What Is a Henson Trust?
A Henson Trust is a discretionary trust recognized in Canada that allows a trustee to hold and manage assets for a beneficiary with disabilities. Because the beneficiary has no direct control or ownership, the trust assets don’t count as personal assets for means-tested government benefits.
Key Features
- Trustee has absolute discretion over distributions.
- Beneficiary can never demand payments, so assets remain “off-limits” to government asset tests.
- Can be funded during life or through a will (estate planning).
- Supports a wide range of needs: housing, education, therapy, recreation, travel.
When to Use
- If you’re planning for a loved one with a disability and want to preserve provincial disability benefits.
- To ensure long-term financial support without jeopardizing eligibility.
- As part of a broader estate plan alongside other vehicles (RDSP, life insurance, etc.).
Next Steps
- Consult a lawyer familiar with provincial disability legislation.
- Decide on trustee(s) who understand discretionary duties.
- Draft the trust agreement or will clause outlining distribution guidelines.
- Coordinate with financial and tax advisors for optimal structuring.