Henson Trusts

Before RDSPs there were not a lot of options for Parents of disabled children to protect income they were saving for their child’s future, without having to pay a great deal of tax on it, as it grew.

The RDSP helps a great deal with this, however before the RDSP another way to dissipate the impact of a disabled person receiving a large inheritance which could cause large tax implications and worse a loss of services and programs (due to the change in their financial status) was a Henson Trust (a specialized version of the Absolute Discretionary Trust).

I was going to attempt to explain this one, but thanks to Mark over at the Blunt Bean Counter, he has a much better explanation with this one:

Estate Planning for Disabled Beneficiaries – Henson Trusts

By Katy Basi

The RDSP is a much “simpler” (for lack of a better term) program to work with in terms of set up, but in some instances, the Henson Trust may be the only option available.

Note: Yes, this is a bit of a cheat on my part relying on other writers, but this has been sitting in my “To Do” list for a while. Please feel free to comment and ask questions, I will make sure I get some answers for you.

Also remember your loved one needs to have a Disability Tax Credit (DTC) for this as well. Evidently, I was mistaken, however, the ODSP is actually involved for Ontarians as well.


New Ontario Autism Funding

So far the new Ontario Autism funding program has been quite confusing for my family. Let me preface this by saying, that even though my son is on the Autism Spectrum, and the psychologist describes his autism symptoms as severe, we have received no real funding from the Ontario Government. For various reasons we have never been on any list for funding, being screened out for any therapy and never put on a waiting list for any future programs.

When the new funding model was proposed a while ago, a great furor erupted in the Autism community. It was very vague on how funding was going to work, and many folks were hearing they were going to lose funding as the budgeted pot of money would be shared with more families, in an effort to reduce the wait list.

For my family, we shrugged our shoulders, as we didn’t get any funding, we could only watch with envy finding out families were receiving upwards of 50K per year. After encouragement from our psychologist, we decided to play along with this new system. My wife is the one doing all this work, I am simply documenting it.

We called about the new program in April, and were told forms would be coming to us in the next two weeks to fill in. The forms finally showed up in June (after a lot of follow up e-mails and phone calls). My wife dutifully filled in the forms (the day they arrived) collected all supporting documentation and we scanned and emailed them back (that same day).

Near the end of August, we received a registration number (an exciting number) and a letter assuring us we are in the system. The wait list for getting a budget will be another 18 months, so again, we wait.

Autism Funding : Better? Worse?

If I see any moneys, I will be astounded. I realize there are folks who really need the money, and I hope they are getting it.

Currently I pay a great deal of my income for my son’s education and other needs he has. I get a little help with tax credits (after a lot of arguing with the CRA), but all the money that I am out of pocket is crippling my financial plans. I cannot retire, even though I can get a government pension. Still we cannot afford all the help my son needs (occupational therapy, social interaction help, and other areas).

With all of that, we are lucky. My son may end up living independently, but I have to spend money now to make that possible.


We did get more funding for my son. For that I am thankful, however, I am not sure how this is going to work. Will I be hit with a, “sorry we shouldn’t have sent that” message? The system seems to be in flux, what happens in the future, remains to be seen.


Apply for the DTC Please

I have spoken with a few folks who have convinced themselves they can’t get the Disability Tax Credit (DTC) so they won’t apply for the DTC. Given the stories lately about the CRA rejecting many applications, and how complicated the process is, many folks are not applying (when they should be applying).

Allow me to be clear, apply, fill in all the forms and let the CRA decide. If you don’t apply, you will never get the DTC.

Do the work, make sure you fill in the forms well, get all the help you can, but apply, please!

To paraphrase Wayne Gretzky you will receive 0% of the DTC applications you never send.

Without a DTC there is no RDSP, and while the Disability Tax Credit is not a large credit, it is still vital to have it to be able to get other services and help from the government. It is not easy to navigate the government red tape, but it is the most important thing you can do for your child or your loved one.

Apply for DTC

Should you Apply for the DTC ?

If you or your loved one has a disability recognized by the CRA or on their list, then yes is the answer.

Let me repeat my message, if you don’t apply you will not get the Disability Tax Credit, if you do apply you might (but if you don’t ask the answer is always NO).


Bill C-462 : Protecting Disabled Canadians or a Paper Tiger ?

For those of  you unaware Bill C-462 the Disability Tax Credit Promoters Restrictions Act ,was passed into law and received Royal Assent (2014-05-29) . 

Disability Tax Credit Promoters Restriction Act

Penalties must be set for overcharging DTC Consultation Firms (link to CBC article on the act)

This Disability Tax Credit Promoters Restrictions Act  summary

This enactment restricts the amount of fees that can be charged or accepted by persons who, on behalf of a person with a disability, request a determination of disability tax credit eligibility under the Income Tax Act. It establishes a prohibition against charging or accepting more than an established maximum fee and establishes offences and penalties for failure to comply.

The Act was passed, given royal consent, however,  it seems to have never been made law. If you read the bill it looks like it would be easy to enforce, however in the summary you read:

“…an established maximum fee and establishes offences and penalties for failure to comply…”

The problem is the Act never defines maximum fees or the penalties for them.  The other issue is that the act has never “come into force”. I guess it is dead, which is unfortunate. A maximum charge and penalties are needed.

While I have always said you should Do It Yourself, I also realize some folks will need help. These firms must stop gouging their customers.

Who Should You Contact About This?

If you want to voice your concerns about the Disability Tax Credit Promoters Restrictions Act, contact the sponsor of the bill  , she would like to hear from you as well. I have been in conversation with Ms. Gallant.


Power of Attorney for Autistic Family Member?

When your child on the Autism Spectrum, turns 18, what do you do to help them with their financial decisions? Many folks on the spectrum can deal with money, and will have no issues with money. For others there will be a need to have safeguards put in place to protect them. This will help them with their money (and financial decisions).  My assumption had been, that (if need be) for my son, I would simply set up a Power of Attorney for Autistic loved one, and that would help protect my son. I learned, however, from another parent who has a son that is older than 18, this is not the case.

Since Autism is viewed as a mental incapacity, a Power of Attorney for Autistic adults cannot be used in most cases. The simple explanation I can give, is that due to the mental handicap, the person cannot delegate their decisions using a power of attorney, because they do not understand (i.e. competency) what they are delegating or what they are signing. When my friend told me this one, I had one of those, “Oh crap!”, moments.

What needs to be done in these situations is setting up a parent as the Statutory guardian for the child (or family member). This is a very daunting task, where a lawyer is needed to file documents with the courts. The Power of Attorney can be done (in most cases) using simple kits that are available on-line. I am sure there are folks that feel they are competent enough to do this on their own. From what I can decipher (so far) of the documentation I will need a lawyer.

I will (most likely) be setting this up for my son. Luckily this only needs to be in place by the time he turns 18 (I think). My friend has promised to give me a further tutorial on what he has gone through (and it does not sound like a cheap process either). I make the not cheap comment due to the comment in the Statutory Guardian documentation:

The Public Guardian and Trustee charges a fee of $382.00 plus HST of $49.66 for processing an application for statutory guardianship, under the authority of s.8 of the Public Guardian and Trustee Act.

This article is a “heads up” for those parents out there who might have had the same assumptions I had about Power of Attorney. I will be writing more about this topic as I learn about it. I suspect I might even bend the ear of a few of my Financial Blogging associates.

If you have set up an RDSP for your loved one, this guardianship is very important. This is an important topic to keep in mind. How will your loved one coped in their adult years, financially?

Relevant sites:

  • Guardian of Propertywebsite from the Ministry of the Attorney General of Ontario.
  • Becoming a Guardian another Government of Ontario Website. Remember the ODSP may come into play here too.
  • www.e-laws.gov.on.ca  All the laws for the Province of Ontario.
  • www.attorneygeneral.jus.gov.on.ca. This is the website for the Ministry of the Attorney General. It includes bulletins and background about power of attorney, guardianship, the Public Guardian and Trustee and related matters. It also includes copies of the various forms needed to file an application to replace this office.

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