal share of your estate may be fair a fair share may not be legal”
LINK TO PARENTS PLANNING GUIDE
LINK TO HENSON TRUST
Plan to leave your child more than just memories!