Can a Henson trust be set up after death?
A trust can be created and become operational during your lifetime (inter vivos) or it can be created and become operational upon your death through the terms of your will (testamentary).
What happens to a Henson Trust after 21 years?
“The trust can sell the property before the 21-year rule, so they are still being taxed on the gains but at least they sold the property and received the proceeds. They will now actually have the cash to pay the tax on that capital gain.”
What type of trust is a 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.
Who is the beneficiary of a Henson trust?
3. The beneficiary must be the person who established the trust (the “settlor”) or must be the settlor’s current or former spouse or common law partner, child, stepchild, grandchild, step-grandchild, great grandchild or step-great grandchild.
How much does it cost to set up a Henson trust?
The legal costs for wills and trusts range. It will depend on the lawyer and the complexity of your situation. My suggestion is that you be prepared to spend $1,500 to $3,000 for the will, trust, and powers of attorney (a discussion for another day).
How much can you put in a Henson trust?
You are allowed to contribute up to $200,000 to your child’s RDSP, but you don’t need to deposit near this amount in order to maximize government contributions. For many people, $30,000 spread out over the course of a number of years is all it takes to collect all the government contributions.
Can a Henson Trust have multiple beneficiaries?
A trust can have one beneficiary or multiple beneficiaries. The legal relationship is often described in a will or other trust document. There are two types of trusts: discretionary, often referred to as a Henson trust, and non-discretionary.
Will I lose my disability if I inherit money?
Social Security Disability, like Social Security, is not a means tested program. Therefore, your Social Security Disability benefits will not be affected by any change in your assets or your income. Furthermore, receiving an inheritance will not have any effect on your monthly Social Security Disability benefits.
How are Henson trusts taxed?
Tax Treatment of a Henson trust Trusts are separate taxpayers that must file their own income tax returns. Any income retained in trust will generally be taxed in the hands of the trust, and any income paid out of a trust to a beneficiary is generally taxed in the hands of the beneficiary.
How is a Henson Trust taxed?
What happens to a Henson trust when the beneficiary dies?
Death of Beneficiary: A Henson Trust must prescribe how any remaining portion of the Trust will be distributed on the death of the Beneficiary. Failure to account for the final distribution of the Trust will result in the Trust being considered an asset of the Beneficiary for the purposes of ODSP.