Henson trust and ODSP

by Miriam
(thornhill, ontario)

hello -

I have known a married couple for many many years. Husband not on ODSP just CCP. wife on ODSP - Husbands mother 'passed' on recently and lawyer advised an Henson trust to the mother before she passed on and the sister of the husband to be trustee.

It seems - after I have searched - that if the husband receives some money (discretionary - up to 5,000/yr via the sister) that the odsp will remove monies from the wife's benefits. we have spoken to a couple of people where this has happened. the husband is worried if something happens to him there would be no money for her. We thought it would be in succession but it seems the lawyer had advised the late mother that it should not go to the wife because she would lose benefits (even though she loved the wife dearly) and should go to the son - there again is a problem - he is adhd and on medication. No sense re money matters. The family could not do without the wife of the person who has inherited (nothing received to date). The wife looks after all the finances and etc. She is partially blind and nearly totally deaf but does math in her head and house is spick and span and in order and computer literate.

Appreciate any suggestion. Should some monies go into an Insurance Policy or GIC's or something.

thank you so much for your assistance.

miriam

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Lawyers and insurance...like oil and water
by: Brian Poncelet, CFP



"the husband is worried if something happens to him there would be no money for her. We thought it would be in succession but it seems the lawyer had advised the late mother that it should not go to the wife because she would lose benefits (even though she loved the wife dearly) and should go to the son - there again is a problem - he is adhd and on medication."

lIFE INSURANCE SOLVES MANY PROBLEMS, TAXES, BENEFITS,CASH FLOW ETC.

www.disability-tax-credit.ca

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Henson Trust and ODSP
by: Graeme Treeby

Thank you for posting your questions to this site. Your friends' are a typical example of how complicated life can be when depending upon ODSP for assistance.

Before any suggestions can be made, there are a number of issues that need clarification.

Firstly, up to $6,000 per 12 month period per member of the ODSP benefit unit can be received without any claw back by the ODSP. This means that the Trustee of the Henson Trust can provide up to $12,000 per 12 month period without having an impact on the ODSP benefits. (assuming that both are registered as part of the benefit unit) In addition, unlimited amounts of money can be given out of the Trust as long as they are used for disability related items as outlined in the ODSP Policy Directives. If the Henson Trust is large enough, many years of extra money could be shared with the husband and wife in this situation.

The question about succession needs to be explored further. A Henson Trust is designed to allow an inheritance to be given to a person on ODSP without causing them to give up their benefits. In a situation like this, a typical Henson Trust would name both the husband and wife as beneficiaries. If one were to die then the trust would continue to provide funds to the remaining person. To make further comments on this, I would need to see a copy of the actual trust document. Miriam, if you wish, you could email me a copy at graemetreeby@sympatico.ca (DO NOT POST IT ON THIS LIST.)

After a careful examination of what exactly is stated in the Trust document, there may be some recommendations that can be made.

As indicated by the previous poster, Life Insurance may well be part of the solution to address the concerns of the husband. However, it may also be that the Henson Trust will be part of the solution if it has been set up with both people as beneficiaries.

I look forward to hearing more of the details so that I may be able to offer some suggestions.

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Hensen trust and ODSP
by: Miriam

good morning Mr. Treeby:
I appreciated your comments - May 25.
To clarify -
Just the wife is on ODSP.Meaning that the husband can receive the 6,000 PER 12 MONTHS BUT does that mean they will be removing this amount from the wife ODSP cheque.
Looks like you believe that an insurance policy might work? CAN it be put in the wife's name? At least this would look after the succession item.
But, how would the husband do this? If the trust is the responsibility of the sister can she give the dollars to the husband (brother) to prepare an insurance policy for the wife. or does the sister (because she is the trustee)have to 'purchase' a life insurance for the brother's wife. (STATES IN THE WILL 'AT HER DISCRETION') At least the wife is partially covered.
At least this way some of the money can be used for themselves - they are frugal - then they don't have to worry about the money going directly to the son (I mentioned on medication, unpredictable and ADHD. Wife looks after all finances etc.) Of course the son will be looked after they love him dearly but are worried about this also.
thanks again for your input.
Have a super day!
Miriam

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Hensen trust and ODSP
by: Miriam

good morning Mr. Treeby:
I appreciated your comments - May 25.
To clarify -
Just the wife is on ODSP.Meaning that the husband can receive the 6,000 PER 12 MONTHS BUT does that mean they will be removing this amount from the wife ODSP cheque.
Looks like you believe that an insurance policy might work? CAN it be put in the wife's name? At least this would look after the succession item.
But, how would the husband do this? If the trust is the responsibility of the sister can she give the dollars to the husband (brother) to prepare an insurance policy for the wife. or does the sister (because she is the trustee)have to 'purchase' a life insurance for the brother's wife. (STATES IN THE WILL 'AT HER DISCRETION') At least the wife is partially covered.
At least this way some of the money can be used for themselves - they are frugal - then they don't have to worry about the money going directly to the son (I mentioned on medication, unpredictable and ADHD. Wife looks after all finances etc.) Of course the son will be looked after they love him dearly but are worried about this also.
thanks again for your input.
Have a super day!
Miriam

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