15 December, 2016 Financial Planning

5 Steps to Ensure Your Loved One with Special Needs is Taken Care of Financially

If you have a loved one with special needs, we understand how important it is to make sure they’re taken care of financially. If anything should happen to you, you want to know that they’ll have financial security. In Ontario, there are a number of ways to set up your loved one with special needs with financial security.

Henson Trusts

A Henson Trust involves putting away assets for a person with a disability. To access these funds, the disabled person has to have a trustee. The Henson Trust allows them to generate up to $6,000 in income per year, but anything else they take out of the trust has to have a valid reason or need, including housing, wheelchairs or medical expenses. While Henson Trusts restrict how much money can be taken out, they are easy and quick to set up. Lifetime Benefit Trusts can also be included in a Henson Trust.



Instead of a Henson Trust, you may want to consider an RDSP. This is a long-term savings plan consisting of personal contributions and matching grants and bonds. As the plan holder, you control the investment, and your beneficiary receives the contributions and government proceeds. Beneficiaries must be Canadian citizens with a social insurance number, and be eligible for the disability tax credit.

DTC (Disability Tax Credit)

The Disability Tax Credit helps reduce the amount of income tax people with disabilities have to pay. To be eligible, a medical practitioner has to submit a description of the person’s disability and prove that it’s a long-term impairment. The DTC provides people with disabilities or those who support them with relief for disability costs.

Child Disability Benefit

Parents with children under 18 who are eligible for the DTC may also be eligible for the child disability benefit (CDB). This tax-free benefit gives low- and medium-income families up to $2,730 per year if they have children under 18 with “severe and prolonged impairment in physical or mental functions.”

Learn more about why you should choose an RDSP, and contact us if you have any questions!