Inheritance

[Momin]

Hi,

I would like some info as how ODSP treat the money that you receive
through inheritance?

I might be able to receive some moner from my uncle's inheritance and
would like to start a small home based business on that, but i am not
sure how the ODSP will threat it?

The business might make money for 3 to 4 months, and i am not sure if
the ODSP income will continue while i operate the busines or not? Also
is it possiable to have a partnership with someone, while on ODSP
income?

Thanks

[abrowne]

Hi Momin,

Re inheritance ... it depends on the size of the inheritance and how you will

be receiving it.  Any inheritance received through some kind of trust is exempt

up to $100,000.  If it is a small inheritance, such as $20,000 ... you will be

ineligible for ODSP for one month, and if it is spent down by the following

month (e.g. on your business), then you will be reinstated.  A business is allowed

to have $20,000 in assets, separate from your personal $5,000 asset limit.

There are rules on business income and operating a business while on ODSP.

You should read my article on Earnings and ODSP, which is included at this

weblink:

http://home.cogeco.ca/~mmdilts/Earnings.htm

 

There is quite a bit written about self-employment income on this Page.  As for

whether you can have a business partner, yes you can.  You can then only

declare 50% of earnings from self-employment and 50% of expenses.

Angela

Momin <Mom...@gmail.com> wrote:

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[Karin]

Look under directive 4.7

http://www.cfcs.gov.on.ca/NR/MCFCS/ODSP/ISDIR/en/4_7.pdf

[egm]

Hello:

Wow - a lot of informative information out there. That is great.

There is also something called a Henson Trust, which is a completely
different trust than that of the Special Needs Trust that ODSP permits.
The Henson Trust does not have a maximum amount on it, whereas my
understanding of the Special Needs trust is that it has a ceiling of
$100,000.00 maximum. One lawyer he viewed as in the future the
government can always change the rules on a Special Needs Trust when
they are scrambling for money. A Henson Trust was accomplished in the
Supreme Court of Canada, by the Henson Family. I want to stress that
there is no limit at all in a Henson Trust. You do need a lawyer who
works with Henson Trusts in order to set this up.

Hope this information is useful.
Evelyn

[jar...@sympatico.ca]

Karin wrote:
> Look under directive 4.7
>
> http://www.cfcs.gov.on.ca/NR/MCFCS/ODSP/ISDIR/en/4_7.pdf

Be careful with this issue. Suggest obtaining legal advice from
knowledgable source . ODSP does not always follow own directives etc.
What you want to do is perfectly legit, it needs to be put into place
properly with a complete paper trail. Believe me we know and will win
in the end on this very issue.

[Michael Bird]

Off hand I seem to remember the amount of $100,000.00.  I don't know the technicalities, it'll be somewhere on the list of directives.   Hi Momin, Mike

[egm]

Henson Trust Specialist - Kenneth C. Pope, LL.B., TEP: Why Do I ...A
Henson Trust prevents a family member with special needs from losing
Ontario Disability Support benefits if they are left an inheritance.

www.kpopelaw.ca/whyhenson.htm

Another pertinent site. The more knowledge you have the better it is.

[egm]

Hi again:

Definately check with a lawyer if a trust is being made. I suspect
they may recommend the Henson Trust over the Special Needs Trust
because the government can always take away the latter, whereas the
Henson is entrenched in federal law (Supreme Court). A Province cannot
take this away, i.e. if another 'Harris-type' gets in power. ODSP does
not tell the recipients about the Henson Trust. One of the disability
groups here in Sarnia brought in a lawyer specifically on this topic
because the Henson Trust is so helpful for those on ODSP.

Here are some of the notes that I took:
- a Henson Trust is a court-approved shell game for recipients of
government sponsored benefits
- there are no restrictions
- can leave a house to someone in a Henson Trust
- there is no financial limit to the Trust
- there is no limit regarding the amount of money that can be withdrawn
at one time in the trust
i.e. buy a car
- can withdraw cash up to what ODSP says, and the rest are goods
purchased that do not count in the cash amount, i.e. new winter coat,
television, vacation
- the person who is leaving you the Henson Trust must specify this in
their will
- the technical reality is that the assets do not belong to the person
for whom it is created
- it is up to the sole discretion of the trustee
- this is a legal way around receiving the allowable amount that ODSP
permits
- can even use it for a vacation home if the doctor prescribes it
- audit trail: CCRA and the Provincial government
- file a copy with the Public Guardian and Trustee's office

A lot of people on ODSP and children with disabilities in this neck of
the province have a Henson Trust. If I am correct, I also believe that
a nursing home cannot access it, so if you were in a nursing home you
would not have to pay from this trust.

[egm]

F.Y.I. from: www.specialneedsplanning.ca/tools.htm

The Absolute Discretionary (Henson) Trust
In Ontario, perhaps the best way of providing for our sons and
daughters with disabilities while at the same time preserving their
entitlement to the Ontario Disability Support Program funding is by the
use of an Absolute Discretionary Trust following the Henson format. The
terms "Absolute Discretionary Trust", "Discretionary Trust" and "Henson
Trust" are often used interchangeably but all three when used in the
context of planning for a person with a disability refer to a very
specific type of trust. The Henson trust can be established either as
an Inter Vivos or a Testamentary Trust. The most commonly used type of
Henson trust is the Testamentary Trust established in a parent's or
caregiver's Will.

History of the Henson Trust
The Henson trust had its origins in the city of Guelph, Ontario. During
the early 1980's, a gentleman by the name of Leonard Henson lived in
the Guelph area and he had a daughter named Audrey. Audrey was a person
with a developmental disability and she lived in a group home managed
by the Guelph Association for Community Living. Leonard knew that if he
left his estate directly to his daughter, it would exceed the allowable
asset limits as set out by the Family Benefits Allowance (now called
the Ontario Disability Support Program). He realized that having assets
in the hands of his daughter directly would not be to her advantage and
that her benefits would be terminated until the assets were "spent
down" to a level below the threshold amount. In addition, Leonard's
wife had pre-deceased him and he had no other family. Therefore,
Leonard went about to find a way to leave his estate to his daughter
without interfering with her entitlement to government supports. He
conferred with a number of legal people and advocacy organizations and
even investigated what was going on in other jurisdictions within and
outside of Canada. Eventually, he discovered a technique that would
allow Audrey to retain her government benefits while at the same time
allowing her to receive quality of life enhancements from his estate.
That technique was the use of the Absolute Discretionary Trust to be
created in his Will as a Testamentary Trust. Leonard updated his Will
with his lawyer. Unfortunately, he then died. At that point, the Will
required the creation of an Absolute Discretionary Trust which
appointed the Guelph Association for Community Living as Trustee and
his daughter Audrey as beneficiary of the trust. Once Audrey died, his
Will instructed that the remaining funds in the Trust were to be passed
on to the Guelph Association for Community Living. The Ministry of
Community, Family and Children's Services, the ministry which controls
the FBA (ODSP), determined that Audrey had inherited the estate of her
father and since it was in excess of the allowable amount of assets,
they terminated her benefits. The Guelph Association for Community
Living challenged this decision and to make a long story short, the
Ministry took the trust and the Trustee to court. The first court found
that the funds contained in Audrey's trust account did not meet the FBA
(ODSP) definition of assets and therefore, it ruled in favor of the
Trustees. The Ministry was not at all impressed with this decision and
so they launched an appeal. The appeals ultimately reached the Supreme
Court of Ontario and in September of 1989, the appeal was dismissed.
The Government lost and what that decision did for families with a son
or daughter with a disability was to provide us with a vehicle in which
we can place assets for our children without disqualifying them from
receiving the ODSP payments to which they would otherwise be entitled.

[abrowne]

A Henson trust is good for large inheritances, something I will never have

to worry about ;-)  The key to this is this is an absolute discretionary trust

on the part of the "trustee".  Just pray if any of you get one of these, that

the "trustee" will be trustworthy and use it for what it is intended ...

 

Smaller ones can simply dealt with as other windfalls; that is, if you need the

money to pay off debts, purchase a starter home, buy a car, etc.  I just dealt

with somebody who had a $50,000 inheritance ... he had to go off ODSP for

a short time while he did this, but he was able to go back on after he used

the money for what was needed.

 

But definately check with a lawyer to ensure you are not going to be in trouble

first, before assuming it is okay to accept the funds.

A

egm <evelyngo...@canada.com> wrote:

Definately check with a lawyer if a trust is being made. I suspect
they may recommend the Henson Trust over the Special Needs Trust
because the government can always take away the latter, whereas the
Henson is entrenched in federal law (Supreme Court). A Province cannot

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[abrowne]

Charmaine,

I would then argue that it is a gift from a family member.  I successfully

argued that for a fellow who received a $5,000 inheritance.  He told ODSP

that it was a gift, even though he inherited it and ODSP did nothing.  You are

allowed $5,000 per year in gifts from family and friends.

 

Even then, Charmaine, if they ask you.  I am sure you have some use for

this money, especially as you are going to be newlywed?

A

Charmaine Jensen <charmai...@sympatico.ca> wrote:

Dear Angela,

 

On the subject of inheritances.

 

For instance, when my mother passes away.  She has an insurance policy of which me and my 2 sisters are benefactors of.  Each of us will receive approx $3500.00.

[abrowne]

Evelyn,

I am quite familiar with the laws of wills and trusts and have created a few

Henson trusts in one of my old positions I held. I am glad they exist, but there

needs to be something for people who do not have family support at all.

 

These laws and amendments assume that ALL people with disabilities have

parents or other close relatives with money who are willing to support them or

have something to will to them after they die.  Neither my husband or I have

any rich relatives and even the ones I have that have ANY money (even though

they are not really defined as "rich") will not even offer a dime to help me,

because they believe somehow it was my fault I ended up where I am.  When I

was bullied out of my last job, I received ZERO support from anybody ... in fact,

these same relatives assumed I must have done something to upset somebody

where I worked "because people just don't act this way by themselves".

 

As a result, I have not been able to rise back to my former status I had before

I was bullied out of that job.  I can't save ANY money; even if I could, ODSP will

claw back any savings I have beyond a certain amount.  I am constantly afraid

of what might happen if I lose ALL of my capacity to work ... even for a short

period of time ... or when I retire, I will certainly have nothing to fall back on.

There are certainly things the government has not anticipated happening or they

didn't consider reviewing as possibilities as federally, the retirement system is

still moving towards a user pay system (where if you don't have enough work

credits outside of CPP you essentially rely on subsistence government support).

 

Before I lost my last job, I had RRSP savings, a vehicle and was moving towards

home ownership and was planning a cross-Canada vacation with my husband

and then son (before daughter was born).  All that changed when I was pushed

out of my job.  I ended up staying in my previous place for an extra five years

(despite not feeling comfortable there).  I had to give up the vehicle as I could not

afford the insurance (as one doctor wrote me off for driving, and this was assuming

I could get my license back).  I had to withdraw ALL of my RRSP's which were not

a whole lot, but enough to cause a significant penalty upon withdrawing them at

the time.  Forget about the vacation.  You know, my husband and I NEVER EVER

had gone ANYWHERE on ANY kind of vacation together?  That's certainly less

likely now. My mother always wanted us to accompany her when she goes to the

Bahama Islands twice a year, but we would have to come up with the money for

our plane fare and pay part of the hotel fees, etc. which is way out of reach for me.

She keeps forgetting I have to account for four people, not just one.

 

I have clients whose parents give them $400-$500 a month until that $5,000 limit

is reached. Others have family that treat them to periodic vacations, spa weekends

or pay off certain debts for them, such as a car loan.Yes, these things are allowed;

yet, if you have nobody that can or will do that for you ... you are stuck, period.

My mother still thinks people can get jobs the same way they did in the 1970's

when she got her job with the civil service.  After working for three or four years

in short term, minimum wage or temporary positions, she saw an ad in the paper

for people to get tested for the civil service.  My mother was always an intelligent

woman, so she scored very high and had her pick of positions at the time.  There

are no jobs like that now ... for many of them that do exist, you have to be on the

union surplus list to even have a chance at them.

 

There are some good jobs I could have applied for and had half a chance of getting,

such as ambulance dispatch services when they moved this service/jobs from

Hamilton to Niagara.They started at $29/hour ... but, you had to have a car to get

there for their extensive training period and eventual hiring, hopefully.  Other jobs

I qualify for are either located outside the community or say up front "a reliable

vehicle and driver's license is required".  We may as well return to the days that

all marginalized people should just be told to sit at the back of the bus ... while

our laws may not tell us we have to do that, the prejudice and planning priorities

have the same effect on people like me.

 

I once asked my mother to assist me in purchasing a vehicle.  She told me NO;

I am supposed to do this myself.  "All you need to do is save $5,000 ... and then

start driving, etc.".  Yes, but the fine detail is that under ODSP, I have to make

$20,000 extra over and above what goes to necessities to "save $5,000".

 

A trap for sure with no door to escape from it.

A 

egm <evelyngo...@canada.com> wrote:

F.Y.I. from: www.specialneedsplanning.ca/tools.htm

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[Rosie]

Ok, am I the only one who thinks there's something wrong with having to go off ODSP and spend down an inheritance of $50,000 but being able to stay on it if you get a Henson Trust of $1 million? This just does not seem right to me. I know when my Dad dies, I will have *some* money but it won't be oodles. However, I would like to be able to stretch it out as long as possible to help life easier each month. I would actually like to invest it and only use the interest. (my dad is 81, but I'm still hoping I won't be getting it for a long, long time!)

 

Rosie

[Rosie]

Would they even know if you didn't declare it?

 

Rosie

 

 

----- Original Message -----

From: abrowne

To: odspfi...@googlegroups.com

Sent: Tuesday, December 06, 2005 11:47 AM

Subject: Reply: Re: Inheritance

Charmaine,

I would then argue that it is a gift from a family member.  I successfully

argued that for a fellow who received a $5,000 inheritance.  He told ODSP

that it was a gift, even though he inherited it and ODSP did nothing.  You are

allowed $5,000 per year in gifts from family and friends.

 

Even then, Charmaine, if they ask you.  I am sure you have some use for

this money, especially as y ou are going to be newlywed?

A

[corrinna]

Angela, you have put it very succinctly. I have no family to offer money,

no possibility of an inheritance, and no willingness from anyone to offer help. I have family

that actually asks ME to borrow money from! I have so little, and yet when my moms car

broke down, she asked me to loan the money. I don't know why , when I have less income

than anyone else in my family, why this would happen. I cant even get a ride from her without

coughing up 20 bucks for gas. I am venting, sorry. Just wanted to agree with your points.

 

----- Original Message -----

From: abrowne

To: odspfi...@googlegroups.com

[abrowne]

My client was only off ODSP for one month, and the balance of the cheque

went into a special account which was monitored by ODSP over a year.  He

had a number of expenses he needed to pay for (and we negotiated time for

our client in order to get his life in balance).  This was not a trust or any other

form of transfer, just a direct inheritance.  It was better than the first answer

he got, which was go off ODSP and "live off it" until it's gone.  With a Henson

Trust, yes ... you can have unlimited funds, but you have no control over the

money and some people DO end up with less than honest "trustees".

A

Rosie <msr...@cogeco.ca> wrote:

Ok, am I the only one who thinks there's something wrong with having to go off ODSP and spend down an inheritance of $50,000 but being able to stay on it if you get a Henson Trust of $1 million?

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[abrowne]

Corrina,

Yes, I will probably have a small inheritance when my mother dies, but I am

not a vulture chomping at the bit either ... I'd rather have my mother around

for longer.  Our relationship isn't the best, but I know how I felt when my

grandparents died and it certainly wasn't easy on me for several months.

My brother and I don't get along and my mother feels we'd be arguing about

everything, so she appointed my aunt as an executor.  She's pretty even-

handed about things, but I don't want to fight about something like that either.

These things are always fraught with emotion and I just tend to withdraw and

not get too heavily involved that way.

 

It is just the live family members that DO have resources are not the type

to be overly-charitable towards others.  The type of help I would prefer is the

type that would assist me in becoming more self-sufficient.  The people in

my family do not understand how hurtful it is how we are treated because we

do not have a vehicle.  They think we could just *get* one.  This goes along

with the rest of the public that have no idea what a trap this is.

 

I hope they increase the earnings exemptions.  I can't afford to lose dollar for

dollar from working anymore (e.g. ODSP does not compensate me for some work

related expenses, which can be expensive but they don't consider them to be

expenses ... well, if I didn't have to work I certainly wouldn't have to buy clothes,

have proper fitting shoes, get my coats tailored and dry-cleaned and so forth,

but then again, I can't even claim that against my business expenses, but I am

researching avenues on how this can be done and appealing if necessary as I

can't afford to dress in inappropriate clothing like ... when I am in court, etc.

 

I am spending time these days developing another type of business that may be

able to support me somewhat until Employment Supports straightens up their

act and I am more knowledgeable about what is going to happen to the paralegal

sector after Bryant gets his hands on it.  It seems anything that politicians touch

automatically turns to sh** ...;-)

Angela

 

corrinna <corrinna...@gmail.com> wrote:

Angela, you have put it very succinctly. I have no family to offer money, no possibility of an inheritance, and no willingness from anyone to offer help. I have family that actually asks ME to borrow money from! I have so little, and yet when my moms car

[Evelyn Gow-MacLeod]

Hi Angela:

You are right. Hang in there! I also don't have anyone to
give me a dime for anything either. Not even ten dollars
for my child at Christmas. Thank goodness some people have
others that will give them some money.

Please take care, Evelyn