A Henson Trust could help the parents of autistic children to continue supporting their loved ones after they’re gone.
I recently had the privilege of speaking at an event put on by Autism Speaks Canada, which focussed on financial success with an autism diagnosis.
The charity says that lack of knowledge and uneasiness about discussing sensitive issues can be a barrier to financial health for families with children on the autism spectrum, and gathered a number of speakers to redress the balance with information on financial planning, insurance, investments and wills and estates.
I was pleased to do my bit too with a presentation that focused on Henson Trusts, which are designed to provide additional income to a disabled beneficiary without risking their ability to receive government assistance such as the Ontario Disability Support Program.
Income from this special type of testamentary trust – originally devised for the protection of bequests made to children with special needs – is exempt from the strict $40,000 asset limit for ODSP recipients, whose benefits are worth up to $1,169 per month. Remaining eligible for the program also gives claimants access to help with housing and medical bills.
Henson Trusts get around the ODSP asset cap because of a non-vesting provision which means that the beneficiary does not actually own the funds in the trust.
They were first recognized by Ontario courts in the late 1980s, but the Supreme Court of Canada recently solidified their status nationwide in a case involving a disabled B.C. woman receiving rental subsidies as part of a social assistance program.
However, it’s important to note that Henson Trusts are not the only option to provide for beneficiaries with neurodisabilities, and may not always be the best one for individuals with very large estates.
Although a Henson Trust can offer a significant boost to the income of a person collecting ODSP, it may still feel like a lifestyle shift for those whose parents who spent lavishly on programs and services to make them comfortable during their lifetimes.
They also place huge responsibility on the trustee, who has absolute discretion over whether, how and when to use the money. If you do opt for a Henson Trust, you need to take extreme care in the selection of a trustee for this very reason, and many opt for a trust company to carry out the job.
Whatever your unique circumstances, an experienced professional can help you decide which choices work best for your family.
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