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Protecting Social Benefits for Children with Disabilities

By Carrie Brunet Duncan

Caring for a child with a disability is more than a lifelong commitment, and parents can ensure their loved ones are supported even after their passing with the right preparations, says Ottawa disabilities and estate planning lawyer Kenneth Pope.

The creation of a Henson Trust will allow parents to bequeath assets to a child without affecting their ability to receive disability benefits or services, says Pope, principal of Kenneth C. Pope Law.

Families often come to Pope early on for assistance in securing disability and caregiver tax credits, Ontario Disability Support Program applications, or establishing guardianships, and they build a long-term relationship, as they navigate the needs of their child with special needs throughout their lifetime, he says.

“It starts when the child is first diagnosed,” Pope tells AdvocateDaily.com. “As they get older, parents need advice suitable to the child’s age and the new programs they have to become involved with — new hoops they have to jump through.”

Eventually, caregivers have to consider what their end of life will look like as their child carries on without them, he says.

That’s where Henson Trusts come in, Pope says.

“Henson Trusts are a type of testamentary trust that is uniquely useful for people with special needs,” he explains. “Through the trust, the child with special needs can inherit an unlimited amount from their parents, but they don’t lose their housing, community supports, or their health and dental benefits.”

The trust requires an executor and a trustee, and choosing the right individuals to fill these roles is crucial to ensure the child receives their inheritance in a timely manner and that it is managed properly, Pope says.

The executor is responsible for ensuring the estate is received by the heirs, while the trustee administers the Henson Trust for the child who might not be able to manage it on their own, he says.

In choosing an executor, it is preferable to select someone who is a Canadian resident, Pope says. If the trustee does not live in this country, the trust would be deemed to reside in the other country, pay taxes there, and to have a non-resident beneficiary.

“It’s important that they choose someone who is honest, diligent, reasonably intelligent and prepared to take advice from the estate lawyer,” he says.

Families often choose a sibling as the trustee, which Pope says can be problematic depending on the relationship the siblings share.

“They have to keep in mind if there were youthful rivalries between the two, or if the neurotypical child feels they didn’t get as much as their sibling, it could be problematic,” he says.

The trustee has absolute authority over whether or not to disburse any of the funds to the recipient, and they often receive what’s left when the beneficiary passes on, Pope adds.

As with all estate planning, he says establishing a well-thought-out plan early will save money and headaches down the road.

“Many parents who have a child with disabilities lose sleep or suffer from anxiety because they are concerned for the child’s future,” Pope says. “What will happen to my child when I am gone?”

For the one in 10 families in Ontario who have a child with a disability, talking to a specialist who knows how to navigate Henson Trusts will ensure the child is properly cared for and that they do not lose out on essential services when they receive their inheritance, he says.

Published with the permission of AdvocateDaily.com

 

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