Henson Trusts: Supreme Court Clarifies And Approves

Introduction: What is a Henson Trust?

A Henson trust is a type of trust that is settled for the purpose of benefitting a person with disabilities. The purpose of a Henson trust is to provide supplemental income for a disabled beneficiary, while still keeping them within the acceptable limits required so that they can continue to earn income support from various government programs such as the Ontario Disability Support Program ("ODSP"). Many other governmental programs use income tested eligibility as well.

By keeping the trust assets separate from those of the beneficiary, a Henson trust can serve to provide the maximum supplementation for a disabled beneficiary while not running afoul of the income tested requirements of programs such as ODSP. The name comes from the famous 1989 Ontario Court of Appeal Case Ontario v Henson. Recently the Supreme Court of Canada had its first opportunity to weigh in on the concept and its guidance suggests that Henson trusts