The Supreme Court of Canada Rules on Henson Trusts

In the January 25, 2019 decision of S.A. v. Metro Vancouver Housing Corp, 2019 SCC 4, the Supreme Court of Canada commented for the first time on the interaction between a disabled persons right to a social benefits program given their status as a beneficiary of a Henson Trust.

The Henson trust is a tool often used by a disabled person and their guardians to protect their assets while allowing them access to social benefits programs. This particular trust has never been fully tested before as a valid estate planning tool.   In S.A. the program in question was a certain rental assistance program run by the Metro Vancouver Housing Corporation in cooperation with the BC government.  S.A. had become a beneficiary of a Henson Trust, after many years being a recipient of the rental assistance program.

The court ruled that a Henson Trust can in fact be a valid tool if the particular trust is properly set up to give full control of its assets and the dispersal of them to the trustee and no control to the beneficiary.  In addition the court ruled that for the Henson trust to be effective the terms of the specific social program and/or any contractual provisions would have to be examined to see whether those terms allowed for beneficiaries assets to be shielded by the use of a Henson Trust.

However if the programs terms did not disallow the use of a Henson trust and if the trust itself was properly created it could be effective and in S.A. was indeed held to protect the plaintiff’s assets and allow her to benefit from the social program.

If you are the beneficiary of, or would like to set up a Henson Trust, contact us online by phone at 1-800-563-6348 to speak directly with one of our lawyers.