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Trust options for parents of children with disabilities

The Ontario Disability Support Program (ODSP) can be a great help to parents of children with disabilities. However, payments from the program end when your child reaches age 65. Additionally, your child's receiving an inheritance can result in the loss of ODSP benefits.

There are steps you can take, however, to supplement your child's funds and protect ODSP benefits as your child gets older.

To qualify for ODSP benefits, a person is not allowed to have more than $5,000 in assets. Some assets are exempt, though: for example, a person's vehicle or primary residence.

Setting up a trust is one way of supplementing ODSP benefits and ensuring that your child is supported past age 65.

If properly set up, the trust can be funded by an inheritance or a life insurance policy. An important part of this strategy, which pertains particularly to a Henson trust, is that the distribution of the funds is at the trustee's absolute discretion. The trustee decides the amount and frequency of distribution.

Because the money is held in trust -- and not technically in the estate of your child -- he or she can remain eligible to collect ODSP benefits while also benefiting from the trust.

In planning for the well-being of your loved ones, there are numerous trust options. To learn more about these matters, please see our overview of wills, trusts and general estate planning.

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