Henson Trusts Available in Alberta!
For a number of years, estate planning lawyers in Alberta were frustrated by the inability to adequately protect the members of a client’s family through the client’s will or trust, when a family member was receiving or might receive benefits through the Assured Income for Severely Handicapped programme of the Alberta Government (“AISH”).
AISH provides benefits for eligible persons who through disability are unable to provide for their own needs. These benefits can provide a living allowance, childcare benefits and personal and health benefits including things such as prescription drugs, dental and optical care, diabetes supplies, emergency ambulance, or adaptive equipment and other “aids to daily living”.
In other provinces, you could create a trust fund for your child to assist them to enjoy additional comforts and supplement their living allowance even if receiving government benefits like AISH, by creating a fund for them called the “Henson Trust”. Until 2020, you could not do that in Alberta.
Previously in Alberta, if a trust fund was set up for the benefit of a family member who was receiving or who might receive AISH, the full value of the fund was considered an asset of the family member. If the fund resulted in certain assets held by the family member being more than $100,000.00, AISH benefits were no longer available. For many, the loss of the disability income was not critical, but the loss of government funded extended health care benefits and prescription costs left the family member in dire circumstances.
As of January 1, 2020, that changed in Alberta. New legislation was enacted which changed that policy.
A lawyer can now set up a fund or “trust” in the will of a client or create a trust during the client’s lifetime so the family member can be paid an amount from the trust at the total discretion of the fund manager. The fund manager must have full discretion about the amount of income and/or capital from the fund they pay to the family member. The family member cannot be entitled to the whole income or capital, or to demand payments. Following the death of the family member who was receiving AISH, the fund must be distributed to another person or entity.
Since it is important that this trust is set up in a particular way you should retain a lawyer if you want to include a Henson Trust your will or wish to create one during your lifetime. A lawyer can also advise you about what you should consider so that you name an appropriate fund manager or “trustee”.
There are some other options available to provide for a child with special needs, and a lawyer with knowledge in this area can provide advice on how to best do this.
For those who may have a family member who is receiving or may receive government disability benefits and other entitlements, 2020 may be an opportune time to update your will to include a Henson Trust.
Submitted by Sylvia A. Carruthers,
SAC Law
