I want to leave money to my daughter who receives disability benefits. Will an inheritance affect her government assistance?

There are legal tools specifically designed to help you support your daughter while protecting her disability benefits. In your will, you can set up a special type of trust commonly called a Henson trust. 

In BC, people receiving disability assistance must keep their assets below a certain limit. For someone with a disability designation, that limit is $100,000. (Certain assets are exempt from that limit calculation.) If your daughter receives an inheritance that pushes her assets over this amount, she could lose her benefits. This creates a difficult situation where receiving money could make her worse off.

How a Henson trust works

A Henson trust is a special arrangement you create in your will. Instead of giving money directly to your daughter, you leave it in a trust managed by a trustee you choose.

Pick someone you trust to make good decisions for your daughter. The trustee will have complete control over when and how much money to give her. They should understand your daughter's needs and be willing to manage the trust for her lifetime.

Under this kind of trust, your daughter wouldn’t be able to demand money from the trust or control it herself. The trustee can use the money to pay for things that improve her quality of life, like special equipment, vacations or other expenses that her benefits don't cover. The trust must explain what happens to any remaining money after your daughter passes away.

If the trust is structured properly, the government won’t count money in the trust towards your daughter’s asset limit. This means her disability benefits continue unchanged.

Who can help

Setting up a Henson trust requires careful planning. You should work with a lawyer who has experience with disability trusts. They'll make sure the trust is set up correctly so it protects your daughter's benefits. They can also tell you about other legal options, such as if you want your daughter to have some control over the money in the trust.