Introducing ... Exceptional Family

I've always been a big fan of the Exceptional Parent magazine. Its got lots of good info on almost every aspect of daily living when you have a child with a disability. Medical research, products available, legal info ... only problem is, its all American. And as is often the case, there never seems to be a Canadian equivalent.

So I was very pleased and surprised to come across the Exceptional Family magazine recently. Yes, Virginia, it is Canadian.

Apparently its a quarterly publication (published four times per year) and has been around for a couple of years.

In her first editorial published in the inaugural issue in the fall of 2005, Aviva set out her mandate as Editor:

As a public resource, Exceptional Family was born to unify the special needs community that often feels isolated, misunderstood and marginalized. As such, it will serve as both a reference and support network for exceptional families in search of validation of their unique emotions, challenges and experiences. In addition to the publication’s parent audience, EF will also serve as a resource for medical and mental-health professionals who wish to be on top of the latest research and developments within the exceptional population.

For his part, Warren who accepted to act as Publisher of the new magazine, describes the venture as “an exciting opportunity to reach out and connect not only with our clients and their families, but to the broader population of exceptional people and service providers.”

He vows to “break the silence and stigma surrounding disabilities…to serve as the communal voice of strength and inspiration.”

I've only read halfway through the Fall 2007 issue but so far I'm pleased. No, its not Exceptional Parent but it is Canadian!

Here are some excerpts from Fall 2007 Issue:
Going the distance

Sexuality in the schoolyard

Dentistry for Exceptional Families

Cracking the code

From The Editor: At the risk of sounding cliché

The RDSP Comes To Life

Pulled from the comments on The RDSP ... Boom or Bust? post:

Hi Michelle, Just thought that I would let you and your readers know that Bill C-28 was tabled in Ottawa on November 21st. Among other things, the Bill will create the RDSP. I've got a bit more information at my blog: http://rdsp.wordpress.com/
Cheers, Jack

That's Jack Styan, Executive Director Planned Lifetime Advocacy Network (PLAN). As I've said before, check them out.

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

We've been discusssing the Henson Trust over the last couple. Today a look at another practical issue around the use of a Henson Trust.

Validity of the Henson Trust in Nova Scotia

Apparently the Department of Community Services (DCS) takes the view that Henson Trusts are not valid in Nova Scotia. In other words, go ahead and set one up if you want, but you are wasting your time and money. Because we will take the view that your child has access to assets and thus they will be ineligible for benefits.

Here is the 'scoop' on that, according to Mr. Pope. And remember this when you go to a lawyer to create a Henson Trust, either in the context of your Will or otherwise (which we will discuss later).

Discretionary trusts will not protect your child's access to government benefits.

A discretionary trust is a type of trust where the Trustee is given discretion as to what types of investments to invest in and as to whether and when to distribute money to the beneficiaries. This type of trust is fairly common in a Will where one of the beneficiaries is a minor. Even though with this type of trust, the Trustee has the discretion to decide whether or not to distribute money to the beneficiary, this won't be sufficient for our purposes. Because with a discretionary trust, the beneficiary (your child, in this case) would still have 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 find that the Trustee has acted unreasonably, it can compel him to pay benefits to the beneficiary.

You will recall , however, that the Henson Trust is an absolute discretionary trust, meaning that the Trustee cannot be compelled (forced) to disburse money for the support of the beneficiary. In other words, 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. Theoretically, the Trustee could decide to never disburse any money from the trust and there would be nothing that anyone could do about it. But that is the crux of the matter, the good and the bad. That lack of control by your child is what is required to protect their access to government benefits. And also, incidentally, why you will want to choose your Trustee with great care. You are giving them a lot of power over your child's life.

So why is the Department taking the view that Henson Trusts are not valid in Nova Scotia and we are telling you otherwise?

READ MORE

Spin Me Some Magic ... Henson Trust Magic

We talked about the need for precicely correct wording in drafting a Henson Trust. Almost 'magic wording' ...

That your lawyer needs to know .

• the Trustee must be given "absolute and unfettered discretion"
  
• "shall not vest" ... no share of the income or capital of the Trust shall vest in the benificiary
  
• "the only interest he has shall be the amount paid to him ..."

Also, the usual practice would be to make "a gift over", meaning that after the child (the beneficiary of the Trust) dies, anything remaining in the Trust will pass to someone else.

Next up, we will look at the current status of the Henson Trust in Nova Scotia.

That's all for now, folks ...

**Once again, with grateful acknowledgment to Mr. Ken Pope and the Nova Scotia Downs Syndrome Society for 'bringing him to town'.

Using The Henson Trust Now ... Not Later

Last time we were discussing the Henson Trust, what it is and why it is so very important for our children. Now we will take a look at a couple of practical issues around the use of a Henson Trust.

What if my child has assets now and I need to protect their government benefits now?

In addition to its use in a Will, a Henson Trust can be used as an inter vivos trust vehicle ... meaning a Henson Trust can be used while the settlor (that's you or whoever owns the assets) is still alive. A person can set up a trust for someone else outside of a Will, while they are still alive. And you can use a Henson Trust to do this.

There was one gentleman at the Disability and Estate Planning Seminar who had created a Henson Trust for his son a few years ago. He wanted to test the trust while he was still alive to fight it, just in case there was be any difficulty with the Department of Community Services (DCS). Despite having been told by the DCS that a Henson Trust would not allow his son to keep receiving government benefits, there has been no problem. This supposed issue with the DCS will be discussed in a later post.

If you want to set up a Henson Trust for your child while you are still alive, into which you would presumably transfer assets now as well as anything your child will become entitled to under your Will after your death, make sure that you consult a lawyer. One who is familiar with Henson Trusts and what is required.

As always, and as stated in the side bar, nothing written here is meant to be taken as legal advice or opinion. Its general information. Always consult with a lawyer as to th specifics of your indvidual family situation.


**With grateful acknowledgment to Mr. Ken Pope and the Nova Scotia Downs Syndrome Society for 'bringing him to town'.

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

Big News ... SPD Policy Documents Now Available

All Good Things Come To Those Who Wait...

At least that's what they say.
And they might just be right.

I am very pleased to report that the actual policy documents for the Direct Family Support, Independent Living Support and Alternative Family Support programs are all now available on the Department of Community Services website.

General information on each program can also be found on the DCS website here, here and here.
And, of course, on this blawg ... DFS, ILS, AFS and SPD Progam -What's In A Name.

Your Mileage May Vary... Increasing Provincial Benefits for the Adult Child who Lives at Home

In a recent post, I noted the discrepacy between what we were advised at The Disability and Estate Planning Seminar and the contents of the relevant portion of the Canada Revenue Agency site. And I suggested that it might be prudent for a person interested in claiming that particular credit, the Caregiver Credit, to consult with a tax lawyer.

The same advice might well apply here. I'm just going to pass on what we were told at the Seminar. Which went something like this:

If your adult child with a disability lives at home with you, he or she will be eligible for a certain amount of "provincial benefits". However, if that same adult child were living in some other environment, such as a supported living environment like a group home, they would be eligible to receive a much higher amount.

[Ed. note: We know that under the SPD policy, the child who lives at home would receive benefits pursuant the Direct Family Support policy and the child living in a different situation would receive benefits under the policy appropriate to that situation.]

You can increase the amount you receive for your adult child who lives at home by having that child enter into a written lease with you. Make the lease payment slightly higher than the provincial shelter amount and the child will become eligible for the increased benefit. Although the Department of Community Services may tell you that in order for your child to be eligible for the "shelter amount", they must live in a self-contained unit, you can point out that many individuals who live in rooming houses receive the shelter amount. And although the Department may not be too happy with situation, it is said that you should have a pretty good chance of success if the child can help with shopping and cooking. And even if it doesn't work, its still worth a try as you've lost nothing.

If you're interested in knowing what the provincial shelter rate is at the moment, go here. Scroll down to the bottom of the page. The "shelter allowance" is the very fist item under Appendix A. But remember, I am just passing on information on this one. As I said in the title, your mileage may vary ... which may be why God invented lawyers in the first place.


**With grateful acknowledgment to Mr. Ken Pope and the Nova Scotia Downs Syndrome Society for 'bringing him to town'.

Update: I neglected to mention that, both as I understand it and as set out by Mr. Pope, you will not be required to report the monies paid to you by your adult child on your Income Tax Return as you are providing support to a dependant. But its always good to double check with your accountant and lawyer.

Legislation, Regulations and Policy ... Oh My!

We were previously discussing taxation credits for individuals with disabilities and their families. And today, I planned on taking a further look at provincial benefits. Until I realized that we might need a slight bit of background first.

We've already looked at some of the programs available under Nova Scotia's Services for Persons with Disabilities Program. But before a government institutes any program, policy or service there has to be, in theory at least, some grant of power for them to do so. In other words, there has to be some form of legislative authority which authorizes or allows them to do whatever it is they are doing.

For example, the provincial government receives its authority for the Servcies for Persons with Disabilities program from two pieces of legislation;

1. the Employment and Income Assistance Act (what people formerly thought of as the Social Assistance Act) and
2. the Homes for Special Care Act.

In addition to the legislation (the statutes as set out above), the government will also often enact regulations under each statute. The statute gives the broad outlines of what the government can and cannot do and/or what you and I as citizens are allowed and not allowed to do. The regulations made under each of the above statutes fill in the some of the details that are missing from the Acts themselves. Both statutes and regulations have the force of law.

Beneath those you will often 'policy' or 'guidelines" for various programs. Generally speaking, policies do not have the force of law. Which is part of the reason why, for example, in the Dassonville decision we discussed earlier, the Nova Scotia Court of Appeal found that the government must look at individual circumstances and cannot simply apply policy in a blanket manner.

You can almost think of it as a painting. We will start with a paint by number:

• The statute sets out that black and white outline which will eventually turn into a picture.
• The regulations tell you what colour goes with what number so you can starting painting in the right colour in the right spot.
• Beyond that, policies or guidelines would give you more rich detail (which shade of blue goes here, is that light brown or dark brown in this square). Maybe not the best analogy, but hopefully you get the picure.

In the next few posts, we are going to look at some of the regulations made under the Employment Support and Income Assistance Act. Regulations that affect how much money your adult child will receive if you keep him or her at home and how any assets that a disabled individual has [or even has access to] affects their eligibility for provincial benefits under programs such as the Services for Persons with Disabilities Program. And how you, as a parent, can work with that in your child's best interests when drafting your Will.

The Caregiver Credit ... Tales from the Disability and Estate Planning Seminar, Part II

Continuing yesterday's discussion of taxation credits for individuals with disabilities and their families...

If your child with a disability is over the age of 18 years and lives with you, you may be eligible to claim the Caregiver Tax Credit (Line 315 on your Income Tax Return). This is in addition to the Disability Tax Credit (DTC) which we discussed yesterday. In this situtaion, you are claiming the DTC as transferred from the individual with disabilties (assuming that they will not need to use it to offset their own tax payable). The Caregiver credit, however, is not transferred from the person with a disability; this credit belongs to the parent/caregiver.

The amount of the Caregiver credit is based on the income of the person with disabilties. As the disabled person's income exceeds $13,700, the amount of the credit will start to reduce.

One thing to keep in mind about the Caregiver credit is that you might want to broaden your view from just that of your disabled child. For example, if you have an elderly parent who has been "dependent on you due to mental or physical infirmity" and they have spent a week or two living in your home (perhaps after being discharged from the hospital), you might be able to claim the Caregiver credit there as well. In fact, as I understand it, it may not even be necessary for the person to have lived with you at all through the year, as long as they are in some sort of de facto dependency situation with you.

From reading the CRA website, it appears that the person does not need to even qualify for the DTC in order for the Caregiver credit to be claimed. In fact, the website appears to read that if the person is "your or your spouse or common-law partner's parent or grandparent, born in 1941 or earlier" you can qualify for the credit, without the person actually being "dependent on you due to mental or physical infirmity". Its reproduced here below. Read it yourself and see what you think.

One rather important issue here, however...

READ THE REST

**With grateful acknowledgment to Mr. Ken Pope and the Nova Scotia Downs Syndrome Society for 'bringing him to town'.

The Disability Tax Credit ... Tales from the Disability and Estate Planning Seminar

I sincerely hope everyone reading this knows (or at least thinks they know) about the Disability Tax Credit (DTC).

It gives a nice size tax credit to an individual with a "profound impairmant" resulting in them being "markedly restricted" in any of the basic activities of daily living. It can be used by the taxpayer (to offset their taxable income) OR transferred to another "supporting" relative, such as a spouse (or, in the case of a child under the age of 18 years, to a parent or guardian).

If you're not familiar with this tax credit, please contact Canada Revenue Agency and ask them about it. And do not be discouraged if you are told that it is very hard to qualify for or that based on what you have told them, it wouldn't apply. Maybe yes, maybe no... Ask them to send you a T2201 Form (a form which both the taxpayer and the disabled individual's physician must fill out) anyway or download it from the website. When the form comes, take it to the person's doctor (or specialist if available) and see what they think.

But here are a few additional points that even the 'knowing' may not realize:

• even if the disabled person is living indepedently (ie. in a group home or other supported living situation), you may well still be able to claim the DTC. This will turn on a question of fact; namely whether or not the taxpayer is in a "supportive" relationship with the disabled individual. This can include such things as whether or not you buy them clothes occasionally, take them on trips with you or whether they come to spend a few days with you when they are ill.
• when you do apply for the DTC, keep in mind that it can be back-dated, not just to the date of the individual's diagnosis but for up to 10 (ten) years. Think about it, many types of disabilities are life-long, from birth, even if they weren't diagnosed until much later.
• If you are the parent or other supporting relative of a child with a disability under the age of 18 years and you're already claiming the DTC, check last year's Income Tax Return or pick up the phone and call CRTC and make sure that you are claiming not just the DTC but also the "child disability" portion of the credit. This will take the tax credit from roughly $6,000 to $10,000.
• Did you know that a learning disability may be sufficient to qualify a person as eligible for the DTC? Although I had heard a few comments here and there on the subject, it was mostly news to me. And if you have one child with more severe physical or mental challenges for whom you are already claiming the DTC, it may not have even occurred to you to think about this for a second child with a learning disability (guilty as charged).

And don't forget, the DTC not only gives the taxpayer a good-sized (and much appreciated) tax credit, it also has a very positive effect on the monthly Child Tax Benefit (what we use to know as "Family Allowance") as a "child disability benefit supplement" will be added to the monthly cheque for each child who has been accepted for the DTC. Even if your family income disqualifies you from receiving the Child Tax Benefit, you can still qualify for the child disablity benefit supplement if you are claiming the DTC for the child. And any move from no monthly cheque to a monthly cheque has got to be a good thing!

If you have not applied for the Child Tax Benefit for your child, but have already filed Form T2201, complete and mail Form RC66, Canada Child Benefits Application, to your tax centre. The CRA will determine whether or not you are eligible for the Child Tax Benefit and the Chid Disability Benefit supplement.

This child disability benefit supplement came into effect in 2003, meaning that if you get your child accepted for the DTC now or in the future, there should be a lovely retroactive effect to your Child Tax Benefit.

As a general note, I would suggest you check out this page to see what else persons with disabilities can claim as a deduction or a credit. You should also check out the Medical and Disability - Related Information - 2006 Guide.

**With grateful acknowledgment to Mr. Ken Pope and the Nova Scotia Downs Syndrome Society for 'bringing him to town'.

Update: And remember that any legal fees you incur as a result of qualifying yourself or you dependant for the DTC are generally tax-deductible. Which means that if you find yourself running into difficulty with the CRA, hiring a lawyer to do the job may not be such a bad idea.

Update II: For more info on this subject, search the labels appearing at the bottom of this post.

I Know ... I Know...

Never fear, I haven't forgotten.
How could I?!

The material from the Disability and Estate Planning Seminar I was gushing about will be next up. I just wanted to finish up our look at the Services for Persons with Disabilities program first.

Done!

So give me a couple of days to catch my breath and it will be onward and upward. I am thinking early next week ... Sunday or Monday.