For more than two decades, we at the “Special Needs” Planning Group have assisted countless families, lawyers and planning professionals in the preparation of plans that will ensure a decent quality of life for people with disabilities. Our program helps to develop the plan before the death of the parents and continues to provide support after they have passed. The well being of people with disabilities is being enhanced through our plan. We call this plan The “Special Needs” Plan©. It has evolved to the point where it addresses the needs and concerns of parents of people with disabilities, the people themselves and the needs of the Trustees left behind. The following segment of the web site will describe some of the basics of that program.
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 found in most plans that are created in conjunction with The “Special Needs” Planning Group. Typically, these plans will contain the following:
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 it usually establishes the Henson Trust.
2) Henson Trust: Virtually all “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 sons and daughters 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. In some cases, the person with the disability should also establish Power of Attorney for themselves.
4) Registered Disability Savings Plan: The RDSP is an component 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 The funds that are withdrawn from the fund have some restrictions as to timing and amount but they can be used for any purpose.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. This is a way for families to provide large sums of money to the trust with small monthly deposits to an insurance policy.
6) Life Plan: As part of the planning process, we share a “Life Plan Guide” with families. 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’s Trustee Support Program 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. (Please refer to the Trustee Support tab of the web site for further details)
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 dependent 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 Henson Trust, the Registered Disability Savings Plan, our Wills, Powers of Attorney and others..
The first step in the planning process is 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 make certain that existing life insurance policies on the lives of the parents do not name the person with a disability as either the primary or contingent beneficiary. We also ensure 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, RDSP’s and other detailed financial issues are also examined. Parents are then provided with a letter that outlines areas of concern and methods of correcting any problems that are uncovered.
The next step of the plan is to establish the funding mechanisms for the Henson Trust that will be established in your Wills. Generally, people use affordable permanent Life Insurance Policies 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 the quality of life of the person with the disability.
One of the main benefits of the “Special Needs” Plan is the manner in which the Henson Trust is handled after your death. We are very pleased to offer Trustee Support Program to Trustees of Henson Trusts. We train and guide 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.
The following diagram represents what we call the Quality of Life Pyramid. It demonstrates the interaction 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 sons and daughters after they have reached age 18. In order to qualify for this pension, people must adhere to a cumbersome set of rules that are outlined under the ODSP tab of the web site. Sadly, these regulations force our sons and daughters to live well below the poverty line and that highlights the necessity of the Henson Trust to enhance their quality of life.
The 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 proceeds are delivered, tax free, to the Trustees of the Henson Trust along with any allocations from the parent’s estate. 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 Trustee Support Program.
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.
Mutual funds, approved exempt market products and/or exchange traded funds are offered through Investia Financial Services Inc.
Insurance products are offered through PPI Management Inc., a national licensed insurance marketing organization that support independent advisors with their business, and through multiple insurance companies.