Planning for Disabled Beneficiaries Across Canada



Cross Country Expedition: Probate and Incapacity Planning & Administration across Provincial Boundaries

Estate Planning and Persons with Disabilities: Use of Trusts in Ontario and other Canadian Jurisdictions

Lana Kerzner, ARCH Disability Law Centre

Laurie Letheren, ARCH Disability Law Centre

Susan J. Stamm, Goodman and Carr LLP[1]

May, 2006

I Introduction

“Canadian families are united by the common concern: ‘What will happen to our relatives with disabilities when we die?’”[2] Family members often want to take whatever steps they can to ensure that after they die their dependants will be financially secure. Persons with disabilities fear that when those who support them die, they may receive an inheritance that will jeopardize their entitlement to necessary government supports.

Many persons with disabilities rely on the support of family members and others. Depending on the circumstances, this may include financial support as well as assistance with making decisions and activities of daily living. The potential loss of financial stability and independence when a death occurs weighs heavily on the minds of both persons with disabilities and those who support them.[3]

The ultimate challenge for the estates lawyer is to find a method for transferring wealth in a manner that maximizes the person with a disability’s financial status and at the same time is consistent with the wishes of their client (e.g. family members or support people). Often persons with disabilities receive social assistance benefits and the creation of a trust may be a way to achieve this end. However, this is not the only option available. Lawyers should take into account the specific circumstances of the person with the disability, their supports, relevant laws and jurisdictions when assisting their clients with estate planning.

Provincial disability-specific social assistance laws and programs are the main focus of this paper. More specifically, this paper examines specific types of trusts that are often created to protect a person with a disability’s entitlement to social assistance benefits. The program that many Ontario estates lawyers may be familiar with is the Ontario Disability Support Program (“ODSP”). This paper will examine this program as well as comparable programs in other provinces and territories in the context of the creation of trusts as a vehicle for protecting the interests of persons with disabilities.

A discretionary trust, often known in Ontario as a “Henson Trust”, is a common device used by estate practitioners in Ontario when doing estate planning that involves beneficiaries with disabilities. This type of trust provides a vehicle for passing on wealth to the beneficiary with a disability without jeopardizing his or her entitlement to disability-specific social assistance (i.e.ODSP benefits in Ontario).

Canadian families are often dispersed across the country. Consider the following circumstances:

- A grandparent, aunt, uncle or family friend in Ontario wishes to transfer wealth to a person with a disability who lives in another province

- Parents are separated and living in different provinces. The Ontario-based parent wishes to transfer wealth to his/her adult child with a disability who lives in a different province.

In this paper we will consider how the transfer of certain assets and in particular the creation of a trust might affect a beneficiary’s entitlement to access government disability-specific social assistance in provinces and territories across Canada.

II Importance of Estate Planning in relation to Persons with Disabilities

According to Statistics Canada approximately 12% of Canadians report having some level of disability. Additionally, the disability rate rapidly increases as age increases.[4] This means that every estates lawyer will almost certainly encounter issues of significance to persons with disabilities in his/her practice, often by representing a client who has a disability or an individual who provides financial and other supports to a person with a disability. It is therefore incumbent on each estates lawyer to be aware of the laws and programs which affect persons with disabilities, including income support programs.

Persons with disabilities have lower incomes and higher levels of unemployment than persons without disabilities.[5] Individuals with disabilities therefore often rely on social assistance. However, the level of income provided through social assistance is unacceptably low.[6] It is not sufficient to allow persons with disabilities to lead a comfortable and decent lifestyle. It is in this context that there is a strong desire, and indeed necessity, to assist relatives with disabilities who are on social assistance.[7]

III General Estate Planning Considerations for Persons with Disabilities

Harry Beatty, in his paper “Estate Planning for Beneficiaries with Disabilities in Ontario: Inheritances, Trusts and the Ontario Disability Support Program”[8], provides a helpful checklist of questions an estate planning lawyer should ask of a testator seeking to benefit a beneficiary with a disability. Mary Louise Dickson, Rod Walsh and Orville Endicott in The Wills Book[9] provide a thorough discussion of the importance of estate planning for disabled beneficiaries.

One of the important areas for an estate planning lawyer to cover is the beneficiary’s past and current source of income, especially disability-related income, and particularly, whether the disabled beneficiary is on ODSP. For a disabled beneficiary in another province, it is important for the estate planning lawyer to consider whether the disabled beneficiary is on a similar asset and income tested program in another province.

Financial planning for a beneficiary with a disability is a small piece of the picture. Other issues such as where the beneficiary will live, his or her education, employment, social life, recreation, health care, support services, personal care and assistance with personal decision-making should also be considered.

Choice of Trustee

Beatty, Dickson, Walsh and Endicott all note the crucial importance in the choice of a trustee when a beneficiary is disabled. It is often prudent to have more than one trustee be chosen, with provision for the appointment of replacement trustees. The group of trustees should together have the following traits:

(a) a personal interest in, and respect for the beneficiary;

(b) ability to understand the terms of the will and/or trust;

(c) expertise to discharge their responsibilities in managing the trust property;

(d) sufficiently knowledgeable to be able to invest the trust fund wisely;

(e) careful and organized to keep accounts of their administration of the trust property;

(f) a willingness to do the necessary work to understand the disability benefits regime from which the beneficiary is receiving benefits; and

(g) trustworthiness.

A conflict of interest should be avoided. For example, it is usually not ideal for the trustee who is to inherit the residual interest of the trust to be a trustee on his or her own. Where the trust capital is significant, where there is any concern about a choice of trustee, and/or where it is expected that the trust will continue for many years, using an institutional trustee might be a good idea. It is often a good idea to combine an institutional trustee with a trustee who knows and cares about the person with a disability.

Dependant’s Support Claims

Where inadequate provision is made for a disabled beneficiary in a will, a disabled beneficiary (or his or her attorney or guardian) can resort to Part V of the Succession Law Reform Act[10] . In circumstances where the disabled beneficiary is unable to bring his or her own application, an application can be brought under s. 58(3) of the SLRA by the Ministry of Community and Social Services, in the name of the Minister, among other public bodies, so long as the public body is providing income support such as ODSP.

Part V of the SLRA gives the court a very wide latitude in dealing with these claims. Beatty notes, however, that “it has been the practice of the Ministry for many years to refrain from bringing this type of application. The authors query whether the Ministry could bring such an application which could potentially have the effect of jeopardizing the entitlement of the disabled person to ODSP.

Recently, in Reid v. Reid[11], one of the decisions considering the Ontario Court of Appeal’s decision in Cummings v. Cummings[12] an ODSP recipient with a disability and her two children brought an application for dependents’ relief under Part V of the SLRA. The only asset was the deceased’s home worth $240,000[13], and the deceased’s will divided her estate equally between the woman and her brother. The woman had been able to function in part because she was comfortable in the home and its surrounding neighbourhood. The court ordered that the estate was to remain open and the estate was to maintain title to the house until further court order. A mortgage was to be placed for up to 50% of the value of the house to pay outstanding bills and to help maintain the lifestyle of the woman and her children. $25,000 was to be paid to the brother as full and final settlement of his inheritance. At the woman’s death, the house was to be sold and the net proceeds divided between her children.

Even though, in Reid, the court used Part V of the SLRA to create a favourable estate plan, we note that the legal fees of the litigation (charged to the estate, no doubt) likely exceeded the costs of putting in place an appropriate estate plan in the first place, and no doubt caused great misery and stress to those concerned. Further, the issue of how the house-owning trust created might affect her ODSP benefits. For these reasons, it is not recommended to rely on a Part V of the SLRA application to take care of disabled beneficiaries. Most estates cannot afford the litigation caused.

Age of the Beneficiary

The various social assistance programs for persons with disabilities of the Canadian provinces and territories discussed in this paper provide supports to persons who are adults; however, the estate plan must consider the effect that a bequest may have on a minor child with a disability when he or she becomes an adult. As Beatty notes, the child’s entitlement at 18 may be affected by a bequest made prior to that time.[14]

In addition, if a non-disabled minor is to receive assets or income from an estate, the plan must consider the effect that the asset disbursement may have on a parent if he/she is a recipient of social assistance.

IV Estate Planning in Context: The Structure of Social Assistance Programs in Canada

To fully understand the importance and rationale for planning asset distribution in a manner that protects a person’s entitlement to social assistance benefits, it is important to understand how social assistance programs are structured.

Social assistance for persons with disabilities is part of general social assistance schemes in Canada. Social assistance programs, sometimes referred to as welfare, have been described as the income programs of last resort. Through these programs money is provided to individuals whose resources are not sufficient to meet their needs and who have exhausted other avenues of support.[15]

Each Canadian province and territory has its own social assistance program. In Ontario and Alberta, the programs which provide benefits for persons with disabilities are separate from general social assistance programs. However, in each of the other provinces, the benefits for persons with disabilities are provided as part of the general social assistance program. Each program is governed by Acts, regulations and policy manuals.

There are many commonalities between the social assistance programs in each of the provinces. Each program provides income support. Many provide other benefits as well, such as coverage for drugs, dental care and assistive devices. They are governed by complex rules which include eligibility criteria, specific definitions of “disability” and tests for disability determination, rates of assistance and appeals.

A determination of initial and ongoing eligibility and entitlement to benefits will include a calculation of a recipient’s assets and income. There are most often complex rules regarding exemptions from these calculations and the amounts to be included. Most programs exempt some types of assets and income but these differ across provinces and territories. It is under these asset and income exemptions that discretionary and other trusts would be tested in the context of social assistance programs. Because each province and territory has its own rules regarding assets and income, trusts and the income that a trust may generate are treated differently under social assistance programs in the different provinces and territories. In most instances, the legislation will not specifically exempt a discretionary trust from asset calculation but the definition or description of the assets and income to be included in benefits calculations will determine whether the asset or income should arguably be exempt. Under the various schemes, the legislation may use such terms as “owned”, “liquid”, “available for distribution”, “can be converted into cash” or “can be realized”, when describing what is to be included.

As is noted below, when planning for distribution of an estate one must consider both the nature of the asset and the impact that any income from the asset may have on the beneficiary’s eligibility for social assistance. If the estate provides for the purchase of an asset that may be exempt under the specific legislation that is relevant to the beneficiary, one must also consider whether the beneficiary will be able to maintain the asset using the social assistance income. If the estate were to provide a source of income that could be used to maintain the asset, those payments could be considered to be income to the beneficiary and his or her social assistance could be reduced or terminated. The same could occur if the asset itself produces income.

It is important to understand that there could be serious ramifications to the beneficiary if the estate plan does not consider the ODSP income and asset rules. In Ontario for example, a person’s benefits under ODSPA could terminated even while the estate planner may be trying to redistribute assets to meet the ODSP rules. Once terminated, the beneficiary might be required to re-qualify for assistance. This could involve a very long wait while the Ministry determines whether the beneficiary still qualifies for ODSP benefits as a “person with a disability”. While the beneficiary awaits this determination he or she may be forced to apply for assistance under the Ontario Works Act[16] which provides a recipient with much less monthly income and has much stricter asset and income rules.

V The Ontario Disability Support Program

This section provides only general information about the Ontario Disability Support Program (ODSP). It is intended to give the background necessary for understanding the interaction between ODSP, estate planning and the use of trusts in Ontario. The following resources contain more detailed information about ODSP:

• Dianne Wintermute, “Ontario Disability Support Program: Income Supports” (July 2005), online: ARCH Disability Law Centre [Wintermute, “Income Supports”].

• Harry Beatty, “Advising the Ontario Disability Support Program Recipient or Applicant who has received an Inheritance or Insurance Proceeds” (July 2005), online: ARCH Disability Law Centre, ibid. [Beatty, “Advising”]

• Harry Beatty, “Estate Planning for Beneficiaries with Disabilities in Ontario: Inheritances, Trusts and the Ontario Disability Support Program” (July 2005), online: ARCH Disability Law Centre, ibid. [Beatty, “Estate Planning”].

Ontario’s social assistance program for persons with disabilities is called the Ontario Disability Support Program (ODSP). The governing legislation is the Ontario Disability Support Program Act[17]. There are important and detailed regulations to that Act[18] as well as ODSP Income Support Policy Directives[19]. The Directives set out the Ministry of Community and Social Services interpretation of the statute and regulations and guide Ministry staff in their delivery of the program. These are very detailed and are an important information source that must be consulted when ODSP issues are relevant. It is important to keep in mind that they are revised and updated from time to time. It is particularly important to refer to Directive 4.7, “Funds Held in Trust” (April 2005), when doing estate planning that involves a person with a disability.[20]

ODSP has both an income supports component and an employment supports component.[21] The provision of financial assistance for persons with disabilities is through the income support component. This paper addresses income supports only as it is this aspect of the program that is relevant to estate planning and trusts for persons with disabilities.

ODSP is a financially-tested program. Financial eligibility is determined by considering both assets and income. The rules relating to these are complex. This paper contains only an overview of aspects that may be relevant for estate planning. Reference should always be made to the ODSPA, its regulations, and ODSP policy guidelines which specifically address assets and income.

There is a limit to the amounts of assets that a recipient of benefits under the ODSPA is permitted to hold and still remain eligible. Currently they are: $5000.00 for a single person, $7500.00 for a recipient and his/her spouse, and an additional $500.00 for each dependant child or adult other than a spouse.[22] Subject to the discretion of the Director, the asset level may be increased to allow the purchase of an item necessary for the health of a member of the benefit unit, or disability related items or services.[23]

There are a number of items which are exempt assets for the purpose of ODSP and which do not affect entitlement.[24] It is the sections of the regulations governing income and assets which are important to consider in the context of estate planning. Some of the asset exemptions are as follows[25]:

• The total cash surrender value of a life insurance policy to a limit of $100,000.00, as well as a trust fund created or derived from an inheritance and/or the proceeds of a life insurance policy to a limit of $100,000.00, provided the value of an insurance policy together with the capital of a trust does not exceed $100,000.00

• a person’s interest in the principal residence

• a second property if approved for the health and well-being of the recipient or other members of the benefit unit

• the value of a person’s interest in a motor vehicle of any value

• a second motor vehicle valued to a maximum of $15,000 if needed by a dependant for work

• a prepaid funeral of any value.

Under the regulations income is stated as “adding the total amount of all payments of any nature paid to or on behalf of or for the benefit of every member of the benefit unit[26]” and this has been interpreted to be very broad in its inclusions but there are a number of exemptions to this rule as well.

The amount that an individual receives in income support is calculated once it is determined that he/she qualifies. The level of income support varies with factors such as the number of people in the family or “benefit unit”[27] and with shelter costs. For example, the maximum monthly payment to cover shelter and basic needs costs for a single person is $957.00 per month if the person is a tenant and $730.00 per month if the person lives with his/her family.

In addition to income support, ODSP recipients receive important coverage for health and disability-related benefits. These benefits include coverage under the Ontario Drug Benefit Program, a basic dental program and funds for various medical supplies, assistive devices and special diets.

It is important to know that there are additional criteria to qualify for ODSP other than the financial ones set out above. These are not directly relevant to estate planning so they are not set out in this paper.[28] Generally to be eligible, applicants must meet the definition of “person with a disability” as defined under ODSPA or qualify under a prescribed class.[29]

An individual must be 18 years old to receive ODSP. Generally, eligibility ends at age 65 when the person can receive benefits from the federal Old Age Security/Guaranteed Income Supplement system. However, people over age 65 who do not quality for OAS/GIS continue to be eligible for ODSP.

VI Trusts as an Estate Planning Vehicle for Persons with Disabilities: Jurisdictional Comparison

When advising a client in estate planning, one must be aware of the province or territory where a beneficiary with a disability may be resident. Each province and territory has its own social assistance scheme that may provide income support to the beneficiary. These social assistance schemes may also provide additional benefits such as employment supports, disability supports and may cover the costs of medications and other health related items.

When the estate has a beneficiary who is a person with a disability, the lawyer should be familiar with the legislation and policies of the province or territory that pertain to assets and income of a recipient. Not all provinces and territories exempt trusts from asset calculations and the types of other assets or income that may be exempt from the calculation of financial resources also vary across the country. One must be careful that the best intentions of clients do not result in the loss of the income and benefit source of the beneficiary.

What is a Henson Trust?

A “Henson Trust” is an absolute discretionary trust created for a beneficiary with a disability. The name originates from a 1987 case, The Director of Income Maintenance Branch of the Ministry of Community and Social Services v. Henson[30]. In Henson, the testator, Leonard Henson had, in his will, created an absolute discretionary trust for the support of his daughter, Audrey. Audrey had been receiving benefits under the ODSP predecessor, the Family Benefits Act[31] (“FBA”) The Ministry stopped providing her with benefits on the grounds that the discretionary trust fund was a “liquid asset” as defined by the regulations made under the FBA that put her assets over the allowable limits.

The decision to stop her disability payments was overturned by the Social Assistance Review Board and the Divisional Court (upheld by the Ontario Court of Appeal). In the Court's view, the will gave the trustees absolute and unfettered discretion to pay out funds to the recipient or not, as they saw fit. The recipient could not compel the trustees to make payments to her if sufficient funds to meet her needs were not available to her under the FBA. Therefore, the recipient did not have a beneficial interest, as that term was used in the FBA definition of "liquid assets". The court determined that this was not a case where the testator's intention should be overridden on some grounds of public policy. To do so would do violence not only to the will itself, but also to the plain language of the regulation in issue. An appeal of this decision was dismissed by the Court of Appeal in a very brief endorsement. Unfortunately, Audrey passed away by the time the Court of Appeal decision was released so it was a pyrrhic victory for her.

The keys to an effective Henson Trust are twofold: (1) proper drafting; and (2) proper administration. First, the trust must be drafted to be absolutely discretionary. Second, the trustee(s) administering the trust must be aware of any relevant legislation and policy directives.

Henson Trusts may be set up in wills but can also be set up inter vivos. This would permit the settlor of the trust to observe the trust at work, while he or she is alive, and can be involved in its initial administration.

Henson Trusts can also be used to create a future for a beneficiary with a disability when he or she will no longer need to receive ODSP benefits. In the circumstance where the beneficiary of a Henson Trust is likely to live for a significant amount of time, the trustee could permit the trust funds to grow in the Henson Trust and pay out very little at first (keeping in mind the accumulation rules that may impact). Ultimately, however, the Henson Trust funds could be paid out disqualifying the person from public assistance. In such a scenario, the government program subsidized the growth of the fund by paying the benefits during this time[32].

Henson Trusts are not the Only Option

There is no single type of estate plan or trust that will be suitable in each situation. It is crucial that the estate plan be tailored to the specific circumstances of each person with a disability. For example, a Henson Trust might not be appropriate in the following circumstances:

1. Disability-specific social assistance programs such as ODSP may not be relevant to all persons with disabilities. For example, due to tight eligibility criteria, many people are not eligible to receive such benefits. They may be in receipt of benefits or eligible to receive benefits from other disability income programs such as Canada Pension Plan (CPP) disability and workers’ compensation as well as private long-term disability insurance.

2. Even for those individuals who are in receipt of disability-specific social assistance, creating a trust for the benefit of the person with the disability may not be the only vehicle for protecting their benefit entitlement. While the creation of Henson and other specific types of trusts may be one way to achieve this goal, the various disability-specific social assistance programs allow for other categories of exempt income and assets. [33]

3. The age of the beneficiary with a disability is also important. Many social assistance programs for persons with disabilities are only available to persons who are 18 years old and older.[34]

4. If the testator is extremely wealthy and is planning to pass on significant wealth to or for the benefit of the disabled beneficiary, protection of ODSP benefits may not be a consideration.

Trusts in each Canadian Province and Territory

The following is a discussion of how a trust might be treated in the various provinces and territories across Canada. It is important to remember that the Henson decision was specific to the treatment of discretionary trusts under the FBA and has been adopted under ODSP.

The authors note that there is very little published jurisprudence in other jurisdictions considering decisions to terminate a recipient’s social assistance benefits due to inheritance through a trust. Similarly, there is very little jurisprudence on the issue of asset determination under social assistance laws and in particular, there is very little jurisprudence on the issue of how a discretionary trust is treated under the various social assistance laws[35].

It is therefore the view of the authors that when drafting a trust for a disabled beneficiary who is in receipt of benefits in a province or territory other than Ontario, one should consult with a lawyer in that province or territory and/or with the public body providing those benefits, to ensure that the trust does not jeopardize the benefits. In fact, many careful counsel in Toronto have their Henson trusts reviewed by ODSP.

Finally, please note that legislation, regulations and policy directives are subject to change.

Ontario

Henson Trusts

The current ODSP Income Support Policy Directive 4.7, “Funds Held in Trust” confirms that funds and other property held in an absolute discretionary trust are not “assets” for ODSP purposes, regardless of the amount of funds in the trust.

ODSP exempts from benefit calculations $5,000 received by the beneficiary from any source (including a Henson Trust) in a 12 month period, and any payments received by the beneficiary that are “disability-related” if they serve to enhance the beneficiary’s ability to function in areas such as activities of daily living; social, recreational and/or community activities; education and training; housing; health maintenance, health care and safety; religious observances; transportation; communication and employment. Any other payments from the trust could be considered income and thus deducted from benefits.

As Beatty notes, “not every expenditure that assists the individual in these areas will be considered disability related, however. There must be a link between the expenditure and the provision of an accommodation to a disability, or the overcoming of a barrier”.[36]

Finally, if it is anticipated that the Henson Trust will last over 21 years, counsel should consider an alternative beneficiary who can receive income accumulated in the trust and not distributed to the disabled beneficiary[37].

It may be advisable to obtain some sort of advance ruling on whether the Trust satisfies ODSP exemptions. A beneficiary could take the trust document to the local ODSP office and it would be sent to the legal department of the Ministry of Community and Social Services for their opinion.

Other Trusts

If the corpus of the proposed trust is $100,000 or less, a Henson Trust is not necessary in Ontario in order to protect ODSP benefits. Certain funds are excluded from consideration as assets for ODSP purposes including the cash surrender value of a life insurance policy, as well as a trust fund created or derived from an inheritance, and the proceeds of a life insurance policy, so long as the total of all trust funds and insurance policies is not greater than $100,000.

Accordingly, if the total inheritance, including life insurance, is less than $100,000, a Henson Trust is not necessary. A testamentary trust, possibly tailored to the individual situation, and not discretionary, is usually an acceptable vehicle to pass on limited wealth to the beneficiary with a disability.

Alternatively, or in addition, if the inheritance or life insurance proceeds do not exceed $100,000, and were made payable to the ODSP recipient, the ODSP recipient can establish an ODSP trust him or herself (capacity issues aside) as described in ODSP Income Support Policy Directive 5.1[38]. Such a trust should be set up within six (6) months of the date the funds are received in order to protect the beneficiary’s ODSP entitlement.

As well, if an ODSP recipient receives an inheritance or life insurance funds that was not set up in a Henson Trust, it may still be possible to maintain receipt of ODSP benefits by making use of other ODSP asset exemptions[39]. For example, it has been suggested that a testator could seek to create a “House Trust”, which can own, operate and provide a home for a beneficiary with a disability without affecting his or her provincial benefits. A trustee can be granted the power to buy, sell, downsize or rent a home for the beneficiary. A House Trust should have enough capital to pay expenses relating to the home, such as property taxes, utilities, insurance and maintenance[40]. One should keep in mind however, that it is likely that any payments that are received from a trust or from another source to cover the costs associated with the home (in excess of the first $5,000 per year, as explained above) would be considered to be income to the beneficiary and would be deducted from the beneficiary’s monthly social assistance income. In addition, if the client were to rent out part of the home to defray the costs of maintaining the home, this rental income would also be deducted from the social assistance income. If the trust does not provide funds to maintain an asset one would want to ensure that the beneficiary would be able to carry the immediate and future costs of maintaining the property on the amount of social assistance received. It is recommended that if such a trust were to be established, it should be reviewed by the Ministry’s legal counsel to determine how such a trust would affect the beneficiary’s eligibility for disability benefits.

Precedents of various types of trusts that have been created for use relating to persons with disabilities who are in receipt of social assistance in Ontario can be found in the following sources:

• Mary Louise Dickson, Rod Walsh & Orville Endicott, The Wills Book: Benefits, Wills, Trusts and Personal Decisions Involving People with Disabilities in Ontario, supra

• Harry Beatty, “Advising the Ontario Disability Support Program Recipient or Applicant who has received an Inheritance or Insurance Proceeds”, supra

• Harry Beatty, “Estate Planning for Beneficiaries with Disabilities in Ontario: Inheritances, Trusts and the Ontario Disability Support Program”, supra

British Columbia[41]

In British Columbia, the relevant legislation is the Employment and Assistance for Persons with Disabilities Act[42][“BC Act”] and Employment and Assistance for Persons with Disabilities Regulation[43] made under the BC Act.

Like Ontario, a recipient of benefits under the BC Act could have unlimited funds in a Henson Trust [44]. Accordingly, Henson Trusts are appropriate estate planning devices for disabled beneficiaries in BC.

Also, much like Ontario, a disabled beneficiary in BC could also receive up to $100,000 to place in a non-discretionary trust[45]. Payments out of the trust would not be deducted from the recipient’s benefits if spent on medical aids that improve the person’s health or well-being; caregiver or other such services; renovations or changes to his/her home that make it easier for him/her to live there because of his/her disability; repairs or maintenance on his/her house; education or training[46]; and in addition, a recipient can receive up to $5,484 from the trust each 12 month period to help a recipient live more independently [47].

Alberta

In Alberta, the relevant legislation is the Assured Income for the Severely Handicapped Act [48] (“AISH Act”) and Assured Income for the Severely Handicapped Regulation [49] (“AISH Regulation”).

A recipient under AISHA is permitted to have up to $100,000 in combined assets [50], which could include a trust for the person with a disability. Unlike Ontario, the $100,000 can be from any source (i.e. not limited to insurance proceeds and inheritances).

In calculating the combined assets total, any non-exempt assets that the recipient’s spouse or common-law partner owns would be excluded, such as a home, the home quarter of a farm, one or two vehicles (the second must be adapted), special compensation payments, assets held by a trustee in bankruptcy, and a locked-in retirement account (LIRA).[51]

Subsection 9(2) of AISH is a deeming provision which permits the Director to deem that the AISH recipient is “entitled to receive all or part of the principal and any income that may be produced by any trust”. This provision has been widely interpreted to mean that Henson or discretionary trusts will be included in the $100,000 person with a disability’s assets [52]. Accordingly, Henson Trusts should not be used in Alberta for the purpose of protecting access to benefits.

There are certain income sources that are exempt or partially exempt from the calculation of income under the AISHA such as interest or investment income[53]. The income that an invested trust earns could be partially exempt from a recipient’s income calculations. The amount that is exempted depends on the source of income and the recipient’s family composition. There is no exemption for payments made to acquire disability related items.

In Alberta, it has been suggested that a House Trust would be a better legacy for a person with a disability. Alternatively, one could make the beneficiary with a disability one of three beneficiaries of a discretionary trust, which could also own real property. In such a circumstance, AISH would only attribute 1/3 of the assets and income to the disabled beneficiary[54] . The trustee of the trust could have complete discretion to sprinkle income or capital to any of the three beneficiaries. This would permit the beneficiary with a disability to continue to receive AISH benefits so long as the net value of the trust assets is $300,000 or less (excess income could be distributed to the other beneficiaries to ensure the limit is preserved).[55] It is recommended that such a trust be reviewed by counsel at AISH, as the broad deeming provision in s. 9(2) of AISH Act may provide the Director with the power to deem that the trust is really for the benefit of the beneficiary with a disability.

Saskatchewan[56]

In Saskatchewan, the relevant legislation is the Saskatchewan Assistance Act[57] and Saskatchewan Assistance Regulations[58] made under the Act. There is no specific exemption in the legislation for either discretionary or non-discretionary trusts; however, as a matter of policy, the Saskatchewan Department of Community Resources and Employment (Social Services)[59] exempts funds held in a discretionary trust in determining an individual’s entitlement to social assistance. The same policy states that payments from such a trust to, or on behalf of, a disabled beneficiary to enhance his or her wellbeing are not assessed as income.[60] However, if payments are made from the trust for needs which social assistance covers (i.e. an individual’s basic needs such as food, shelter and clothing) such payments will be treated as income and will result in a dollar for dollar reduction in social assistance[61].

Manitoba[62]

The relevant legislation in Manitoba is the Employment and Income Assistance Act (“MEIA”)[63] and Employment and Income Assistance Regulation[64] made under MEIA. There is no provision specifically exempting discretionary trusts in the asset calculation in MEIA or Man. Reg. 404/88 R. However, since the Manitoba Court of Appeal decision in Quinn v. Director of Income Security[65] , which considers predecessor legislation, as a matter of policy, the Ministry has taken the position that a discretionary trust does not constitute a financial resource for eligibility and/or assistance calculation purposes [66].

Accordingly, Manitoba, like Saskatchewan currently permit discretionary trusts to co-exist with provincial benefits.

Additionally, like Ontario and BC, a person with a disability can have up to $100,000 in another type of trust unless residing in specific institutions listed in the Regulation[67]. Disbursements from the property held in trust are not included in calculating a recipient's financial resources if the disbursements are used to purchase disability-related items or services[68]. In addition, disbursements used to purchase any items or services, or to be held as savings, are exempt to a total of $2000 for a single person and $4000 for a family[69].

Quebec[70]

The relevant legislation in Quebec is An Act Respecting Income Support, Employment Assistance and Social Solidarity[71] and the Regulation Respecting Income Support[72]. Discretionary trusts are perfectly acceptable and of common use in Quebec[73]. The Quebec Act does not specifically exempt a discretionary trust from the calculation of assets; however, as has been determined by the Administrative Tribunal of Quebec in Mathieu c. Mathieu, the definition of liquid assets under the Regulation would not include a discretionary trust [74].

The definition of “Liquid assets” reads as follows: “Liquid assets shall comprise everything that an independent adult or a family possesses in cash or in an equivalent form and the value of assets that they can convert into cash in the short term[75]”. An example of “liquid assets” that is given is “amounts … that a financial institution holds on deposit for an independent adult or a family, or funds that it holds in their favour if they have ready access to those funds”[76].

In determining that a discretionary trust was not to be included in the calculation of liquid assets under the Regulations the Tribunal in Mathieu stated that it was important to recognize that the income and assets of the trust do not belong to the beneficiary but rather that they are in a completely separate patrimony. However, because of the definition of “liquid assets”, recipients of benefits under this Quebec Act would not be able to take the money received as an inheritance to establish a trust fund on their own.

Most payments out of the trust fund would be deducted from a recipient’s benefits as income. Interest that the fund earns would be exempt[77]. The Regulations also exempt “up to $305 per month, [that is used] to allow a recipient to reside in a facility maintained by a private institution not under agreement that operates a residential and long-term care centre or a private residence for retirees or persons with a slight loss of autonomy” [78]. There is no exemption for payments that are applied to disability related items[79].

New Brunswick

The relevant New Brunswick legislation is the Family Income Security Act[80] and General Regulation – Family Income Security Act[81] made under the Act. In considering assets to determine eligibility for benefits under this act, the Regulation refers to “available assets”[82]; therefore, a Henson Trust would arguably be exempt from the calculation of assets under the Act.

Additionally, a person who is in receipt of benefits under the Act as a blind, deaf or disabled person can have a trust fund up to a value of $75,000 [83]. However the following conditions apply:

• the principal and accumulated interest are intended and are used solely to assist in maintaining a recipient to live in the home or the community;

• the total principal sum paid must be deposited to the credit of the recipient in a Canadian bank or other financial institution;

• withdrawals made from such accounts are to be made only with the advance written approval of FCS, for expenditures agreed to by the recipient and FCS; and

• the recipient must authorize the New Brunswick Family and Children’s Services and the financial institution to give and receive information by use of the Trust Fund Reporting Form.

According to the New Brunswick Family and Community Services, Social Assistance Policy Manual[84], 75% of the income generated by the Trust Fund (interest earned from the investment, which places the value of the Trust Fund over $75,000.00), should be applied to special needs benefits that may be required by the individual. This income will be taken into account when considering requests for special benefits and 25% of the income generated from the Trust Fund (interest earned from the investment, which places the value of the Trust Fund over $75,000.00) will be exempt. This is not clearly stated anywhere in the Regulations so it could be found that this interpretation is not binding and could be subject to change.

Newfoundland and Labrador

The relevant Newfoundland and Labrador legislation is the Income and Employment Support Act[85] and Income and Employment Support Regulations[86] made under the Newfoundland Act. Any amount held in a Henson Trust would arguably be exempt from the calculation of assets under the regulations since only liquid assets are included.[87]

Additionally, a recipient “who requires supportive services” could have a trust fund up to $100,000[88]. The regulation refers to these trusts as “support trusts”[89]. In order to qualify as the exempt trust, the recipient must annually uses the total interest income from the support trust, plus at least 2% of the capital of the support trust; and the support trust must be established and maintained in a manner and under terms and conditions that the minister may establish or approve. [90] If the disbursements of the trust are used in this way, they will not be included in income calculations of the recipient [91]. According to the information on support trusts found on the Newfoundland government website, the trusts and the income from the trust are to be used to offset the exceptional expenses experienced by persons with a disability[92].

Nova Scotia[93]

The relevant Nova Scotia legislation is the Employment Support and Income Assistance Act[94] and Employment Support and Income Assistance Regulations[95] made under the Nova Scotia Act. There are no sections in the Act or Regulations that apply specifically to persons with a disability. The income and assets of a recipient with a disability are subject to the same rules as all recipients.

The term, “applicable assets” under the Regulation includes all “liquid assets” with a few listed exemptions [96]. Funds held in a discretionary trust would arguably not be included as a “liquid asset” but depending on the wording of the trust document, a non-discretionary trust fund could be included in asset calculations to make a recipient ineligible. The Regulations state that an applicant or recipient would not be eligible to receive benefits if it is feasible for the recipient to obtain support from the fund. [97] 100% of the income or money paid out of the trust would be deducted from the recipient’s benefits as income[98].

Prince Edward Island

The relevant Prince Edward Island legislation is the Social Assistance Act[99] and General Regulations, P.E.I. Reg. EC396/03[100] made under the PEI Act. In determining eligibility for benefits under the PEI Act, all “liquid assets and any other assets that can be converted into cash “would be considered[101]. Under the PEI Regulations, a single recipient can have up to $900 in liquid assets and a family can have up to $2400 in liquid assets[102].

Since the PEI Regulations refers to “liquid assets” a discretionary trust arguably would be exempt from the asset calculation; however, any amount over these allowable limits that is held in a non-discretionary fund could disqualify a recipient from receiving social assistance benefits. The PEI Regulations specifically include inheritances, settlements, bequests and the cash surrender value of life insurance policies as liquid assets[103]. All payments out of the trust would be included as income[104].

Northwest Territories and Nunavut

The relevant legislation is the Northwest Territories Social Assistance Act[105] and Regulation made under the Act[106]. Nunavut has adopted the Northwest Territories’ legislation on this topic. A person with a disability in receipt of assistance under the NWT Act can have assets up to $5000[107]. In determining eligibility to receive benefits under the NWT Act, all “financial instruments or other assets that can be realized within 90 days or can be converted into cash” are considered to be financial resources available to the applicant for maintenance[108].

Funds held in a discretionary trust arguably cannot be ‘realized by the recipient” but a non-discretionary trust could be considered to be a financial resource, depending on wording of the trust document. A non-discretionary trust could be preserved if a recipient could convince the Director of Social Assistance that the trust fund should not be converted to cash because it should be held for “sound social or economic reasons” to cover the costs of future care or treatment or future aids, for example. Payments from the trust would generally be considered a financial resource that would be deducted from the recipient’s benefits; however, there is an exemption from the calculation of income for contributions for things other than the costs of ordinary maintenance for recipients or their dependants who require special care[109].

Yukon Territory

The relevant Yukon legislation is the Social Assistance Act[110] and Social Assistance Regulations[111] made under the Yukon Act. A person with a disability in receipt of assistance under the Yukon Act, can have assets up to $3000 [$4000 for a person with dependents] exempted from asset calculations[112]. In determining the financial resources that a recipient has, the “immediate realizable value” of assets is to be considered[113]. Arguably the funds held in discretionary trust are not “immediately realizable” to a recipient and should not be included. The terms of a non-discretionary trust document would determine whether the same argument could be made for a non-discretionary trust. A non-discretionary trust could be preserved if a recipient could convince the Director of Social Assistance that the trust fund should not be converted to cash because it should be held for “sound social or economic reasons” to cover the costs of future care or treatment or future aids, for example[114]. Payments from the trust would generally be considered a financial resource that would be deducted from the recipient’s benefits; however, there is an exemption from the calculation of income for contributions for things other than the costs of ordinary maintenance for recipients or their dependants who require special care[115].

VI Conclusion

A lawyer should tread carefully when doing estate planning involving a beneficiary with a disability. If Henson Trusts are acceptable in the particular province, it is imperative that the selected Trustee(s) are prepared to develop a working knowledge of the legislative and policy scheme and an understanding of the value of the benefits to the disabled beneficiary. When drafting trust for a beneficiary in another province, the Ontario lawyer should be familiar with the disability benefits legislation (which, in many cases is the provincial social assistance legislation) and any policies in place. Ideally, the lawyer should have the trust reviewed by able counsel in the province and/or consider having it reviewed by the government body who administers the disability benefits program.

In provinces and territories where Henson Trusts are not recognized, we recommend that unless the client wants to be a test case, other estate planning devices should be considered. In cases where the value of benefits far exceeds the value of the proposed gift under the will or trust, one should tread very carefully so as not to put the person with a disability in a very difficult situation.

Appendix A

Social Assistance Legislation and Policies in Canadian Provinces and Territories

ALBERTA

Legislation

Assured Income for the Severely Handicapped Act, R.S.A. 2000, c. A-45, ss. 7(s), 9(2).

Assured Income for the Severely Handicapped Regulation, Alta. Reg. 203/1999, Sch. 1.

Policy

Alberta Seniors and Community Supports “AISH Policy Manual”, (2006) online: .

BRITISH COLUMBIA

Legislation

Employment and Assistance for Persons with Disabilities Act, S.B.C. 2002, c. 41, ss. 12(1), (2).

Employment and Assistance for Persons with Disabilities Regulation, B.C. Reg. 265/2002, s. 24(b), Sch. B s. 7(d).

Policy

British Columbia, Ministry of Employment and Income Assistance, “Disability Assistance and Trusts” (2003), online: .

MANITOBA

Legislation

Employment and Income Assistance Act, C.C.S.M., c. E98.

Employment and Income Assistance Regulation, Man. Reg. 404/88 R, ss. 8(3), 8.1(9)(a), (b).

Policy

Manitoba, Family Services and Housing, Employment and Income Assistance Administrative Manual (n.d.), online: .

NEW BRUNSWICK

Legislation

Family Income Security Act, S.N.B. 1994, c. F-2.01.

General Regulation – Family Income Security Act, N.B. Reg. 95-61, ss. 8(1), (2).

Policy

New Brunswick, Family and Community Services, Social Assistance Policy Manual (Fredericton: Family and Community Services, 2004), online: .

NEWFOUNDLAND and LABRADOR

Legislation

Income and Employment Support Act, S.N.L. 2002, c. I-0.1.

Income and Employment Support Regulations, N.L.R. 144/04, ss. 8(c)(ii), 25(1), 26

Policy

Newfoundland and Labrador, Human Resources, Labour and Employment, Income Support Program: Support Trusts (n.d.), online: .

NORTHWEST TERRITORIES

Legislation

Social Assistance Act, R.S.N.W.T. 1988, c. S-10.

Social Assistance Regulations, R.R.N.W.T. 1990, c. S-16, ss. 20(4)(m), (5)(c), (m.1).

NOVA SCOTIA

Legislation

Employment Support and Income Assistance Act, S.N.S. 2000, c. 27.

Employment Support and Income Assistance Regulations, N.S. Reg. 25/2001, ss. 2(f), 47(2)(i), 58.

NUNAVUT

Legislation

Social Assistance Act, R.S.N.W.T. 1988, c. S-10.

Social Assistance Regulations, R.R.N.W.T. 1990, c. S-16, ss. 20(4)(m), (5)(c), (m.1).

Policy

Department of Education, “Nunavut Income Support Program” (July 2005), online: .

ONTARTIO

Legislation

Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sch. B, s.2.

General, O. Reg. 222/98, ss. 1(1), 27, 28, 37(1)

Policy

Ontario, Ministry of Community and Social Services, ODSP Income Support Policy Directive 4.1 “Definition and Treatment of Assets” (April 2005), online:

Ontario, Ministry of Community and Social Services, ODSP Income Support Policy Directive 4.7 “Funds Held in Trust” (April 2005), online: .

Ontario, Ministry of Community and Social Services, ODSP Income Support Policy Directive 5.1 “Definition and Treatment of Income” (November 2005), online:

Ontario, Ministry of Community and Social Services, ODSP Income Support Policy Directive 5.9 “Disability Related Items and Services” (April 2005), online:

PRINCE EDWARD ISLAND

Legislation

Social Assistance Act, R.S.P.E.I. 1988, c. S-4.2.

General Regulations, P.E.I. Reg. EC396/03, ss. 7(2), (3), 10(e), 13(3)(e), (h).

QUEBEC

Legislation

Income Support, Employment Assistance and Social Solidarity, An Act respecting, R.S.Q. c. S-32.001.

Income Support, Regulation respecting, R.Q. c. S-32.001, r.1, ss. 84(11), (24), 102.

SASKATCHEWAN

Legislation

Saskatchewan Assistance Act, R.S.S. 1978, c. S-8.

Saskatchewan Assistance Regulations, Sask. Reg. 78/66, ss. 28(2)(c), (c.1).

Policy

Saskatchewan, Community Resources and Employment, Social Assistance Program Policy Manual (June 2005) c. 20 “Assets”, online: .

YUKON TERRITORY

Legislation

Social Assistance Act, R.S.Y. 2002, c. 205.

Social Assistance Regulations, Y.C.O. 1972/228, ss. 19, 20(5)(c), (7).

Policy

Yukon Territory, Department of Health and Social Services, Adult Services Unit: Social Assistance Policy and Procedures E-Manual (Whitehorse: Health and Social Services, 2004), online: .

Appendix B

Individuals who Contributed to this Paper

This paper could not have been written without the assistance kindly provided by knowledgeable lawyers across Canada, who provided us with their papers, wrote summaries of the laws in their provinces, and provided us with their assistance in putting this paper together.

John E. S. Poyser

INKSTER CHRISTIE HUGHES LLP

Barristers and Solicitors

700-444 St. Mary

Winnepeg, Manitoba

(204) 947-6801

jpoyser@inksterchristie.ca

Mary Louise Dickson

DICKSON MCGREGOR APPELL LLP

Barristers and Solicitors

10 Alcorn Avenue, Suite 306

Toronto, Ontario, M4V 3A9

(416) 927-0891

W. Robert Pelton, Q.C., and Paula Strassburg

ROBERTSON STROMBERG PEDEREN LLP

Barristers and Solicitors

500 – 2200 – 12th Avenue

Box 1037

Regina, Saskatchewan

S4P 3B2

Phone - (416) 565-6502

Fax – (416) 565-6565

r.pelton@

Janine A. S. Thomas

Law Office

300-1055 West Hastings Street

Vancouver, B.C.

V6E 2E9

Phone: (604) 915-7113

Fax: (604) 915-7114

Janine@

Barry Landy and Jacqueline Estrada

Spiegel Sohmer Inc.

5 Place Ville Marie

Suite 1203

Montreal, Quebec

H3B 2G2

Phone (514) 875-2100

blandy@

jestrada@

Megan Leslie

Community Legal Worker

Dalhousie Legal Aid Service

2209 Gottingen St.

Halifax NS B3K 3B5

Tel: 902.423.8105

Fax: 902.422.8067

Katherine Haist

Project Staff Lawyer

ARCH Disability Law Centre

425 Bloor St. E. Ste. 110

Toronto, Ontario M4W 3R5

Tel:416-482-8255 or 1-866-482-2724

TTY:416-482-1254 or 1-866-482-2728

Fax: 416-482-2981 or 1-866-881-2723

E-mail: archst1@lao.on.ca

Website: archdisabilitylaw.ca

Naomi Horrox

Student-at-law

Gowling Lafleur Henderson LLP

Barristers and Solicitors

Suite 1600

100 King Street West

Toronto, Ontario

M5X 1G5

Ph: (416) 862-7525

Fax: (416) 862-7661

Naomi.Horrox@

G&C Firm - 181163 v1

-----------------------

[1] This paper was prepared for an Ontario Bar Association program “Cross Country Expedition: Probate and Incapacity Planning & Administration across Provincial Boundaries” which was held on May 15, 2006.

The authors of this paper do not practice law outside of Ontario. The opinions expressed in this paper are based on our interpretation of the statutes and regulations of other provinces and territories in light of our experiences with Ontario social assistance laws as they intersect with estate planning. Our purpose in reviewing the legislation, regulations and policies of other provinces and territories is to highlight the issues that need to be considered when planning an estate that has beneficiaries with disabilities. In our view, a lawyer drafting a trust document relating to a disabled beneficiary who is resident outside of Ontario should seek the advice of a lawyer who has drafted trust documents for disabled beneficiaries in the relevant province or territory and/or consider having the trust document reviewed by legal counsel of the relevant social assistance program.

[2] Richard Shillington, The Disability Savings Plan: Policy Milieu and Model Development (Ottawa: The Caledon Institute of Social Policy, 2005) at 1.

[3] Shillington, ibid.

[4] Statistics Canada, A Profile of Disability in Canada, 2001 by Lucie Cossette & Édith Duclos (Ottawa: Minister of Industry, 2002) at 7-8.

[5] Human Resources Development Canada, Disability in Canada: a 2001 Profile (Gatineau, Qc: Queen’s Printer, 2003) at 2-3; Statistics Canada, Education, Employment and Income of Adults with and without Disabilities – Tables (Ottawa: Minister of Industry, 2003).

[6] Canada, National Council of Welfare, Welfare Incomes 2003, vol. 121 (Ottawa: Minister of Public Works and Government Services Canada, 2004) at IX. The maximum ODSP payment to cover both shelter and basic needs costs for a single person is $957/month if the person is a home owner or tenant, and $730/month if the person is a boarder, including persons living with family. See also: Harry Beatty, “Estate Planning for Beneficiaries with Disabilities in Ontario: Inheritances, Trusts and the Ontario Disability Support Program (July 2005), online: ARCH Disability Law Centre [Beatty, “Estate Planning”].

[7] Shillington, supra, at 8.

[8] Supra.

[9] Supra at 29 ff.

[10] R.S.O. 1990, c. S.26 [SLRA].

[11] [2005] O.J. No. 2359 (Ont. Sup. Ct. J.) (QL).

[12] (2004), 69 O.R. (3d) 398 (Ont. C.A.)

[13] ODSP entitlement would not be jeopardized by home ownership.

[14] Beatty, “Estate Planning”, supra, at 17.

[15] National Council of Welfare, supra, at 1.

[16] Ontario Works Act, S.O. 1997, c. 25, sch. A.

[17] Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sch. B [ODSPA].

[18] The general ODSP regulation is: O.Reg. 222/98 [ODSPA Reg.].

[19] Ontario, Ministry of Community and Social Services, ODSP Income Support Policy Directives, online: .

[20] Other important ODSP Income Support Policy Directives are Directive 5.9 “Disability Related Items and Services” (April 2005), Directive 4.1 “Definition and Treatment of Assets” (April 2005), and Directive 5.1 “Definition and Treatment of Income” (November 2005).

[21] Employment supports are intended to help persons with disabilities prepare for, obtain or maintain a job. For further details see: Dianne Wintermute, “Ontario Disability Support Program: Employment Supports Program” (December 2003), online: ARCH Disability Law Centre, supra.

[22] ODSPA Reg., supra, s. 27.

[23] Ibid., s. 27(2).

[24] Ibid. s. 28; ODSP Income Support Policy Directives, supra, 4.1 – 4.9.

[25] The items listed in this paper are derived from a list prepared by Harry Beatty of asset exemptions that are particularly relevant to estate planning: Beatty, “Advising”, supra at 8; see also ODSPA Reg., ibid.

[26] ODSPA Reg., supra, s. 37(1).

[27] The benefit unit, in addition to the person with a disability, includes the person's spouse or same sex partner if residing with the person, and the person's dependant child under 18, or dependant son or daughter over 18, if residing with the person. The benefit unit does not include the parents or other relatives of the person with a disability, whether the person resides with them or not: ODSPA, supra, s. 2; ODSPA Reg., ibid. s. 1(1); Beatty, “Estate Planning”, supra.

[28] See Wintermute, “Income Supports”, supra for a detailed and comprehensive description of eligibility criteria.

[29] Ibid. at 3, 10.

[30] (1987), 28 E.T.R. 121 (Ont. Div. Ct.); aff’d (1989), 36 E.T.R. 192 (Ont. C.A.).

[31] R.S.O. 1990, c. F.2.

[32] John E.S. Poyser, “Life Support” Adviser’s Edge (Mid- January 2004) 23 at 27; John E.S. Poyser, “Succession Planning for Families with Disabled Dependants (Part 3)”

[33] Beatty, “Estate Planning”, supra, at 21-22.

[34] See section on Age of the Beneficiary above.

[35] See Guy v. Northumberland (County) Administrator, Ontario Works, [2001] O.J. No. 2166 (Div. Ct.) in Ontario; Donald Estate v. Donald (Litigation guardian of), [2005] S.J. No. 490 (Q.B.) in Saskatchewan; Quinn (next friend of) v. Manitoba (Executive Director of Social Services, Westman Region),[1981] M.J. No. 74 (C.A.) in Manitoba; and J. R. v. Minister of employment, social and family solidarity (9 August 2004) SAS-Q-102697-0311 in Quebec.

[36] Beatty, “Estate Planning”, supra, at 21; see also ODSP Income Support Policy Directive 5.9 “Disability Related Items and Services” (April 2005).

[37] Mary Louise Dickson, Rod Walsh & Orville Endicott, The Wills Book: Benefits, Wills, Trusts and Personal Decisions Involving People with Disabilities in Ontario (Toronto: Ontario Association for Community Living, 1999) at 41 [The Wills Book].

[38] “Definition and Treatment of Income”, supra, at 5; See also Directive 4.7 “Funds Held in Trust”, supra.

[39] ODSPA Reg., supra, ss. 27, 28.

[40] “Planning for Special Needs Persons: Are ‘Henson Trusts’ all Grown Up?” Sun Life Financial Advisor Bulletin (July 2003).

[41] The authors are grateful for the contribution of Janine A. S. Thomas, Law Office, of Vancouver, B.C. for the British Columbia segment of the paper.

[42]S.B.C. 2002, c. 41 [BC Act].

[43] B.C. Reg. 265/2002 [BC Reg.].

[44] British Columbia, Ministry of Employment and Income Assistance, “Disability Assistance and Trusts” (2003), online: .

[45] BC Act, supra, s. 12(2).

[46] Ibid. s. 12(1).

[47] BC Reg., supra, s. 24(b), Sch. B s. 7(d).

[48] R.S.A. 2000, c. A-45 [AISHA].

[49] Alta. Reg. 203/1999 [Alta. Reg.].

[50] AISHA, supra, s. 7(2).

[51] Ibid.

[52] John E.S. Poyser, “Life Support” Adviser’s Edge (Mid- January 2004) 23 at 25; Shillington, supra, at 11; Alberta Association for Community Living, “Renewing AISH – Ensuring AISH is available into the future for Albertans who need it”, October 2004), The Step Study – Could a Legacy Deprive a Disabled Beneficiary of Social Assistance, STEP Inside, Volume 2, No. 1, Fall 2001 (Alberta Solution written by Thea Lynn Paul, Faber Gurevitch Bickman), p. 3.

[53] See Alta. Reg., supra, Sch. 1. 

[54] s.8(1) AISH Regulation provides that “if an asset is jointly or communally owned, the value of the asset attributed to any owner is the amount calculated by dividing the value of the asset equally among all the owners”; s. 8(3) creates an exception where a trust creates a percentage entitlement for a beneficiary

[55] The Step Study – Could a Legacy Deprive a Disabled Beneficiary of Social Assistance, STEP Inside, Volume 2, No. 1, Fall 2001 (Alberta Solution written by Thea Lynn Paul, Faber Gurevitch Bickman), p. 3.

[56] The authors are grateful for the contribution of W. Robert Pelton Q.C. and Paula Strassburg of Robertson Stromberg Pederson LLP, Regina, Saskatchewan for the Saskatchewan segment of the paper.

[57] R.S.S. 1978, c. S-8.

[58] Sask. Reg. 78/66.

[59] Saskatchewan, Community Resources and Employment, Social Assistance Program Policy Manual (June 2005) c. 20 “Assets”, online: [Saskatchewan, Manual].

[60] Ibid.

[61] Ibid.

[62] The authors gratefully acknowledge the contribution of John Poyser of Inkster Christie Hughes, Winnipeg, Manitoba, for the Manitoba segment of the paper, and for his survey of the laws of the other provinces.

[63] C.C.S.M. c. E98 [MEIA].

[64] Man. Reg. 404/88 R.

[65] (1981), 124 D.L.R. (3d) 715 (Man. C.A.)

[66] Manitoba, Family Services and Housing, Employment and Income Assistance Administrative Manual (n.d.), online: .

[67] Man. Reg. 404/88 R, s. 8(3).

[68] Ibid. s. 8.1(9)(a).

[69] Ibid. s. 8.1(9)(b).

[70] The authors gratefully acknowledge the contribution of Barry Landy and Jacqueline Estrada of Spiegel Sohmer Inc., Montreal, Quebec for the Quebec segment of the paper.

[71] R.S.Q. c. S-32.001 [Quebec Act].

[72] R.Q. c. S-32.001, r. 1.

[73] It is possible to have a discretionary trust where the settlor is also be the trustee but in such a case, the trustee shall act jointly with a trustee who is neither the settlor nor a beneficiary: Civil Code of Québec Art. 1260 C.C.Q., s. 1275.

[74] See Mathieu c. Mathieu, 405-17-000475-058 (S.C) and J. R. v. Minister of employment, social and family solidarity, SAS-Q 102697-0311 (August 9, 2004)

[75] Regulation Respecting Income Support, supra, s. 102.

[76] Ibid. s. 102(1).

[77] Ibid. s. 84(11).

[78] Ibid. s. 84(24).

[79] See J. R. v. Minister of employment, social and family solidarity, (9 August 2004) SAS-Q-102697-0311.

[80] S.N.B. 1994, c. F-2.01.

[81] N.B. Reg. 95-61.

[82] Ibid. s. 8(1).

[83] Ibid. s. 8(2).

[84] (Fredericton: Family and Community Services, 2004), online: .

[85] S.N.L. 2002, c. I-0.1 [Newfoundland Act].

[86] N.L.R. 144/04.

[87] Ibid. s. 26.

[88] Ibid. s. 25(1).

[89] Ibid.

[90] Ibid.

[91] Ibid. s. 8(c)(ii).

[92] Newfoundland and Labrador, Human Resources, Labour and Employment, Income Support Program: Support Trusts (n.d.), online: .

[93] The authors gratefully acknowledge the contribution Megan Leslie, Community Legal Worker at Dalhousie Legal Aid Service for the Nova Scotia section of the paper.

[94] S.N.S. 2000, c. 27.

[95] N.S. Reg. 25/2001.

[96] Ibid. s. 2(f).

[97] Ibid. s. 58.

[98] Ibid. s. 47(2)(i).

[99] R.S.P.E.I. 1988, c. S-4.3 [PEI Act].

[100] [the PEI Regulations].

[101] Ibid. s. 13(3)(h).

[102] Ibid. ss. 7(2), (3).

[103] Ibid. s. 10(e).

[104] Ibid. s. 13(3)(e).

[105] R.S.N.W.T. 1988, c. S-10 [NWT Act].

[106] Social Assistance Regulations, R.R.N.W.T. 1990, c. S-16.

[107] Ibid. s. 20(5)(m.1).

[108] Ibid. s. 20(4)(m).

[109] Ibid. s. 20(5)(c).

[110] R.S.Y. 2002, c. 205.

[111] Y.C.O. 1972/228.

[112] Ibid. ss. 19(3)(c), (e).

[113] Ibid. s. 19.

[114] Ibid. s. 19(3)(f), 20(7).

[115] Ibid. s. 20(5)(c).

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