Over the years, we at the "Special Needs" Planning Group have worked with countless families, lawyers and planning professionals. This interaction has allowed us to develop an effective program to provide for the well being of people with disabilities. We call this program the "Special Needs" Plan. It has evolved to the point where it addresses the needs and concerns of parents of people with disabilities as well as the people themselves. The following segment of the web site will share that program with you.
Every family is unique. Because of this, there are no two "Special Needs" Plans that are exactly alike, so, to describe a "typical" plan is difficult. However, there are common items which are usually found in plans that are created in conjunction with The "Special Needs" Planning Group. Typically, these plans will contain the following items:
1) Last Will and Testament: The Will is a crucial part of the "Special Needs" Plan. It spells out how you want your estate to be distributed after your death, and usually, it establishes the Henson Trust.
2) Henson Trust: Almost all of the "Special Needs" Plans will contain a Henson Trust. This is the vehicle which, under current regulations, allows us to leave money for the benefit of our children with disabilities without preventing them from participating in the Ontario Disability Support Program. It also becomes the primary source of quality of life funding for our sons or daughters with a disability after we have passed on.
3) Powers of Attorney: Parents of people with disabilities should ensure that Powers of Attorney for Property and for Medical care are established for themselves. This will ensure that care for their own needs will be available if they should become incapacitated in the future.
4) Registered Disability Savings Plan (Optional): The RDSP is an optional feature of the Special Needs Plan. It may provide additional support to the quality of life of a person with a disability in the long term. The funds that are withdrawn from the fund have some restrictions as to timing and amount but they can be used for any purpose. A full description of the RDSP can be found at the RDSP tab of this web site.
5) Special Insurance Policy: Most Special Needs Plans are at least partially funded by a life insurance policy taken out on the lives of the parents of the person with the disability.
6) Life Plan: As part of the planning process, we share a “Life Plan Guide” with our clients. This guide is a series of approximately 100 questions which are designed to take information from our memories and put them on paper. When parents die or are unable to care for their son or daughter, this document becomes a guide for the trustees and care givers with respect to their spending and care activities.
7) Planning Manual and Guides: The "Special Needs" Planning Group has developed a series of planning manuals, training manuals and guide books. These documents consolidate the information, thoughts, instructions and activities that are required into one location with an easy to follow, step by step process.
8) Trustee Support: The "Special Needs" Planning Group can provide support to the Trustees of the Henson Trust after the death of the parents. Trustees need to know how to operate the trust effectively, keep records, spend money within the directives of the Ontario Disability Support Program, and generally how to provide a decent quality of life to the person with a disability. The "Special Needs" Planning Group can provide support in all of these areas to be certain that the Trustees are not overwhelmed by the task.
9) Peace of Mind: The final and perhaps the most important piece of the puzzle that the “Special Needs” Plan contains is Peace of Mind. Parents establishing a “Special Needs” Plan get the Peace of Mind of knowing that a plan is in place; it will provide funding for the quality of life of their son or daughter with a disability; that they have provided financially for their son or daughter even after they are gone. The Trustees of the Henson Trust get the Peace of Mind of knowing that they can choose to be supported with information and guidance in their role as trustee; they will not be on their own; and that they have somewhere to turn for help in performing their task of being a trustee. The person with the disability gets the Peace of Mind of knowing that there will be a group of people surrounding them in the future to help them achieve the quality of life that they want and deserve. Everyone achieves Peace of Mind.
The basic purpose of the "Special Needs" Plan is to assist in providing your son or daughter with a disability with the "Quality of Life" that they deserve and are currently enjoying. At the same time we wish to protect their entitlement to the Ontario Disability Support Program and other Government programs. Many of these programs are based on the assumption that our children have very limited assets and income. In order to protect these entitlements, we must be certain that any planning steps that we take do not infringe on the government regulations. At the same time, it is imperative that our children do not outlive the benefits that they derive from our planning and as parents, we want to have plans in place that will ensure that our wishes will be carried out after we are no longer here to guide the process. Finally, we must be aware of the impact of the Succession Law Reform Act which requires that parents of financially dependant children provide for those children after they are gone. We can accomplish all of the above mentioned desires through the use of a variety of techniques and legal instruments such as the Absolute Discretionary Trust (also referred as the Henson Trust), the Registered Disability Savings Plan, our Will, Powers of Attorney and others..
The first step in the planning process was to discuss your existing plans with a "Special Needs" Planning Group Consultant. We examine the structure of the family, the financial resources and assets of the person with a disability, potential inheritance sources, and income sources now and into the future. We also discuss the goals and dreams of your family with regard to the needs of the person with the disability and attempt to determine the key players in your child's future. Areas that could be problematic are examined and sorted out. For example, we made certain that existing life insurance policies on the lives of the parents did not name the child with a disability as either the primary or contingent beneficiary. We also ensured that your son or daughter doesn't have excessive liquid assets in their own name. Wills, Powers of Attorney, RRSP Beneficiaries, Bank Accounts, Savings Bonds, and other detailed financial issues are also examined. Parents are then provided with instructions on how to correct any problems that we have uncovered.
The next part of the plan is to establish a funding mechanism for the Henson Trust account that will be established in your wills. Generally, people use a Life Insurance Policy issued to fund the trust. When parents die, the proceeds of the policy are paid directly to the Trustees of the Henson Trust so that they can invest and spend the money on enhancing your son or daughter's quality of life.
One of the main features of the "Special Needs" Plan is the manner in which the life insurance proceeds are handled after your death. We are very pleased to be able to offer Trustee Support in our program. We will train and guide your trustees throughout their tenure so as to ensure that they are not overwhelmed by the details of their tasks. Trustees are always delighted with the support that they receive. They realize that their duties are tremendously simplified once they take advantage of our expertise in the area.
HOW DOES THE "SPECIAL NEEDS" PLAN WORK TO PROVIDE PEACE OF MIND ?
The following diagram represents what we call the Quality of Life Pyramid. It demonstrates the hierarchy of the various funding mechanisms that will be available to provide the quality of life that our sons and daughters deserve. The first two levels of the pyramid are essential while the third is optional and should be considered if money is available to do so.
The first layer of the Quality of Life Pyramid represents the Ontario Disability Support Program. It is the disability pension that is available to our children after they have reached age 18. In order to qualify for this pension, people must adhere to a cumbersome set of rules and regulations which include living well below the poverty level unless their income and assets are in exempt formats.
The second or middle layer of the Quality of Life Pyramid is the Henson Trust. It is expected that the Henson Trust will be the primary source of money for quality of life purchases on behalf of the person with the disability. When parents die, the insurance policy money is delivered, tax free, to the Trustees of the Henson Trust. The Trustees spend these funds within the rules and regulations of the ODSP to enhance the quality of life of the person with the disability. Throughout this entire process, the trustees can receive support and guidance from a member of the Special Needs Planning Group.
The final layer of the Quality of Life Pyramid is the Registered Disability Savings Plan. It is an optional level of the pyramid and will generally only be entered into once the ODSP and Henson Trust have been secured. The funds that come out of the RDSP are viewed as being a "Top Up" to the Henson Trust funds. They may partially offset the negative effects of inflation on the funds that have been allocated to the trust.
The combination of the three levels of the Quality of Life Pyramid help to accomplish a family's goal of ensuring the quality of life of their son or daughter with a disability. The strength of each of the levels will determine the success of the planning effort. The protection of the Ontario Disability Support Program through the use of the Henson Trust will help to ensure that our sons or daughters will enjoy the quality of life that they deserve. The use of the optional RDSP may add further enhancements to that quality of life.
The unique design of the "Special Needs" Plan has many benefits over other less well thought out plans. They are:
a) The proceeds of the insurance components of the plan are not subject to probate fees, are paid tax free and are available almost immediately after the death of the parents.
b) The funding of the quality of life is guaranteed.
c) The plan protects entitlement to ODSP benefits.
d) Your wishes are passed down to the trustee and caregivers.
e) The trustee receives support throughout the entire process.
f) The role of the trustee is simplified.
g) There is significant investment flexibility available to the trustee.
h) Peace of Mind is provided to the parents, the person with the disability and to the trustee of the Henson Trust.