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Aug 11, 2024 · The benefits of establishing a trust for a disabled child are manifold. Primarily, it provides a secure financial foundation that can support the child throughout their lifetime. This is particularly crucial for autistic adults who may require ongoing care and support. Additionally, trusts offer protection from financial exploitation and ensure ...
Nov 13, 2023 · A Henson Trust is a provincially-regulated trust designed to help parents of disabled children support their children now and into the future without interfering with their ability to access government assistance. Because this money is held in trust, and can’t be spent by the individual it’s held for, the trust doesn’t contribute to the ...
Jun 16, 2022 · If you have a child with a disability and plan to leave them an inheritance, setting up a Henson trust for them will help to ensure that they do not lose their disability benefits. A Henson trust is a fully discretionary trust (that is, the trustee has full discretion as to when and what funds are given to the beneficiary) designed specifically ...
A Henson trust can help you strike the desired balance — maximizing the assistance your money can provide to your child after you are gone, while striving to protect their disability benefits as much as possible. You will have peace of mind knowing that your child will continue to receive appropriate support and benefits after your death ...
- Navigator
- Planning considerations and options for beneficiaries with disabilities
- Considerations when estate planning for a beneficiary with a disability
- 4. Minimize taxes
- Outright gift by Will or beneficiary designation
- Holding assets in trust
- Taxation of trusts with a disabled beneficiary
- (a) Qualified Disability Trust (QDT)
- (b) Preferred Beneficiary Election
- Choosing a trustee(s)
- RRSP/RRIF assets
- Conclusion
INVESTMENT, TAX AND LIFESTYLE PERSPECTIVES FROM RBC WEALTH MANAGEMENT SERVICES Please contact us for more information about the topics discussed in this article.
Regardless of your circumstances, it’s essential to have an estate plan that reflects your personal and financial situation, and safeguarding the interests of a spouse, children and other family members is generally a priority. In situations where there’s a beneficiary with a disability, there are often other considerations that must also be taken ...
When creating an estate plan that provides for a beneficiary with a disability, there are several considerations, including: Ensuring the financial security of your disabled beneficiary Determine the expenses of the intended beneficiary and if they have sufficient resources available to them throughout their lifetime to meet their financial needs...
You may wish to ensure that your assets are transferred to your disabled beneficiary in a tax-efficient manner. This may help you leave more to your beneficiary.
You may wish to make an outright gift to your disabled beneficiary through your Will or by beneficiary designation on your registered plan or life insurance policy. This may be appropriate if your beneficiary has a physical, rather than mental disability, and does not rely on income and asset-tested provincial disability benefits. Your beneficiary ...
common tool used in estate planning for a disabled beneficiary is a trust. The terms of a trust are usually set out in writing in a trust document. You can specify how you would like the property to be managed and when and how you would like the property to be distributed. A trust can be set up during your lifetime (known as an inter vivos trust) o...
Generally, income earned and retained in a properly structured inter vivos or testamentary trust is taxed at the highest marginal tax rate in the trust’s province of residence. If income can be and is paid or made payable A trust may be particularly useful where a beneficiary is not capable of managing their own financial affairs as the management ...
If a trust qualifies as a QDT, the income earned and retained in the trust may be taxed at graduated tax rates. A QDT is a testamentary trust that jointly elects, together with one or more beneficiaries under the trust who qualify for the federal disability tax credit (DTC)1, in its tax return for the year to be a QDT. To be a QDT for the year, sev...
AA trust and a “preferred beneficiary” (or the individual or organization legally authorized to make decisions on the preferred beneficiary’s behalf) can file a joint election to have some or all of the income earned and retained in the trust taxed in the beneficiary’s tax return at the beneficiary’s marginal tax rate. In such a case, the income co...
It is important to carefully consider who will act as the trustee(s) for any trust set up for your disabled beneficiary. Your chosen trustee will be faced with many responsibilities, including managing the trust assets, maintaining proper records and filing trust tax returns. You will want to consider your proposed trustee’s age, as you will want t...
As a general, rule, when you pass away, the fair market value of your RRSP/RRIF on death is included as income on your final tax return. Any income earned in your RRSP/ RRIF after your date of death will generally be taxed in the hands of the beneficiaries you have named on your plan (or your estate if you haven’t named any beneficiaries on your pl...
There are many different considerations when planning for a beneficiary with a disability. It’s essential to understand your beneficiary’s needs, mental capacity and, if applicable, entitlement to government assistance. From there, you can look to the tools and structures that may be most suitable in the circumstances with the help of qualified leg...
Nov 14, 2024 · A special needs trust may receive various assets, including cash, stocks, bonds, real estate, and insurance proceeds. For many families, the process of funding a special needs trust is ongoing for years or decades. 5. Request funds as needed. The beneficiary or their legal guardian is empowered to request financial support from the trust as needed.
People also ask
Do I need A Henson trust if I have a disabled child?
Can a trust preserve a beneficiary's entitlement to disability benefits?
What can a trustee do with my Child's Trust Funds?
Can a trust be set up for a disabled beneficiary?
How does a Henson trust help people with disabilities?
Can a disabled beneficiary vest in a trust?
Mar 19, 2024 · The Henson trust derives its name from the landmark case of Ontario (Ministry of Community and Social Services, Income Maintenance Branch) v. Henson 2. In that case, Mr. Henson had created a discretionary trust in his Will for the benefit of his disabled daughter, Audrey. The trust was drafted to give the trustee the absolute discretion in ...
