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.

Ah, Summer ...

There's nothing like the thought of those lazy, hazy, crazy days of summer, is there? Unless, of course, you've been unable to locate appropriate activities and respite care for your child. In which case, you have my deepest sympathies.

But before you throw all those used binders in the corner and toss carefully place this year's scrunched up copy of the IPP in a folder until September, I make one more humble offering to you.

If you're not familiar with Wrightslaw [or The Wrighslaw Way (their blog) or The Special Ed Advocate (their free e-newsletter], you really should be.

Pete and Pam Wright are Adjunct Professors of Law at the William and Mary Law School where they teach a course about special education law and advocacy and assist with the Law School's Special Education Law Clinic. Pete also happens to have dyslexia. They know of what they speak.

And in the most recent edition of The Special Ed Advocate, I came across some links I thought I should share. Even though it's the end of June.

So, at the very least, bookmark them and write yourself a note to look them up come September.

1. Can an IEP Meeting be Postponed?
2. Do Parents Have to Excuse Members of the IEP Team?
3. Do Nursing Services Belong in the IEP?
4. Who Can Override an IEP?

The first thing you might notice is the reference to IEPs as opposed to IPPs. It's an American thing, don't sweat it. After all, a rose by any other name would smell as sweet, right? [Tongue planted firmly in cheek.]

And although it's true there are definite differences between the Individuals with Disabilities Act [IDEA], (the American legislation relevant to special education) and our own, there are a lot of similarities, too.

The Nova Scotia policy is, in many ways, built upon a lot of the language in IDEA, witness the right in this Province to an "appropriate" education. The biggest difference, in my mind at least, between the two regimes is that the American legislation has teeth. Ours, unfortunately, not so much.

So although that means that Nova Scotia's Special Education Policy Manual will always take precedence (and is where you should always be checking for the final word), it's still worth your time to keep up (in at least a cursory way) with what's happening to the south of us by way of Wrightlaw.

And, with that, I am so done with school. At least until September.

My Two Cents

Many thanks for the various suggested blawg topics.

First up will be a post (or more likely a series of posts) concerning options for parents who don't have anyone to succeed them in caring for their child with a disability. Options, both financial and otherwise.

Much of which I believe I have at least touched upon before but this will (hopefully) put it all in one place.

Now all I have to do is get my act together and start writing.

So stay tuned.

By the by, yes, I have updated the blawg's look. And given the variety of different backgrounds now offered by Blogger, I might well keep shaking things up a bit before I decide to settle down again.

Just remember - new look, same content.

Hear Ye, Hear Ye

Thanks to PLAN and the Investment Education Fund, there is now a new Step by Step Guide (to becoming eligible, opening and managing your Registered Disability Savings Plan) available now for free download.

The Guide has been written and designed in plain language for people with disabilities and their families and will walk you through all the steps necessary for becoming eligible, opening and managing an RDSP.

All ten steps, in case you were wondering. Although to be fair, there's only six steps involved in actually opening the RDSP. The remaining four steps cover issues like investing your money, updating your Will, protecting yourself and planning the road ahead - all good ideas.

So use it. And pass it on to others who might use it. Pretty please.

A Penny For Your Thoughts

Yes, it's been a mite bit quiet around here lately.

And, no, I have neither forgotten nor lost track of the Legal Guardianship Kit.

It is, in fact, dare I say it ... complete.

But. I both want another lawyer to review it and to submit a copyright application before I let the not-so-little critter venture out on its own into the big wide world. So, for that, I'm afraid, you will have to wait just a little bit longer.

But I was wondering whether this might be a good time (since I seem to be a little less than inspired when it comes to ideas for blawg posts at the moment) to solicit ideas from the readership.

So here we go again.

If there is any topic in particular you would care to know more about, either in general or with a particular question ... speak now or forever hold your peace. Or, at least, until the next time my Blogging Muse goes AWOL and I solicit suggestions.

Just joking - feel free to suggest topics or ask questions any time. I was just trying to ... motivate you.

You can use the comment feature at the bottom of this post or drop me an email by following the profile link on the top sidebar.

And if not, I will just keep busy with other things. Until inspiration strikes again.

Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you.

'Special Needs as a Second Language'

Not exactly legal (although sadly there hasn't been much of that around here lately anyway) but I thought this was too good not to share.

Check out "Special Needs as a Second Language by Lori Miller Fox" where she shares with the rest of the world a glossary of special needs terms and their definitions.

Here's just a sampling:

• Go check on him, he’s too quiet – means go in and make sure he’s still breathing.
• We’re deciding where to go on vacation – means we’re researching the cities that have the best children’s hospitals.
• You’ve really grown, we need to get you something new to wear – means we need to make a trip to the orthotist.
• I’m good thanks – means I got more than three hours of sleep last night.
• I’m an animal lover – means I can no longer stand the sight of people.
• Yes, we are looking forward to graduation – means I’m going to be at home with my grown child and eat pizza every day for the rest of my life until one day they’ll find me buried under a mountain of stale pepperoni and greasy, tomato-stained cardboard boxes.
  He had a good day – means he stayed awake in school and didn’t hit anybody.

Now go check out the rest.

By the way, my two personal favourites:

• I have a school meeting – means don’t call me, or email me, or ring my bell for at least three days while I climb into my very deep hole and comfort myself with chocolate.


• You must be a new Medical Resident – means his name’s not Buddy, and I’m not your Mom and he’s not your Dad ***hole.

Update: The promised Legal Gaurdianship Kit nears completion. Just looking at polishing it up and filing for copyright. And then it will be all yours.

Yes, They Can

The Council for Exceptional Children holds an annual "Yes I Can!" competition.

This year 27 students were selected for excellence in one of nine categories: academics, arts, athletics, community service, employment, extracurricular activities, independent living skills, self-advocacy, and technology.



You can read about each of these individual's accomplishments on the CEC website.

And yes, two of them (Jake Anthony and Darlene Jakubowski) were Canadian. Interestingly, both from British Columbia. Something tells me that might just be significant.

At any rate, it reminds me of the old adage ... "Never Give Up".

H/T to the ed Week "On Special Education" Blog

Questions, Questions, Questions

I know, I know.

I am still not exactly being prolific in my writing over here - okay, I'm not writing much at all at the moment.

So, for now, I'm afraid you will have to satisfied with some tidbits, here and there, as they come.

Speaking of which, here's one for you - a RDSP Frequently Asked Questions sheet from Compas.

H/T to Adrian's comment at the RDSP blog

Practical Applications - Payments from the RDSP

I know that posts have been light (to non-existent) around here lately but I hope to remedy that soon. My excuses (such as they are) are my health over the last few months and the fact that I am still (at least semi) diligently working away on the Guardianship Kit. Which is nearing completion. Honest.

I can throw you this tidbit though (thank goodness for Jack and the rest of the crew at PLAN) - when and how payments can be made out of a RDSP can be a very confusing subject. In fact for many, including me, it's very tempting just to know there's a formula involved and skip the rest of it for now, deal with it when the time comes.

But knowledge is power. And in this case, it is important to know the limits of the RDSP. Don't get me wrong - I believe it is a very good vehicle for the disability community. But it can't be the only tool in your financial tool box. You really need to look at using the RDSP in conjunction with other tools (such as the Henson Trust, for example) in order to provide for the future.

But here's what I wanted to share with you - the RDSP blog has just posted a chart explaining how and when payments can be made out of the RDSP.

And please don't forget one of the most important points (which is not covered in this table) -just how limiting the formula is when it comes to the dollar amount of any lump sum payments taken from the Plan.

Good News on RDSP Front

I just moseyed over to the RDSP blog and came across some good news.

Apparently the most recent Federal budget dealt with the RDSP. Who knew?

First:

In recognition that families of children with disabilities may not be able to contribute regularly to their Registered Disability Savings Plan (RDSP), Budget 2010 proposes to allow a 10-year carry forward of Canada Disability Savings Grant (CDSG) and Canadian Disability Savings Bond (CDSB) entitlements. In event of delays of opening a RDSP as a result of the complex guardianship processes that are in place in some provinces, the proposed carry forward will preserve a
beneficiary’s entitlement to CDSGs and CDSBs so that they are available when a plan is opened.

Then:

In the Budget, the government is also encouraging all provinces to look at introducing more streamlined alternative processes to formal guardianship arrangements, such as those in place in British Columbia.

And finally:

To provide parents more flexibility in ensuring that their savings may be used to support a disabled child, when they are no longer able to support the child, Budget 2010 proposes to allow a deceased individual’s RRSP or RRIF proceeds to be transferred, on a tax-free basis, to the RDSP of a financially dependent infirm child or grandchild.

The rollover provisions not only offer a way to provide for a disabled family member after you're gone, but can also involve a potentially large tax saving - instead of the entire amount in an individual's RRSP or RRIF becoming taxable income the year they die, the funds can now be passed into an RDSP, with no tax payable. And when the funds are eventually withdrawn from the RDSP, they will be taxable in the hands of the beneficiary, at the beneficiary’s tax rate. You can get more information abut this at the RDSP blog.

Although as an aside, I might just note that although the RRSP rollover is certainly a step in the right direction, I, for one, would really like to see the federal government allow the rollover of RESPs into RDSPs for our kids.

The second change is the ability to carry forward entitlements for the Canada Disability Savings Grant and Bond for up to 10 years. Which means that someone opening a plan now will be able to claim the Grant for both 2008 and 2009.

Most of us are, unfortunately, pretty familiar with the issue around guardianship and the RDSP. And well aware that because the laws governing legal representation are provincial, unlike BC, families in Nova Scotia do not have the benefit of Representation Agreements.

And although PLAN has proposed various short term solutions to the federal government to deal with this issue, the feds apparently prefer for it to "be done right" and wait for the provinces and territories to make the necessary legislative reforms. The new carry forward rules will at least mean that people will not be penalized while we await movement on that issue.

For each province to implement something resembling British Columbia's Representation Agreement does appear to be the best option. As noted on the RDSP blog, people with disabilities, families, seniors and others who have used Representation Agreements certainly seem to report positive experiences with these Agreements.

And as also noted on the RDSP blog, Canada's recent ratification of the UN Convention on the Rights of People with Disabilities should provide an added incentives for provinces to take another look at the Representation Agreement.

And, so, it marches on.

Live and in Person ... aka Shameless Self Promotion

And if that's not enough to scare you away, nothing will.

But just in case anyone is still interested, I will be giving a presentation on "Legal Capacity and Supported Decision Making" (aka "Guardianship - Do I Need It and How Can I Get it Without Losing an Arm and a Leg?") next Saturday, April 17th, 2010 @ 10:30 at the Alderney Gate Public Library, 60 Alderney Drive, Dartmouth.

The presentation is courtesy of the HACL so I thank them for that.

If you're even a semi-regular reader of this blawg, you will know the general direction in which I will be headed with this. In which case, what you just might find more interesting novel than anything I have to say is the first hand experience of a fellow parent who recently obtained guardianship of her son without a lawyer.

So I hope to see you there. Bring your thoughts and concerns. Ask your questions. We will do the best we can.

Update: And yeah, that Guardianship package, still a work in progress. But it is progressing. I still have another week, right?

Update II: Apparently registration is filling up fast. Which might have been one thing I forgot to mention - you can find registration details here.

Bringing The Baby Home .. At Long Last

For what it's worth (and in the disability community it's worth is certainly debatable), the Personal Directives Act comes into force today.

The "much awaited" regulations can be found here.
[Also for what they're worth.]

Health Minister Maureen MacDonald said the new legislation goes beyond instructions for health care.

She said people will be able to assign someone to make sure their wishes for personal needs such as recreation and hygiene are followed.

"It means that people, and particularly, I imagine, people who are older or persons with disabilities, with perhaps some kind of a condition that has a degenerative element, would have the security of knowing that how they wish to be treated will be respected."

And that, right there, would appear to be the critical thing.

For a person with a degenerative condition, this legislation could be very useful. And for seniors planning ahead, much as one would have a Power of Attorney as part of an estate plan, so too would it make sense to have some form of personal directive, both for health care and other issues.

Enter the Personal Directives Act.

Meaning it's probably a good piece of legislation. For what it is.

As long as no one confuses it with what it's not. As some surely will.

That being said, if you're looking for information as to exactly how the process works under the Act ...

As of Thursday, forms will be available through the Justice Department website or through Service Nova Scotia offices, said Health Department spokesman Ryan Van Horne.

There will be two forms, one to appoint a delegate and the other to outline details of expected care and treatment. A booklet explaining the act also will be available.

"The Personal Directives Act covers a wide range of things, including personal-care decisions," Van Horne said.

"For example, if you are admitted to a nursing home and you are a vegetarian, you could ensure that you get a vegetarian diet or that you got fresh air for an hour a day."

Well, let's hope the legislation is good for a little more than just maintaining your vegetarian diet in long-term care.

Which, of course, it is. I just couldn't resist the snark, it seeming like such a strange example to give.

And as to why exactly it's taken so long to actually become law, welcome to politics in Nova Scotia.

The act was passed in May 2008 after it was introduced by Cecil Clarke, who was then the justice minister in the Conservative government. MacDonald couldn’t say why it has taken almost two years for the act to take effect, but she said regulations had to be written and staff in health-care settings and elsewhere had to be trained in the new rules.

Van Horne said officials had hoped to bring the act into force last fall but it got sidelined by the H1N1 crisis.

Yeah, those regulations. They are, after all, both lengthy and substantial.

Well, we can, I suppose, chalk at least one thing up for our beleagured NDP government.