Estate Planning with Disabled Children
Neufeld Legal P.C. can be reached by telephone at 403-400-4092 or email Chris@NeufeldLegal.com
When parents are met with the challenge of raising and planning for their disabled children, whether such disability arise at birth or as they are growing up, it is important to attain appropriate professional advice. Proper legal structure of your estate for their well being is even more appropriate than when you have children that are capable of fending for themselves and asserting control over their own future. For disabled children will invariably require financial assistance, and the associated support that comes wtih such access to finances, to make their lives that much better (with comparable investment resources put to their benefit).
One of the more prominent estate planning strategies when there are disabled children or grandchildren is the Henson Trust, which is utilized to provide financially for a person with an ongoing physical or mental disability, whether during your lifetime or after your death, given the planning considerations that must be taken to ensure that the person’s entitlement to Alberta disability related income support and other benefits are not inadvertently jeopardized. Alberta's disability related income support programs and benefits (e.g., AISH - Assured Income for the Severely Handicapped) are income and asset tested, meaning that individuals cannot own certain assets or earn or receive income in excess of specified amounts. If these income and asset thresholds are exceeded, the person may be disqualified or ineligible to receive income support and other benefits until the excess assets are depleted, hence the need for appropriate legal planning arrangements, such as a Henson Trust (see more as to the judicial basis for Henson Trusts).
A Henson Trust is a trust (most frequently forming part of a parent's or grandparent's Will) that provides the trustees with the absolute discretion to distribute income and capital from the trust to the beneficiary as they see fit. The trustees have full control as to when, if and how much income or capital is to be paid to the beneficiary. The beneficiary of a Henson Trust has no vested interest in the income or capital of the trust. This means that they cannot claim or demand payments from the trust and, consequently, they are not considered to own the trust assets. Henson Trusts are subject to provincial legislation and regulations.
A Henson Trust can be set up as an inter vivos trust (established during your lifetime) or as a testamentary trust (established on death under the terms of your Will). A Henson Trust must be planned in advance as it cannot be settled by the beneficiary. There is no limit on the amount of assets that can be settled into or contributed to a Henson Trust. There may, however, be limits with regards to the distributions that can be made from a Henson Trust to the disabled beneficiary without affecting the beneficiary’s eligibility for income support and benefits. The usefulness of a Henson Trust may therefore be limited by provincial regulations which restrict the distributions that a beneficiary can receive from a Henson Trust without impacting the beneficiary’s income support .
Contact our law firm today to learn how our legal team can help you plan for the future or deal with the legal demands associated with the passing of a loved one. Contact our law firm at 403-400-4092 or via email at Chris@NeufeldLegal.com to schedule a confidential initial consultation.
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Henson Trusts. A Henson Trust is a trust (most frequently forming part of a parent's or grandparent's Will) that provides the trustees with the absolute discretion to distribute income and capital from the trust to the beneficiary as they see fit. The trustees have full control as to when, if and how much income or capital is to be paid to the beneficiary. Read more. |
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Inter Vivos Trusts. An inter vivos trust (also known as a living trust) is a legal arrangement created and funded during the lifetime of the settlor (the person creating the trust). The term "inter vivos" comes from the Latin "between the living" and as such is distinguishable from a testamentary trust, which is established on the death of the settlor. Read more. |
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Testamentary Trusts. A testamentary trust is a trust that is created by a person's will and comes into effect only upon their death. It is an alternative to distributing all assets directly to beneficiaries. Instead, assets are transferred to the trust, which is then managed by a trustee for the benefit of the designated beneficiaries. Read more. |
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Irrevocable Trusts. An irrevocable trust is a legal arrangement where the creator of the trust (known as the grantor or settlor) permanently transfers assets into the trust, giving up all ownership and control over those assets. Once established, an irrevocable trust generally cannot be changed, amended, or revoked without the consent of all beneficiaries, and sometimes a court order. Read more. |
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Asset Protection Trusts. An Asset Protection Trust is a legal arrangement designed to safeguard an individual's assets from potential future claims by creditors, lawsuits, or judgments. The core principle behind an asset protection trust is to legally separate ownership of assets from the individual who created the trust, making those assets less accessible to outside parties. Read more. |
IMPORTANT NOTE: This website is designed for general informational purposes. The site is not designed to answer specific questions about your individual situation or entitlement. Do not rely upon the information provided on this website as legal advice in respect of your individual situation nor use it as substitute for individual legal advice. If you want specific legal advice, you need to engage a lawyer under established legal engagement procedures that have been specifically agreed to by that lawyer.