Article from the June 2012 edition of Dickinson Wright’s Estates & Trusts Legal News
By Kathleen A. Strachan
In drafting his Last Will and Testament, Leonard Henson established an absolute discretionary trust to allow his disabled daughter to benefit from his estate while still preserving her entitlement to government assistance. The Will transferred his estate to three trustees and gave them the absolute discretion to withhold or to spend the income and capital of the trust in whatever way would serve his daughter’s best interests.
Upon his death, the Ministry of Community and Social Services stopped paying benefits to his disabled daughter. The Social Assistance Review Board, the Ontario Divisional Court and the Court of Appeal all overturned the Ministry’s decision and held that the definition of “assets” did not include a person’s beneficial interest in a trust in which the trustees have an absolute and unfettered discretion, and in which the person had no right to demand payment of the income or capital of the trust.
In determining whether or not a Henson Trust is a suitable planning option for a client, consideration should be made regarding the beneficiary’s age, the nature and value of the client’s assets, the nature of the beneficiary’s disability, and whether the disabled beneficiary wants to continue to receive Ontario Disability Support Program benefits.
