Estate Planning & the Henson Trust

I see Wilful has been advertising a lot on TV lately. Avoid the hassle and cost of seeing a lawyer. Makes sense, I suppose. But not a good idea if you have beneficiary with a disability. 

If your loved one receives money from the Department of Community Services (whether from the Disability Support Program or otherwise), your Will must be carefully drafted to preserve those benefits after you’re gone. For more information, please follow the links. 

Protecting Your Child’s Future with the Henson Trust 

Can I Really Do That - The Henson Trust in Nova Scotia

You can also find more information but scrolling to the bottom of the sidebar and clicking on the Henson Trust label.

Protecting an Inheritance with the Registered Disability Savings Plan?

I was asked recently whether an inheritance could be placed directly into a Registered Disability Savings Plan ("RDSP") so as to protect those funds from the Department of Community Services. As an aside, if you're somehow not already familiar with the RDSP, you really need to be.  

As long-time readers will know, when calculating an individual's [continuing] financial eligibility to benefits under the Disability Support Program ("DSP") the Department of Community Services ("DCS") looks at both the individual's monthly income and their assets. With some specified exceptions, the Department considers any property owned by a person regarded as having value and available to meet debts and commitments as an asset.

For our purposes, there are four main ways of transferring property or money to a beneficiary under a Will. The executor will be directed to 

• transfer the bequest directly to the named individual;
• hold the funds in the type of discretionary trust used whenever a minor child is a beneficiary;
• hold the funds an absolute discretion trust [better known as a "Henson trust"] or
• direct that the funds be placed in an identified RDSP for the benefit of the beneficiary.**

Unfortunately, only two of the above will protect an asset like an inheritance from being taken into account by under the DSP. Neither a direct transfer nor the creation of the typical and well-used discretionary trust bodes well financially for any beneficiary who is [or will be] eligible for support under the DSP, as both will result in the funds being taken into account and negatively affect the beneficiary's current (and most likely) future benefits. Unfortunately, the more significant the the inheritance, the greater that negative effect will be.  

The key to protecting any inheritance from DCS is to ensure that, from a legal point of view, the funds are never placed in the hands of the beneficiary, meaning the beneficiary has no legal right, either themselves or through an agent, to access those funds, something that both a Henson Trust and a RDSP can do IF the Will is properly worded. 

The Henson Trust                                                                                                                            I am a huge proponent of the Henson Trust in such a situation as it's the safest and most effective way to make sure that the inheritance is protected from the DCS while maintaining quick and easy access to the funds for the benefit of the beneficiary. As discussed many times over the life of this blawg, this is hands down the best way to handle an inheritance for a person who is or will be receiving government benefits. 

Estate Documents: When is it Too Late?

I want to share a very sad situation I was recently involved in so that hopefully it won't happen to any other family.

I was approached by a gentleman seeking estate documents [Wills, Powers of Attorney ("POA") and Personal Directives ("PD")] for himself and his wife, who was hospitalized with a terminal condition. I took instructions, completed the documents and attended at the hospital so they could be signed.  However, when I spoke to the wife, I immediately realized we had a problem - she did not appear to have the legal capacity required to validly sign the documents.

Although the instructions the husband had given sounded perfectly reasonable and I had no reason to think that this wasn't what she wanted, I could not proceed with having the wife sign the documents.

What's required for a person to have the "legal capacity" will vary depending on the act to be performed. However, in general terms, in order to execute legally valid documents, you must have a certain level of competency. You must have the ability to understand the information relevant to making the decision and the ability to appreciate the reasonably foreseeable consequences of the decision or lack of decision.

Unfortunately, mental competence can become an issue if a person’s ability to think clearly is affected by illness, drugs, or pain. This is why it's critical that Wills and other estate documents be completed while you are in good health so that there are no questions as to your mental competence.

I felt bad for both parties but it emphasized how important it is to prepare such documents before it is too late.

Note to yourself: there's a good chance it will be "too late" to proceed with such documentation when you already have a terminal diagnosis.

This is especially so when you consider leaving assets in a Will to a beneficiary whom is challenged.

For more information on the standards required to execute valid estate documents, please follow the link.

Mea Very Culpa ... Estate Planning

You know it's bad when ...

Even I can't believe that I have only posted once since February. And this after promising to post on Nova Scotia's new guardianship representation legislation for the past seven months.

Hence: Mea Very Culpa

When it comes to the promised post(s) about the new Adult Capacity and Decision-Making Act, in my defence, there's a fair bit to digest there and the fact that takes time is somewhat problematic, especially when you have actual client files demanding your attention. That being said, I am working on a representation application at the moment and once I have walked through the process myself, I will be in a much better position to pass on what you need to know.

I'm happy to say that I have done a fair bit of work on the new Nova Scotia  Legal Representation Kit, but that, too, will benefit from having actual practical experience with the new legislation to work from.

In the interim, to appease the masses and remind you that proper "estate planning" involves more than just a Will, I offer you this quick reference estate planning chart courtesy of the Legal Information Society of Nova Scotia (a highly-recommended resource lovingly known as LISNS).

An Estate Planning Tool For All

We've talked a lot  about the Henson Trust in the past - it's importance, it's validity in Nova Scotia and how crucial it is to ensure that one is drafted correctly.

You might want to go back and review some of that. It's okay; I will wait.

One of the things we haven't discussed, though, is the fact that the use of the Henson Trust doesn't have to be limited to families that have a member with special needs or who is in receipt of provincial disability benefits. Although originally designed to protect the inheritance of children with special needs, it can also be an effective estate planning tool for other reasons and even for other families.

For families that do have a child with special needs, in addition to it's ability to protect the beneficiary's provincial disability benefits, a Henson Trust can be a tax-efficient way of taking care of that challenged child's siblings or other relatives. In many cases, the amount of money in the trust is more than the child will require, and whatever remains after the child’s death can be redistributed among his or her siblings.

I will let Ken Pope explain the other beneficial tax implication for families who have a member with special needs:

Under Canadian tax law, there are three types of testamentary trusts: a Graduated Rate Estate (GRE), Qualified Disability Trust (QDT), and all other testamentary trusts (OTTs). 

It used to be that all testamentary trusts were generally taxed in the same way — at the same graduated tax rates as any individual, but as of Jan. 1, 2016, OTTs are taxed at the highest federal tax rate while GREs and QDTs are not ...

"The taxation of testamentary trusts has changed, but as long as income is declared or attributed in the hands of beneficiaries who are in lower tax brackets, there’s no real change,” Pope says. “Now all income in the hands of the trust is taxed at the top marginal rate of 44 per cent, but if the income is declared in the hands of a beneficiary, it’s taxed at a substantially lower rate.”Finally, a reason for any family to consider using a Henson Trust is to allow parents to sprinkle income among their children or to protect assets in the event of a divorce.

As I said, however, this isn't just an estate planning device for families with a member with special needs. A very good reason for all families to consider whether or not a Henson Trust might be useful in their circumstances is the fact that it gives parents the ability to sprinkle income among their children and protect assets in the event of a divorce.

If you receive $100,000 inheritance from your father, and you and your husband use it pay down your mortgage, you won’t ever get $50,000 back in the event you divorce,” he explains. “But if you receive this inheritance as a Henson Trust, that trust in not divisible in the event you get divorced.”

Henson Trusts ... crucial for families with a member in receipt of provincial disability benefits, but so much more.

Where Will You Go ... What Will You Discover?

Wow ... I was updating the "Places To Be" section in the sidebar and was amazed pleasantly surprised at how much is happening in the next little while.  So much so, in fact, that I thought it might just be best to give it a little more visibility and post about it right here.

You might think this month is pretty well shot but don't be fooled, there's still four activities left for this last week of September. 

Besides the regularly occurring Social Night for Persons with Disabilities every Tuesday @ 4:00 and the Mental Health for All Coffee House running Saturday afternoons from 1:00 - 4:00 from now until December 3rd (both in Halifax), Ken Pope, LLB, TEP, Henson Trust Specialist is offering a live videoconference/webcast on Disabilities and Estate Planning this Wednesday, Sept. 28th from 10:00 am to 12:30 pm.

Topics to be discussed include ODSP eligibility and benefits, exempt asset arrangements, using and back filing the disability and caregiver tax credits, Registered Disability Savings Plans, legal guardianship and Powers of Attorney, Wills and Henson Trust arrangements, funding trusts with life insurance, RRSP rollovers to adult children with disabilities, Lifetime Benefits Trusts to receive RRSPs for children as parallel trusts, and planned giving, bequests, charitable remainder gifts and minimization of income tax on death from RRSPs.

Also on Wednesday (and yes, you can do both because this just happens to be in the evening), Nova Scotia Community College Disability Services is offering an Information Session for parents, teachers, guidance counsellors and students. The point of the session is to answer questions about the transition from high school to college for learners with disabilities including those who are on an Individualized Program Plans. Issues that will be explored include how to help someone with a disability apply to college, whether having an IPP makes a difference when it comes to applying to community college, what can be done now to get ready for college in the Fall, what resources are available at NSSC that students might find helpful and what funding is available for students with disabilities in post secondary education. And, of course, often the most pressing question for parents; "I know how to support my child in school - what's going to change now s/he is going to college?".

And that's just for September.

Future Planning for your Child with Disabilities - Part II

Having examined the issue of guardianship, we will now turn to financial planning for our children with disabilities.

Life Insurance
I have written previously about the importance of life insurance when planning for the future of your child with a disability. Think of it as your first line of defence. Or, perhaps, offence.

The first issue here is the type of life insurance you hold. Hopefully you have purchased whole life insurance as opposed to term insurance as term insurance will expire within a set number of years (20, for example) and after that, assuming you're still alive, you will no longer have any coverage.

In my previous post on this topic, you will read about "T 100" insurance" and "T100 joint and last" insurance. But the main point is this - look at your life insurance as not just a vehicle to protect your family in the event of your untimely demise (okay, is there really such a thing as a timely demise?!) but also as a source of funds to be placed in trust (or some other vehicle) to provide some amount of financial security for your disabled child in the future.

So, assuming you have term life insurance (with or without another source of funds for your child's future security), what is the best way to deal with these funds?

Unfortunately, when we get down to the nitty gritty, I must direct you to a financial planner, this being out of my area of expertise and everyone's financial situation being different.

I can, however, lay out a few known options for you.


The Henson Trust
I have written a fair bit on the Henson Trust in the past, so if you're not familiar with of what we speak, I would suggest you read my posts here.

Unfortunately (thanks a lot, Google Pages), many, if not all, of the READ MORE links in those older posts no longer work. And, in all honesty, I have neither the time nor the inclination to attempt to rewrite those posts at the moment (come to think of it, I very much doubt that I even have my old notes that so many of those posts were based on). So we will just have to do the best we can.

Most people are familiar with your typical garden-variety discretionary trusts, the ones you often see in Wills if a minor child is to be a beneficiary of the estate. Such a Trust allows whomever has been appointed as Trustee to decide what types of investments to invest in and whether and when to distribute money to the beneficiaries. We call such Trusts "discretionary" because the Trustee exercises his (or her) discretion in distributing the trust funds.

Buy the problem with your typical garden-variety discretionary trust for our children with disabilities is created by a regulation passed pursuant to the Employment Support and Income Assistance Act which reads as follows:

58 Trust Money
Where a sum of money is set aside in trust for an applicant or recipient or a spouse or dependent of an applicant or a recipient by a court or a person other than the applicant or recipient, assistance shall not be granted for the applicant or recipient where it is feasible to obtain support for himself or herself or his or her spouse or dependent child from the sum set aside.

A discretionary trust is caught by sec. 58 of the Regulations (and will thus end your child's right to obtain social assistance or other benefits under the Services for Persons with Disabilities program until the trust fund has been depleted) because with a discretionary trust, the beneficiary still has the legal right to go to court and have the Trustee's exercise of discretion analyzed to ensure that it has been exercised reasonably. And if the court finds that the Trustee has acted unreasonably, it can compel him to pay benefits to the beneficiary.

The Henson Trust, however, is a creature of a different sort. As what is known as an "absolute discretionary trust" (meaning that the Trustee cannot be compelled or forced to disburse money for the support of the beneficiary), your child, as the beneficiary of such a trust, will have absolutely no legal right to go to court and force the Trustee to provide any money to her. And, thus, it can no longer be said that it is "feasible" for the beneficiary of the trust to "obtain support for himself or herself".

Despite protestations from the Department of Community Services otherwise, the Henson Trust will should work to protect the beneficiary's access to government benefits in Nova Scotia. I say "should" because the issue has yet to be tested in court in Nova Scotia but the consensus of legal opinion is quite confident that, were it to be taken to court, the Henson Trust would not be caught by sec. 58. And this is a very good thing as it provides a vehicle to distribute those life insurance proceeds (along with any other assets) to your child without affecting their right to government benefits.

The one rather large "catch" with the Henson Trust, however, is that since the Trustee has been granted "absolute and unfettered discretion" (just a portion of the magic wording necessary to create a valid Henson Trust), theoretically, the Trustee could decide to never disburse any money from the trust to your child and there would be nothing that anyone could do about it.

For this reason, you will want to choose your Trustee with great care. You are giving them am immense amount of power over your child's life.

But all is not lost even if there is no one in your circle of family and friends whom you trust (or is willing) to take on this responsibility. A trust company can always be appointed as the Trustee. There are, of course, pros and cons to proceeding this way.

On the plus side, appointing a trust company may ensure experience, expertise, impartiality, understanding, permanence and availability. But on the other hand, trust companies don't work for free and their fees will, most likely, end up being paid out of the Trust itself. Also a trust company will, obviously, not know and understand your child and their needs the way a family member or close friend would.

But. If there are no other options, there are no other options. And, although I would strongly recommend you discuss your own personal financial situation with a financial planner, given the improved quality of life a Henson Trust can give your child over their lifetime, I would think it would be more than worthwhile to proceed with a trust company than to give up on the Henson Trust option completely.

For more information on the Henson Trust, I would highly recommend the following articles:

1. WILLS, TRUSTS, AND ESTATE PLANNING: A GUIDE FOR PEOPLE WITH DISABILITIES AND THEIR FAMILIES
   (Authored by Paul C. Strickland and Michelle Moro of Siskinds LLP)
   Covering Wills, Powers of Attorneys, the Henson Trust, Guardianship and what you need to think about before you visit a lawyer in regard to these topics, this article also covers in some detail the issue of picking the trustees for a Henson Trust.


2. The Henson Trust Handbook
   One thing to be aware of when reading the Handbook is that there is a definite slant towards the Ontario system and the rules under the ODSP system as to allowable assets are different than those in Nova Scotia.

Future Planning for Your Child with Disabilities - Part I

When one starts seriously considering the options available for parents who don't have anyone to succeed them in caring for their child with a disability, it qiuckly becomes obvious that we are talking about some very big shoes to fill.

And since future planning (whether or not you have anyone to succeed you) can cover a range of topics, from guardianship to life insurance, Henson Wills and RDSPs, I have decided to break the subject up into a series of posts.

In this first post, we will look at issues of future planning surrounding the guardianship of an adult child with a disability.


Guardianship
The issue of future planning around the guardianship of an adult child is not one faced solely by the parent who has no one else to succeed them in caring for their child. In fact, if there truly was not one individual available who was willing to act as a successor to a parent, the guardianship issue really becomes moot. The chips will indeed fall where they may. But because the above request was what got me thinking around this issue, I have decided to include this discussion here.

If you have (or plan to) obtain guardianship of your disabled child, you might want to consider what will happen in that regard following your death.

Although, generally speaking, a guardianship will be terminated when the guardian dies, there are certain exceptions to consider:

1. If co-guardians have been appointed, the guardianship will continue under the surviving guardian.
2. If the court has appointed an "alternate" guardian, the alternate automatically takes over when the guardian dies and guardianship continues.

This leaves a parent with two possible alternatives in regards to long-term planning and guardianship; namely, to apply either with a co-guardian or an alternate guardian.*

Although co-guardians are often spouses, an older sibling might make a good alternate guardian, provided they are of the age of majority at the time of the original guardianship application. Proceeding in such a manner would give the older sibling additional time to mature while the parent acts as guardian but would then allow the sibling to step in at a later date when the parent dies.

Of course, an alternate guardian need not be a sibling of the incompetent person and a co-guardian need not be a spouse; either could, theoretically, be any other individual with some relationship to the incompetent adult.

If neither a co-guardian or alternate guardian has been appointed, the guardianship will terminate when the guardian dies, leaving the incompetent person without a guardian. And contrary to what some might think, no government agency will automatically step in to fill this void.

Unlike Nova Scotia, the guardianship legislation in Saskatchewan allows a guardian to nominate a successor in their Will and when the guardian dies, the nominee will assume the role of guardian without further court order. Provision is made that the nominee must immediately notify the Public Trustee of the guardian's passing and then apply to court within 6 months for confirmation of their appointment as guardian.

That approach is much preferable to the situation here in Nova Scotia where the legislation does not provide any way for the guardianship of an adult to automatically continue following the death of the guardian. The only available solution would be for another individual to essentially start from scratch and apply to the court to be appointed as guardian just as the parent had.

However, if a parent with guardianship of their adult child was trying to plan ahead for their child's care after their passing, I might just make make the following suggestion. Please understand that I have no solid legal basis for what I am about to propose but I simply can't see any downside to proceeding this way and there's always a possibility it might just be beneficial.

The first thing I would suggest is that the parent find another individual who they feel would make a good guardian to their child in the event of their passing. Approach this individual and obtain their consent and commitment to apply to the court for guardianship of the adult child should the parent pass away.

Then (and this is the part of my proposal that has no support from the Incompetent Persons Act or anywhere else) I would suggest that the guardian include a clause in their Will setting out that on such and such a date they were appointed as guardian of their son or daughter and then identifying the other individual whom, upon their passing, they would wish to have appointed as guardian in their place. Such a clause would also include, in some detail perhaps, why, in their opinion, this named person would make a good guardian for their child.

Now, as I said, in Nova Scotia, there is no legal authority for the guardian of an adult to appoint another guardian in their Will, unlike the situation where a parent can appoint a guardian for their minor child after their passing. And, of course, even in the situation of the minor child, the court would always have the power to over-ride the parent's wishes and appoint another individual as guardian should someone contest the parent's nomination.

But I still can't see any downside to the guardian of the adult including such a provision in their Will, which the person whom they so named could then attach as an exhibit to their affidavit when they apply for guardianship. The named individual would still be required to go through the process of applying for guardianship, just as the initial guardian had, but, although the court is is no way bound to follow the wishes of the previous guardian, it might just be one more factor to tip the scale in favour of the court appointing this other individual as the new guardian. And, if nothing else, you can at least rest a little easier knowing that someone you trust has agreed to apply to be appointed as guardian of your adult child.

Just remember, though, that were a person to go to their lawyer with instructions that their Will be changed to include such a clause, they would no doubt immediately be advised that they had no power to nominate a successor guardian. In which case, the person would respond that yes, they were aware of that fact but thought it might just be worth the extra effort of advising the court of their thoughts on who would make a suitable successor guardian for their child.

The idea being that if the parent/guardian shows that they have given some considerable thought as to whom might make a good guardian for their adult child, the court might just give at least a little weight to their opinion on the matter.

Upcoming Upcomings

Lots of interesting things going on in these parts lately - just check out the heading "Places To Be - Upcoming Events" in the sidebar to the left.

But I thought I would highlight just a few.

One event I wish I could make but unfortunately can't is the Estate Planning for Adult Children with Disabilities session [sponsored by Support Services Group Co Operative Limited (SSG) and Halifax Association for Community Living] on Saturday, February 27th from 10:00 to 12:00 at the Seacoast Towers, 22-24 Dundas Street, Dartmouth NS.

George Clarke, a lawyer from Boyne Clarke, will present planning strategies to assist parents in leaving a legacy to adult children with a disability, without endangering public funding or programming. Guardianship and information on how to protect savings and guaranteed investments vs. non– guaranteed investments, as it relates to savings for your family and your dependent child will also be discussed. Insight will be shared on the types of investments that work well in trust funds. RSVP to James Baltus at 466-0230 or Jean Coleman at 463-4752 by February 25th. (Yeah, that's today).

It being tax season and all, the Disability Tax Credit is once again a hot topic. On Sunday, February, 28th, Megan Leslie, MP for Halifax will be hosting a Disability Tax Credit Presentation from 2:00 pm to 3:30 pm at Northwood Care Inc, Stadacona Room, 2615 Northwood Terrace, Halifax.

The Halifax Association for Community Living (a group which, if you're not familiar with them, you really should check it out) will be offering a Lunch 'n Learn session on the history and work of the organization on March 5, 2010.

There are not one but two Learning Disability Conferences in the near future.

The Annapolis Valley Regional School Board Learning Disabilities Conference Day (entitled "Unleashing the Potential of the Teenage Brain") is Saturday, March 27th at the Kentville Firehall. The registration deadline is March 12th. For more information or to register contact Gail Demmings AVRSB 538-4638 or email gail.demmings@avrsb.ednet.net.ca

The 2010 Nova Scotia Learning Disabilities Conference will be held on May 13th & 14th at the World Trade & Convention Centre in Halifax. Visit the LDNS website for more information and to preview this year’s list of speakers. Register by March 1, 2010 and you will be entered to win a day at the spa!

And last, but certainly not least, might I remind you that the NDP Consultations are continuing around the Province. This is your opportunity to voice your opinion as to how the government needs to support people with intellectual disabilities. You can visit the government website for directions on making your voices heard. But before you do, you might want to check out the responses from the Nova Scotia Association for Community Living regarding the 4 questions asked by Graham Steele, Finance Minister.

There you go ... don't say I never told ya!

Saving Now and Paying Later ~ Generic Will Kits

Surfing around the blogosphere this evening (when I really should be doing so many other things), I came across this piece at Sui Generis -- a New York Blog concerning online wills. Which - although as the name states is a New York legal blog - raises a very valid point.

I have been concerned for quite a while over the rising profusion of mail-order will kits. As pointed by Elizabeth Randisi at Sui Generis, although such Wills would most likely be adequate for some, a generic online (or mail order) document might completely "miss the mark" on a person’s estate plan. And equally generic "disclaimers" advising when one might require the services of a lawyer can often miss the mark as well.

We've already discussed the need for some very precise wording when it comes to protecting your beneficiary's government benefits when using a Henson Trust. As well as how important it is to ensure you find a lawyer who actually knows how to draft such a document properly.

So just in case you think these circumstances are likely to mix well with a mail order or online generic will kit, you might want to think again.

Just a word to the wise. And the cautious.

A Guide to Wills, Trusts and Estate Planning

I came across a nice article today on our favourite topic de jour.

WILLS, TRUSTS, AND ESTATE PLANNING: A GUIDE FOR PEOPLE WITH DISABILITIES AND THEIR FAMILIES

It covers Wills, Powers of Attorneys, the Henson Trust, Guardianship and what you need to think about before you visit a lawyer in regard to these topics. It also appear to cover in some detail the issue of picking the trustees for a Henson Trust, a very important point when you consider that you are giving the trustee(s) absolute and complete, 100% unfettered discretion as to how much, if any, of the funds in the Trust will actually be distributed to the beneficiary (likely your disabled child).

Although written by members of an Ontario law firm, Siskinds, the majority of it should translate out for the rest of the country. So go get a cup of coffee, sit back and prepare to be educated. Some more.

The other thing I have been hearing a fair bit lately locally is the question of "Who?". As in

"Who do I go to? Which lawyer should I go to in order to have this done?"

As I've noted before, not all lawyers are necessarily up to snuff in this area of the law. And you really do want to make sure you that you hire someone who can give you the best value for your money. Who will get it done right.

I've been hesitant to make concrete suggestions on the subject up until now. So let's try this. If you live in Nova Scotia and want to stay with a lawyer in this Province, I would suggest contacting your local disability organization [ie. Nova Scotia Down Syndrome Society, Schizophrenia Society, Epilepsy Association or other appropriate organization] and see if there is anyone they might recommend. If that doesn't work, I know that Mr. Paul Miller, a lawyer in Bedford, use to do a lot of this work. Having met him once and knowing his reputation, personally, I wouldn't hesitate to take this type of work to him.

And for the big bang, I can do no better than to recommend Mr. Ken Pope, he of the Disability and Estate Planning Seminar, whose presentation resulted in the majority of these posts. Mr. Pope is licensed to practice across the country, meaning that he can act as a lawyer in Nova Scotia or British Columbia, as easily as he can in Ontario. And seeing as he's the one that taught me the majority of what you've seen in these pages for the past few months, maybe not such a bad idea.

Protecting Your Child's Future With The Henson Trust

The Henson Trust was named after an Ontario man who wanted to pass his entire estate onto his disabled daughter. But if she became the sole beneficiary of the estate and therefore "owned" significant assets and/or property, the government would consider her ineligible for any social assisatance payments. Meaning, for example, that if she lived in Nova Scotia, she would be ineligible for any of those programs we discussed under the Province's Services for Persons with Disabilities Program.

However, the releveant regulations did allow a person in her position to have some money in hand and didn't hold it against a disabled person when a third party provided a discretionary benefit.

For this reason, Mr. Henson drafted his will so that his entire estate was transferred to three trustees to be held on his daughter's behalf. The trustees (and this is the oh so very important part) had the discretion to withhold or spend the income and capital to best serve the daughter's interests. For example, money from the estate could be used to buy her a TV or new clothes or pay for a chaperoned trip. And because these payments were considered discretionary benefits, she still qualified for government support.

What the will didn't do was give the daughter a legal claim to demand money. Unlike the traditional trust that parents often set up in their wills for their minor children, Henson's daughter would never be in a position to go to court and claim that the trustees were wrongfully withholding trust monies from her. It was precisely because she had no legal claim to the monies that the government could not treat the money as hers after she inherited it.

Despite this, the government still saw fit to withhold the daugher's social assistance after Henson died. Which meant that she that she (or more accurately her guardian) was forced to take the matter to court. The Ontario Court of Appeal ruled that the daughter was eligible for continued government benefits and ordered the payments to be reinstated. Unfortunately, it was a hollow victory for Henson's daughter as she died before the Court of Appeal could rule in her favour.

But it was a significant victory for the disabled.

READ MORE

Disability And Estate Planning Seminar For Parents And Families

Wow!

What more can I say?
An absolutely fabulous seminar put on by the Down Syndrome Society today. Kudos and many thanks to the Society for bringing in Mr. Kenneth Pope, an Ottawa lawyer who has a nation-wide practice devoted to trusts and disability issues.

I thought I knew most of this stuff. I really did!
Well, it turned out I knew some, but by no means, it all.

With discussions on

• the Child Disability Benefit portion of the Child Tax Credit;
  
• the Disability Tax Credit [did you know that you might well be able to claim it for a child with a learning disabiltity?];
  
• the Child Supplement to the Disability Tax Credit;
  
• the Caregiver Credit;
  
• ways to increase the Provincial benefits for your child over age 18 if he continues to reside at home with you);
  
• Henson Trusts [the particular type of trust you need to use to leave monies to your child in your Will if you don't want provincial benefits clawed back];
  
• what type of Life Insurance on your life will be most beneficial to your disabled child after your death; and
  
• the new Registered Disability Savings Plan

well, let's just say that Mr. Pope just gave me months of blogging material!

Personally, I've just learned about quite a few tax credits I haven't been claiming [both for one of my children and my mother]. And that I can now go back and open up for those claims, where appropriate, for the past ten years. Among many other things.

So stay tuned. There should be very some interesting stuff coming your way.

Update: For those that missed this great seminar, there is an upcoming "Disability Tax Credit Information Session" being offered at the IWK Health Centre in Halifax, NS, on Wednesday, November 13, 2007. Its being offered as part of a "Health Professionals: Lunch and Learn" series between 12-1:30 that day and later in the evening between 7:00 -8:30 as a "Parent Session". The speaker will be a representative from the Canada Revenue Agency.

As good as the "Disability and Estate Planning Seminar"??
I seriously doubt it. But if you missed the boat, so to speak, there does appear to be another canoe leaving the dock next month.

DISABILITY AND ESTATE PLANNING SEMINIAR FOR PARENTS AND FAMILIES

Apropos my previous two posts, by way of the Schizophrenia Society of Nova Scotia site, I just came across this little gem:

The Nova Scotia Down Syndrome Society is hosting a seminar focusing on Saving on Taxes, Protecting Inheritances and Maximizing Disability Support Benefits. The presenter is Kenneth Pope, LLB, TEP. (http://www.kpopelaw.ca/)

Saturday, October 13, 2007
10:00 am or 2:00 pm

Saint Mary’s University, Sobey Building, Room 265
923 Robie Street
Halifax, Nova Scotia

To View Poster, Click Here

Drafting a Will When There's a Child with Disabilities

That last post on Registered Disability Savings Plans reminded me of one other very important thing for a parent of a child with a disability to remember when it comes to the issue of financial planning.

It is VERY important to ensure that any Will you might execute in which you leave funds in Trust to your child with a disability be properly drafted so that your child will not be required to use up all of those trust funds before being eligible for even basic benefits from the Province.

Please remember that simply placing funds "In Trust", upon your death, for your child with a disability (much as you might do with a typical child) will likely NOT be sufficient to preserve your child's rights to collect social assistance benefits, or access other programs and services from the Province without cost, either as a child or an adult.

So whether you're just planning your estate or already have a Will drafted, please ensure that you double check with legal counsel knowledgable around the issue of drafting trusts for individuals with disabilities. Unfortunately, a mistake in that area is the type that's only found out too late for all involved.

If you would like more info around this issue, feel free to drop me a line by using the Contact info that can be found under the Profile link.