A primer for individuals with disabilities and their families

While estate planning is worthwhile for all Canadians, the rules concerning eligibility for government benefits make the preparation of legal documents such as wills, powers of attorney and trusts particularly important for individuals with disabilities and their families.

Eligibility for Ontario Disability Support Plan (ODSP) benefits is based in part on the individual’s financial resources. With a few exceptions, ODSP recipients may not own assets in excess of $5,000 (this amount varies depending on marital status and number of children), and therefore any inheritance has the potential of suspending their benefits (including extended medical, dental and vision coverage).

There are number of ways to structure testamentary gifts in order to ensure continued eligibility for ODSP. Family members can establish discretionary trusts (up to $100,000) and absolute discretionary trusts (also known as Henson trusts) in a will. Testators can also ensure that any inheritance takes the form of other exempt assets (such as home to be used as a primary residence by the ODSP recipient or as contributions to a Registered Disability Savings Plan). These tools can be used together to avoid benefit suspension and to manage the financial security of an individual with a disability. Taking these simple steps today can ensure a safe, stable and secure tomorrow.