inheritance and ODSP
Mary
Please help me. My mother is looking a vary large sum of inheritance
from her mother who recently passed away. My mother is on ODSP. She
has a mental illness and is not able to work. She was also very
dependent on my father regarding finances her whole life. They have
been divorced for 9 years now. I have a few questions regarding her
inheritance. I fully understand that she may lose her ODSP because of
her inheritance. However my mother doesn't need much and she would
like to help me and my sister out.
1. If she receives the inheritance and then gives most of it away will
she still be able to collect her ODSP?
2. Can she purchase a condo? I understand that the amount for her
living costs may decrease as the only bills she will have will be
condo fee's, hydro, gas, telephone and cable. If she purchases a condo
can it exceed the $100,000 max?
3. Can she purchase a car? She currently has a vehicle but it is in
need of repair. She has a hard time keeping up th repairs so she would
like a newer vehicle that will require minimal repairs.
4. Does ODSP look at inheritance as an income or do they only look at
assets? If only assets then is the best way for her to keep her ODSP
is to give the entire inheritance to me?
To make it clear my mother wants to give her inheritance to her
daughters. The only thing she would like from it is to purchase a
condo and a vehicle. Is it better for her to give the entire amount to
me and I purchase the vehicle and condo?
Please help.
Mary
justice4odsp
I'm not a professional so I'm only going to give you part of an answer
right now. What I know is that giving it away is not an option unless
it has been pre-approved by ODSP.
Buying a house or a vehicle are, to the best of my knowledge, the only
allowable assets that she can buy with the clawback from ODSP.
If the money is invested in a Hanson Trust and she can find executors to
look after the distribution of funds, then it can be invested and she
can receive an allowance from it each month, use it to pay for
'disability related' expenses, etc.
This is just an overview. The best thing you can do is to get a lawyer
or, if someone in this group is more in the know and confident about the
answers they give, follow whatever advice they have to give.
justice4odsp
On 03/09/2011 11:33 AM, Mary wrote:
> 2. Can she purchase a condo? I understand that the amount for her
> living costs may decrease as the only bills she will have will be
> condo fee's, hydro, gas, telephone and cable. If she purchases a condo
> can it exceed the $100,000 max?
>
> 3. Can she purchase a car?
>
erekale...@gmail.com
From one perspective this money should support her and her needs without
consideration of your inheritance...or if you (daughters) plan to take it
you all should support her with it...
From another perspective - While she is alive she is allowed to have certain
things though...
1. - Improper disposal could be viewed as an attempt to circumvent the
policies of ODSP and frowned upon...so now she cannot just give it to you
http://www.mcss.gov.on.ca/en/mcss/programs/social/directives/directives/ODSP
Directives/income_support/4_4_ODSP_ISDirectives.aspx
but if she is unfit to make financial decisions then maybe the daugheters
could become trustees...i don't know that this is good idea or in her best
interest - I wonder what she thingks about that - she is fit enough to
drive...hmmmm
assets overview:
http://www.mcss.gov.on.ca/en/mcss/programs/social/directives/directives/ODSP
Directives/income_support/4_1_ODSP_ISDirectives.aspx
2. you can own any size house you want - money received is income in the
month it is received and an asset in the months after,,,,unless for example
The asset is put in in a Henson trust as the provisoin of a will...maybe if
she is unfit you can manage it for her at arms length.
http://www.mcss.gov.on.ca/en/mcss/programs/social/directives/directives/ODSP
Directives/income_support/4_7_ODSP_ISDirectives.aspx
The asset is determined and planned to be used for an allowable asset within
a reasonable time like 12 mnths.- like ahouse - but again up to 100,000 can
be kept...it is better she buys a house right away with everything she has
asinterst is so low...and maybe gets a equity loan for enough ot buy a
car....and continues to receive shelter to cover her costs of the house.
Cars are an allowable asset - but an utter waste of moneu in my honest
opinion - definitely more a liability than an asset - forget the new and buy
a way better used for way cheaper..dealer have about 25% or more to move on
many used vehicles on a bad day (fleet vehicles) (18k can become $12,00 k
for a vehicle that originally listed new at 22K - and btw do not pay
surcharges - no one in my family ever did - just be prepared to walk away
from the deal if they try - let them know that after they have given you a
grea t price...and the last one inegotiated for someone - I got 4 winter
tires on rims thrown in and a high end security syste,)
http://www.mcss.gov.on.ca/en/mcss/programs/social/directives/directives/ODSP
Directives/income_support/4_5_ODSP_ISDirectives.aspx
gifts and voluntary payment decide a limit on how much windfall she can
take exempt every year...if the estate paid her $6000 a year that would not
interfere with her odsp - if it came from a trust...
http://www.mcss.gov.on.ca/en/mcss/programs/social/directives/directives/ODSP
Directives/income_support/5_8_ODSP_ISDirectives.aspx
erekale...@gmail.com
already.....
The house can be in your moms name and there is no limit...youare allowed
shelter and 1 car exempt...
But cash can be considered income....unless you have a plan to buy a
house...they can let you hold onto it for a bit while you shop...
No reason for interruption in support if you play by the book...and having a
lawyer is good who knows this stuff just because you wont get treated
unfairly - nice to have witnesses then everyone has to do their job...assume
your mom is going to live another 10 or twenty years...it is the ODSP that
are suppoed to advocate for her welfare if she qulaifes and help her
toundersand how to live well...
-----Original Message-----
From: odspfi...@googlegroups.com [mailto:odspfi...@googlegroups.com]
On Behalf Of Hope
Sent: Saturday, September 03, 2011 6:21 PM
To: ODSP Fireside
Subject: [odspfireside: 39647 ] Re: inheritance and ODSP
It is best if you seek legal advice so not to screw up her ODSP as she
needs to be on it. You CAN buy a house and car on ODSP. But it has
to be in someone else's name (the house). I think. I don't know for
sure but the moment in excess of $100K lands in her name, she's off
ODSP. BUT, she can spend it down and be re-instated. But I would
advise you to keep your mother on ODSP as she needs that income.
You can see or call Ken Pope in Ottawa. Do a Google search on Ken
Pope Law. He serves clients all across Ontario by phone.
Melanie
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Bill Higgs
Bill
Soraya
Graeme Treeby
off list and I will be pleased to give you some suggestions.
In addition, the use of a lawyer will be very costly so perhaps we should
talk first.
Cheers...Graeme
Graeme S. Treeby
The "Special Needs" Planning Group
70 Ivy Crescent, Stouffville, ON L4A 5A9
Phone/Fax 905 640-8285
www.specialneedsplanning.ca
-----Original Message-----
From: odspfi...@googlegroups.com [mailto:odspfi...@googlegroups.com]
On Behalf Of Mary
Sent: September-03-11 11:33 AM
To: ODSP Fireside
erekale...@gmail.com
erekale...@gmail.com
Which advice do you like soraya…not sure what youa reposting to – or is it just the whole thread?
BILL
I don’t see anywhere in the directives that a first vehicle actually has a limit….(but again why would you spend more than $8000 - $12000 on a very good almost new vehicle with warranty and save yourself twice the sticker price anyway – my $500 car has saved me $150 a month off insurance for 8 years as well and it has ran better than any new car I woned…it looks bad now, but is safer andmore reliable than many of my neighbors cars….
Find an old car of a good year that many are still on the road ..that does not look abused.
The limit as I recall it is on a second vehicle = $15,000 is the max asset value exepmt
From: odspfi...@googlegroups.com [mailto:odspfi...@googlegroups.com] On Behalf Of Soraya
Sent: Sunday, September 04, 2011 6:03 AM
To: odspfi...@googlegroups.com
Subject: Re: RE: [odspfireside: 39657 ] Re: inheritance and ODSP
What terrifc advice!
jbkeh
not have assets above the limit and deliberately impoverishing herself
would be fraud.)
2. Yes. A principal residence is an exempt asset. Further, she can set
aside the portion of the inheritance she wishes to spend on the condo
(WITH THE PRIOR KNOWLEDGE OF ODSP) for up to a year (no need to rush
out and buy something immediately).
3. Yes. The first (or only) vehicle is an exempt asset but here there
is no provision for setting aside money for a future purchase.
4. Income in the month received and an asset thereafter.
Forget a Henson trust - that ship has already sailed (her mother would
have had to establish it before she passed on). The question how your
mother can shift the (remaining) money into exempt assets. One way is
a Registered Disability Savings Plan, if she has or can obtain a
Disability Tax Certificate from Revenue Canada. Another is a form of
life insurance that will pay out over time. That's Graeme's thing...
If your mother wants to take care of her daughterS, why do you want
her to give her money only to YOU?
On Sep 3, 11:33 am, Mary <marygood...@gmail.com> wrote:
> 1. If she receives the inheritance and then gives most of it away will
> she still be able to collect her ODSP?
>
> 2. Can she purchase a condo?
>
>
> assets?
>
justice4odsp
The rules to get current existing funding, simply do not work for us poor people on ODSP.
justice4odsp
Soraya
Soraya
Laura@AdvocacyHamilton
My mom passed away 2 yrs ago and this is what I learned about
inheritance.
You have to tell her worker about it IMMEDIATELY and ask for time to
disperse the money into exempt assets ie house and car. You literally
will receive a letter outlining how long you have before she is cut
off income support. Mine exemption was for 6 months time to invest
it. The assets can be in her name as owner because they are exempt
from asset calculation. Be careful with the amount she spends on
vehicle and consider insurance costs monthly. You have to explain how
she is able to afford the insurance.
Almost zero chance they will allow her to give the money to her
daughters. ODSP is a last resort income replacement. If there is
residual funds from the purchase of exempt assets they will require it
to be placed in a trust for her sole benefit as this will save ODSP
money by her having funds to take care of herself. The max amount in
trust is $100,000. Even if the daughters were allowed to be appointed
executors of her trust every single penny must be accounted for in her
interests ie can't take 500 to buy something for yourself. Arms
length execuator is needed and safest.
Depending on her age it could also possibly be placed in RDSP for
fixed income come retirement age. RDSP are now exempt assets in
Ontario. The max. in RDSP is $200,000.
Bottom line: This is why estate planning is so crucial for those who
are beneficiaries and on ODSP. If the estate had been made out to
give a portion of the sale of say a house to the grand-daughters none
of this would be an issue. Seek out lawyers but remember ODSP is a
last resort, for when you don't have money, if you get some you can't
give it away and stay on the system.
StarTears
disperse the money into exempt assets ie house and car. You literally
will receive a letter outlining how long you have before she is cut
off income support. Mine exemption was for 6 months time to invest
it. The assets can be in her name as owner because they are exempt
from asset calculation. Be careful with the amount she spends on
vehicle and consider insurance costs monthly. You have to explain how
she is able to afford the insurance.
Almost zero chance they will allow her to give the money to her
daughters. ODSP is a last resort income replacement. If there is
residual funds from the purchase of exempt assets they will require it
to be placed in a trust for her sole benefit as this will save ODSP
money by her having funds to take care of herself.
erekale...@gmail.com
I am sorry for your upset….it was just an honest question – I wondered - that is all…
Never asked you to defend my posts or anyone elses…just honestly wondered because you replied and cut everything previous off your reply so for someone like me who receives it in email – there was not context
I do not have a problem, that was just an innocent question, don’t have a rock either…at least not one as big as the chip on your shoulder – there is another expression that is yours for the taking J
Maybe it is the fact that the email is impersonal
I agree I like helping people and I like threads that everyone chips int to help and sometimes people challenge each other and even disagree…..
From: odspfi...@googlegroups.com [mailto:odspfi...@googlegroups.com] On Behalf Of Soraya
Sent: Sunday, September 04, 2011 2:31 PM
To: odspfi...@googlegroups.com
--
erekale...@gmail.com
Again I don’t believe in wasting money on cars –
But insurance could be paid out of the $6000 she is allowed to receive in gifts exempt every year.
Remember ODSP can only make decisions after the fact….
So that was a good idea – istar
The estate lawyer and trustee can decide anything they want,,,,odsp cannot decide how the money is disbursed – they can only rule on the funds received by a recipient…..
As daughters you can contest the will …..no?????
As daughters you can probably also – with moms agreement – take power of attorney…maybe that is an option….
One thing is for certain – ODSP client service reps think they can just demand any piece of information their heart desires….statues permit them to obtain what is necessary….in my poinoin and in theopinion of many – they ask for way to o much info – invasion of privacy….
My point is that while your mom has to try to get any money coming to her…..and give them info she has….the estate does not have to tell ODSP how much she is getting or has…..and if that paperwork is not released to her and funds are disbursed by reigning third party – lawyer…trustee…esecutor….ODSP can ask your mom…your mom can reasonably ask some third party…they can say no and your mom can report back that she asked….
6 months may be one csr’s time limit – but you can ask for extensions for reasonable explanations on anything in odsp – that I know…
Heck I waited 6 monthd of rthem reply to me ….they are supposed toreurn calls within 24-48 hours….
And as disabled we cannot move as fast…and things do get in our way that are beyond our control…
aside
I would not deal with a csr though – I would ask for a meeting with sa director…..
From: odspfi...@googlegroups.com [mailto:odspfi...@googlegroups.com] On Behalf Of StarTears
Sent: Sunday, September 04, 2011 5:34 PM
To: odspfi...@googlegroups.com
--
Soraya
Soraya.
B.Duns
inheritance is exempt up to $100,000.
assuming it's more than that you would have to put it into a henson
trust, in which case any amount is exempt.
read more here: http://www.mcss.gov.on.ca/en/mcss/programs/social/odsp/income_support/odsp_inherit.aspx
and here: http://www.mcss.gov.on.ca/en/mcss/programs/social/odsp/income_support/odsp_trust.aspx
Laura@AdvocacyHamilton
I understand it was the grandmother who passed away. If the grand-
daughters are concerned about receiving funds from the estate, I am
assuming the estate was left to the ODSP recipient in its entirety.
If the girls were named specifically in a will, then there would be no
issue as ODSP cannot stop an executor from distributing it as written
in a will. If there was no will, it goes to first next of kin, her
daughter not the grandchildren.
Someone mentioned contesting the will but that will be costly. They
would need to prove in court that the grandmother's intention was be
that the ODSP recipient divide it among her children.
If there was an insurance amount paid that does have to be declared
immediately as income, you can minus funeral expenses etc. As for
estates, if she is the sole beneficiary, she being the mother, ODSP
person, even if the amount is in trust with a laywer during probate/
estate sale you still have to let ODSP know. It is the recipient's
asset no matter where it is held.
I seriously advise that all people on ODSP make sure that Henson
Trusts, will s etc be made and very specific. A lawyer familiar with
ODSP directives is important as is the foundation mentioned earlier in
this thread. No one likes to talk about this stuff but being
unprepared can leave you in a huge bind at a time in your life where
grief makes it hard to focus and advocate for yourself. It will
avoid the headaches I have had with ODSP, taxes etc I have had the
past couple of years too.
Peace,
Laura
erekale...@gmail.com
room...
3. you can set aside money for many things with ODSP knowledge - it never
hurts to ask - get their answer in writing....- especially disability
related - or a second residence if it is deemed a benefit to your health -
4
Henson trust ship still in the harbor - - - I wondered about the fact that
she is to receive it and therefore hasn’t yet - an estate takes time to
settle and a lot can happen and she may never receive it....she does not
have absolute control over that ...
She could be willed a billion dollars, but if the estate is challenged by a
creditor or a family member to have it distributed a different way....ODSP
has no jurisdiction over that...
They can only decide on what happens after your mother receives the money
and how....
**********************************************read this
For all I know there might not be a billion dollars left...if she receives
10% of nothing or the executor decides it is to be dispensed 500 a month
until completion---that is exempt to your mother.....
So during the process of settleing the estate , which cannot be paid out
until the taxes are done etc anyway.....she could recive $500 a month....if
the executor feels there is a enough to cover it....
***********************************************
-----Original Message-----
From: odspfi...@googlegroups.com [mailto:odspfi...@googlegroups.com]
On Behalf Of jbkeh
Sent: Sunday, September 04, 2011 12:52 PM
To: ODSP Fireside
erekale...@gmail.com
$500 month , and maybe put it into a trust....
With rrsp the house etc - it might be wise to talk to an accountant and
alawyer - and a financial planner...'
Rrsp if it changes over - what does that cost her, you etc
-----Original Message-----
From: odspfi...@googlegroups.com [mailto:odspfi...@googlegroups.com]
On Behalf Of B.Duns
Sent: Monday, September 05, 2011 10:05 AM
To: ODSP Fireside
--
StarTears
I understand it was the grandmother who passed away. If the grand-
daughters are concerned about receiving funds from the estate, I am
assuming the estate was left to the ODSP recipient in its entirety.
If the girls were named specifically in a will, then there would be no
issue as ODSP cannot stop an executor from distributing it as written
in a will. If there was no will, it goes to first next of kin, her
daughter not the grandchildren.
Someone mentioned contesting the will but that will be costly. They
would need to prove in court that the grandmother's intention was be
that the ODSP recipient divide it among her children.