Henson Trusts - An overview

Douglas J. Green & Mario Thomaidis

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For families who have a child with disabilities, perhaps the best way of providing for their ongoing needs while ensuring their qualification for Ontario Disability Support Program (ODSP) benefits is through the use of a Henson Trust. This type of trust takes its name from Leonard Henson, who realized that if he left his estate directly to his developmentally disabled daughter, Audrey, the inheritance would exceed her allowable asset limit and thereby disqualify her from government benefits until the assets were reduced or "spent down" to below the threshold amount. Mr. Henson searched for and eventually found a technique that allowed Audrey to receive quality of life enhancements from his estate while at the same time receive government benefits. The solution was the creation in his Will of a specific form of a trust known as the Absolute Discretionary Trust.

Although the terms "Henson Trust", "Absolute Discretionary Trust" and "Discretionary Trust" are often used interchangeably, when used in the context of providing for a loved one with a disability, all three refer to the same type of designed trust to meet a very specific purpose: a trust set up to ensure that a child with a disability continues to qualify for ODSP benefits while still providing her or him with an inheritance above the allowable asset limit. A parent or guardian seeking to create such a trust must meet three basic requirements: first, the parents' Will should create an Absolute Discretionary Trust for the benefit of child receiving ODSP benefits. Second, the trust must be funded by insurance or acceptable assets. Third, suitable trustees must be chosen to carry out the terms of the trust. When all three of these requirements have been met, the parents will have successfully created a Henson Trust and provided for their son or daughter in the manner sought.

While the basic elements for a Henson Trust can be simply stated, the specific requirements and variations are significant. For example, although a Henson Trust is most often created through the Will of the parents, it can in fact be established while the parents are still living. Thus it is recommended that parents considering a Henson Trust for their child seek the professional advice of an experienced trust lawyer.

For assistance with setting up a Henson Trust, please contact: