We all know that life poses challenges for all of us. Without a doubt if you have a disabled child or person living at home, either because they were born that way, or they had an accident, or they became sick, life is just a little more challenging for you.
Most likely the disabled person is receiving some form of government assistance. What happens to disabled dependents when their caregivers pass away? Sometimes parents of disabled children will come to my office. Most often what such parents want to do is to make a will. And their instinct is to divide the inheritance equally among all their children.
Usually dividing the inheritance equally among the children when one of the children is disabled is a very bad idea. When a disabled person is receiving government assistance and then receives an inheritance the government will stop paying the benefits until the inheritance is all used up.
As a general rule, if the disabled person is receiving a government benefit for which they have paid premiums – like the federal CPP disability benefit — then this should not be impacted by receiving an inheritance. These are benefits that the person earned through their employment and or premiums paid.
However, if the disabled person is receiving Ontario Disability Support Program benefits then these benefits will likely be cut off when the disabled person receives an inheritance.
There is a perfectly legal way to avoid the government cutting benefits to the disabled person. If the will of the caregiver is prepared so that a trust is created for the benefit of the disabled person then government benefits should not be cut off if the trust is managed well.
This is a special type of will. The inheritance is not given to the disabled person directly. Instead the inheritance is given to a brother or sister or some other trusted person and the inheritance that is suppose to go to the disabled person is paid to them slowly over time and as needed. This way government benefits will not be cut off.
Make sure you lawyer is familiar with these types of wills which are normally referred to as Henson Trust Wills – or you can call our office and we will be happy to prepare such a will for you.