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Henson Trusts: Preparing for the Future

What is a Trust?

A trust is a legal arrangement where someone sets up an account to help someone else, called the beneficiary. The account is in the name of another person or persons. These persons, the trustees, must use the money or assets in the trust for the benefit of the beneficiary. The person who sets up the trust is called the settlor. Usually the settlor is a parent, some other relative, or a friend of the beneficiary. A settlor can also be the beneficiary of a trust. A trust may be set up while the settlor is living (an ‘inter vivos’ trust) or in the settlor’s will (a ‘testamentary’ trust). The person or persons who manage the money and assets are called the trustees. The bank account or assets are in the trustees’ names, but the trustees must use them for the beneficiary. If you use a trust for your relative with a disability, you must make sure that the trustees are reliable and honest.

When planning for the well being of our sons and daughters with disabilities, we are usually attempting to protect their entitlement to government support programs. The Henson Trust (also referred to as the Absolute Discretionary Trust) is used for that purpose.

Setting up a Henson Trust

Parents will often set up the Henson Trust in their wills. However, a Henson Trust can be set up by people who want to take care of a relative with a disability during their own lifetimes. This often happens where parents divorce and make a trust as part of the divorce settlement.

A Henson Trust gives the trustee absolute discretion to pay or not pay income and capital to the beneficiary. This means that the trustees are the only ones who can make decisions about giving money to the person with a disability or paying for things that will benefit him or her.

A Henson Trust can allow the trustees to pay money only to the person with a disability or to other beneficiaries as well. The other beneficiaries could include the other daughters and sons and grandchildren of the person who set up the trust. The trustees could invest the assets and allow income from the trust to build up. They could give more or less income and capital to each beneficiary.

Choosing a Trustee

Since a Henson Trust is an absolute discretionary trust, it gives the trustees a huge amount of responsibility. You need trustees who are honest and whom you can trust completely. Be very careful when you choose the people who are going to be the trustees. Look for someone who:

  • is highly involved in the relative’s life and has an ongoing concern in their health and welfare
  • will be sensitive to what the beneficiary needs and wants
  • will understand the terms of the will and why you set up the trust
  • understands ODSP rules and how payments from the trust could affect the beneficiary’s ODSP benefits
  • can invest the money wisely so that there will be enough assets in the trust for what the beneficiary needs, over the long-term as well as meeting immediate needs
  • will be careful with money in the trust and make payments that will help the beneficiary
  • has good judgment and business sense
  • knows how to keep careful records and accounts
  • knows how to prepare tax returns or arrange to have them done

Consider that when family members or friends act alone as trustees, they do not always act in the best interest of the person with a disability. When a trustee is also a beneficiary of the trust, they can be in a conflict of interest and not make wise or fair decisions.

Funding a Trust

Once we have determined that we wish to provide for our son or daughter with a disability through the use of the Henson Trust, we need to turn our attention toward how we are going to provide money to the trust. There are a variety of resources within the reach of most families which can be used to fund the trust. They are:


The establishment of a regular savings program may be able to provide adequate funds to Henson Trust.

Parent’s Estate

Provided that the parent’s estate is sufficiently large, it could provide for their own needs in their elder years, as well as having enough left over to fund the trust.

Family Members

Siblings, Aunts and Uncle’s, Grandparents could be willing and able to provide money to fund the trust.

Life Insurance

For the average family, life insurance may be the only way that they can leave a large lump sum to the trust by making small monthly payments. It is also possibly the only way of funding a trust that is guaranteed. The other resources mentioned above may not always be available but a paid-up life insurance policy can guarantee future funds.

Families of people with disabilities should examine the benefits and pitfalls of each of the funding methods mentioned here. A review of these resources with an Estate Planning Professional who specializes in planning for people with disabilities would be an excellent starting point.

Helping Your Relative Plan for the Future

Here are some suggestions to help you get started:

  • Talk to your family member with a disability about her or his personal goals, priorities, plans, and wishes.
  • Talk to other family members and friends.
  • Talk to the director or supervisor of the agency providing services to your family member with a disability.
  • Talk to caseworkers or caregivers who know your family member with a disability well on a day-to-day basis.
  • Investigate the services and supports that may be available to the person in the community. This is especially important for parents whose daughter or son has lived at home with them their whole life, to begin to explore residential options.
  • Many parents find that it helps to talk about issues with other families who have faced similar challenges. If you are involved with a disability organization or service provider, ask if they have a ‘peer support’ or ‘parent-to-parent’ group or program. If they do not, find out if they can refer you to one.

Who Do I Contact for More Information?

Special Needs Planning Group assists families in establishing plans which will provide their family members with a disability with a decent quality of life for their entire lifetime while at the same time, preserving their entitlement to government support programs.

Visit the website at:

To find the regional office of the Ontario Ministry of Children, Community and Social Services, go to:

For information about home care, through the Local Health Integration Networks (LHINs):

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