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Disabled Beneficiary

Case Study | Feb 3, 2014

The Problem

The father of a disabled, 30-year-old son died suddenly without leaving a Will.

His estate is worth under $100,000. His son and his sister are the only surviving family members. The son lives in a group home and collects benefits from the Ontario Disability Support Plan (ODSP).

The son is the heir at law, but due to his disability is unable to apply to court to be appointed as the executor of his father’s estate. Who will administer the estate? The son’s entitlement to government benefits is based on the son’s income and assets, not exceeding limits established by statute. If the inheritance passes to the son directly, he will exceed the government’s minimum requirements for income and assets and will lose his entitlement to ODSP benefits. 

Our Approach

We arranged for the aunt to apply to court to be appointed as executor of the estate and she will administer the estate without a Will. To help preserve the son’s entitlement to ODSP benefits, we created a special type of trust, called an inheritance or expense trust, and had the residue of the father’s estate held in that trust.

The Result

The aunt was appointed as trustee and given the power to allocate the income and capital of the trust to the nephew within the permitted limits authorized by statute. Since the son did not become the owner of the assets that came from his father’s estate, he was not disqualified from collecting ODSP benefits.

© 2015 Lawrence, Lawrence, Stevenson LLP

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