With proper planning, the parents of a child with special needs can provide them with a secure future, Ottawa disabilities and estate planning lawyer Kenneth Pope tells AdvocateDaily.com.
Pope, principal of Kenneth C. Pope Law, says families often make their first visit to him after the child is registered in school and the parents sometimes find they have a little more time to look ahead.
“Generally speaking, the family doesn’t know what needs to be done,” he says. “In other words, they don’t know what they don’t know.”
Pope suggests several approaches that can save families money and help them access funding available through government programs.
If the person with the disability is 18 years of age or older and living at home they can receive the Ontario Disability Support Program (ODSP).
“They invariably receive the room and board amount of $881 a month. And one of the first things we do in almost all these cases is to get that benefit increased to the shelter plus supplementary of $1,151,” says Pope.
“If the child happens to be in a supported living facility or living on their own, they’re entitled to the full $1,151. When the child is living at home with the parents, they don’t receive the entire amount.”
Wills are an important planning tool that can prove to be very beneficial, particularly if they include a Henson trust, which allows the parents to provide for the future of a child with special needs.
In Ontario, Pope says, a person receiving disability payments is only allowed to have $40,000 in assets at any given time, but with a Henson trust, all inherited assets are placed under the care and control of a trustee who administers it on behalf of the beneficiary.
A Henson trust has two important elements that can be included in simple wills, Pope explains.
The first is that they contain a provision that the trustee will have absolute, unfettered discretion, which extends to not actually giving anything to the beneficiary.
“You naturally want to carefully pick one or more trustees who are appropriate, sufficiently generous and prudent,” Pope says.
Secondly, in a non-vesting clause, the child is deemed to not have received the inheritance personally and therefore is still eligible to receive disability benefits.
Creating a power of attorney is another important aspect, Pope says.
“With certain young adults it’s inevitable that some doctor, hospital, institute, or government organization will not listen to the parents,” he says.
A power of attorney makes it clear that the person with a disability authorizes their parents to assist with decision-making and allows them to receive otherwise private medical information.
To help with the planning process, Pope has created a short intake form he asks families to complete, which he says saves them a great deal of time.
It begins with the basics about the family and the person with the disability. There are key questions, including some around employment that can factor into how the planning is approached, he says, adding some employers, such as school boards and municipalities, provide pensions and benefits, which can introduce new considerations.
A teacher, for instance, may retire with a $60,000 annual pension. As a dependent, the adult child with disabilities may be able to collect half of that pension upon the death of the parent, but it would disqualify him from receiving the annual $13,000 Ontario ODSP.
“From an estate planning perspective, if your child is going to be receiving an income of $30,000 per year and is not on ODSP, this changes the picture of the estate planning discussion,” Pope says.