- Henson trust
A Henson trust (sometimes called an absolute discretionary trust), in Canadian law, is a type of trust designed to benefit disabled persons. Specifically, it protects the assets (typically an
inheritance ) of the disabled person, as well as the right to collect government benefits and entitlements.The key provision of a Henson trust is that the
trustee has "absolute discretion" in determining whether to use the trustasset s to provide assistance to the beneficiary, and in what quantity. This provision means that the assets do notvest with the beneficiary and thus cannot be used to deny means-tested government benefits.In addition, the trust may provide
income tax relief by being taxed at a lower marginal rate than if the beneficiary's total assets were considered. It can also be used to shield assets from matrimonial division in case ofdivorce of the beneficiary. In most cases, the trust assets are immune from claims by creditors of the beneficiary.The Henson trust was first used in
Ontario in the late 1980s. It became of wider interest when theSupreme Court of Ontario ruled in 1989 that the trust assets were not vested in the beneficiary and thus could not be used to terminate government benefit programs.A Henson trust can be established as either a
living trust , or a testamentary trust.The case
Leonard Henson of
Guelph, Ontario had set up an absolute discretionary trust for his daughter. The Ontario Ministry of Community and Social Services took his daughter to court , arguging that she had assets. The Supreme Court of Ontario (later theOntario Court of Appeal ) ruled that she didn't have assets, as they weren't for her to use. [ [http://www.kpopelaw.ca/TDplanner.htm Henson Trust Specialist - Kenneth C. Pope, LL.B., T.E.P: TD Planner Magazine Article ] ]References
* [http://www.professionalreferrals.ca/article-1250.html Duties of a Trustee of a Henson Trust]
* [http://www.blakes.com/english/publications/ET/Mar03/hensontrusts.asp Henson Trusts: Providing for a Disabled Family Member]
* [http://www.kpopelaw.ca/TorontoStar.htm Toronto Star]
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