Disability Planning

Estate Planning (Henson Trust)

One of the biggest concerns parents of a child with a disability face is what will happen when they pass away. Estate planning is a challenging process at the best of times. When you have a child with a disability who is not able to manage their own financial affairs, estate planning raises unique questions.

  • How much money do we leave our disabled child? 
  • Who will manage the assets?
  • How should the assets be structured?
  • Will the assets affect our child’s government benefits?
  • How much do we leave for our other children?
  • What role will our other children play after we are gone?

Effectively responding to these questions requires an understanding of the advantages and restrictions of various government programs as well as appropriate trusts that help safeguard these crucial benefits.

Henson Trust

A Henson Trust can also be called an Absolute Discretionary Trust or Discretionary Trust and are often used interchangeably. When used in the context of estate planning for a person with a disability, all three refer to a very specific type of trust where the beneficiary (the person with a disability) holds no ownership of the trust and the trustee has sole discretion to distribute income and capital from the trust. This structure allows for provincial disability support payments to be protected in most provinces (British Columbia, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island).

Henson trusts can be set up as “inter vivos” trusts, meaning the trust is set up while the parents/caregivers are still alive, or as “testamentary trusts,” which is a clause written in a will and the trust is only established upon death.