Disabilities and Estate Planning By Kenneth C. Pope Barrister & Solicitor.

Disabilities and Estate Planning

By Kenneth C. Pope

Barrister & Solicitor

Ken Pope• Practicing since 1980.

• Helps families with special needs deal with tax and disability issues.

• Specializes in Estate planning for families with disabilities.

• Creates Henson Trusts to provide for children and protect benefits.

• Deals with problems created when inheritance not left in Trust.

Inheritance and Disabilities

• ODSP recipient can lose benefits.

• Properly prepared Trust necessary.

• Trust can be used in conjunction with government benefits.

• Better quality of life.

Statistics

• 1 in 8 families in Ontario effected.

• Solutions to the inheritance problem are available.

• Many families have successfully set up Henson Trusts.

Other Choices

• Do nothing and wait.• Leave nothing while

you wait.• Leave more to one

sibling.• Use the wrong Trust.

Henson Trust

• Absolute and unfettered discretion of the Trustee.

• Non-vesting provision.

• “Even-hand rule” reversal.

• “Inter Vivos” (during lifetime) or “Testamentary” (created by Will) Trust.

Origins

• Case law precedent is 1000 years old.

• Henson Trust also known as a “vow of poverty Trust”.

• Originally created to protect families’ assets when member entered the Church.

History of Henson Trust• Unique Trust created for

disabled daughter.• 1989 Court of Appeal in

Ontario, original trial judgement upheld.

• 1993 ministry provided in Policy and Procedures Manual for MCSS staff that Henson Trust is not benefit recipient’s asset.

Planned Giving

• Charitable tax receipt can greatly reduce taxes.

• More money to charity and less to government.

• Can help protect the value of an estate for the beneficiary.

Taxes and Disability Benefits

• Disability amount will be $6000 in 2001.

• RRSP / RRIF : No tax roll-over to child.

• $708 and $930 - Room and board versus rent and supplementary benefits.

• Disability tax credits retroactive to 1988.

Exempt Assets

• Liquidated assets - $5000 limit issue.

• Life insurance - cash value / death benefits.

• $100 000 - ODSP regulations.

• Exempt status issue.

• Offset of income against benefits.

Further Information

• Email: [email protected]

• Phone:1-866-KEN-POPE or 1-613-567-8230 - direct line.

• Web site: www.kpopelaw.ca

• Online or onsite seminars.