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Understanding a Henson Trust in Manitoba for People with Disabilities

By Committeeship, Estates, Power of Attorney, Wills

Navigating the complexities of estate planning and ensuring financial security for loved ones with disabilities can be a daunting task. In Manitoba, one effective tool that people look at for its flexibility and protective benefits is the Henson Trust. This post aims to shed light on Henson Trusts, detailing their setup, operation, and associated risks to help Manitobans make informed decisions and help you consider if seeing a Winnipeg lawyer for the Henson Trust is the right way to help you plan.

What is a Henson Trust?

A Henson Trust, named after the landmark legal case that established its framework, is a unique type of trust designed to benefit individuals with disabilities (in this case, the “beneficiary”). It is a discretionary trust, meaning that the trustee has full control over if, when, and how the trust’s assets are distributed to the beneficiary. The primary goal of a Henson Trust is to provide financial support to a person with disabilities without affecting their eligibility for government assistance programs, such as the EIA or Manitoba Housing. This is because the assets held in a Henson Trust are not considered part of the beneficiary’s assets.

Setting Up a Henson Trust

Establishing a Henson Trust in Manitoba requires careful planning and adherence to specific legal requirements. The process typically begins with consulting a lawyer experienced in estate planning and trusts. The settlor, who is the person creating the trust, must draft a trust deed or will that explicitly states the trust’s discretionary nature. This document should appoint a trustee or trustees, outline the trust’s terms, and specify the beneficiary or beneficiaries. Choosing a reliable and trustworthy trustee is crucial, as they will have significant control over the trust’s administration and the welfare of the beneficiary.

Operating a Henson Trust

Once a Henson Trust is in effect, its operation hinges on the discretion of the trustee. The key part of a Henson Trust is that no one can require that the trustee pay any of the money to the beneficiary – that is how it avoids being included in the beneficiary’s assets. The trustee is responsible for managing the trust’s assets, making investment decisions, and deciding on the distribution of funds to the beneficiary. They must act in the best interest of the beneficiary, taking into account the beneficiary’s needs, government benefit eligibility, and the trust’s long-term sustainability. Trustees have the flexibility to disburse funds for a wide range of expenses, including living costs, medical care, education, and leisure activities, ensuring the beneficiary’s quality of life is maintained or enhanced.

Risks Associated with Henson Trusts

While Henson Trusts offer numerous benefits, they are not without risks. One significant risk is the possibility of the trustee choosing not to disburse any funds, especially if they are also the residual beneficiary of the trust. This scenario can occur if the trustee, motivated by self-interest, decides to preserve the trust’s assets for themselves rather than using them for the beneficiary’s needs. To guard against this risk, it is essential to choose a trustee who is trustworthy and has the beneficiary’s best interests at heart. Additionally, you can appoint more than one trustee or a professional trust company to ensure checks and balances are in place.

In conclusion, Henson Trusts offer a valuable estate planning tool for families wishing to provide for loved ones with disabilities, ensuring their financial security without compromising their access to government assistance. However, the success of a Henson Trust lies in its careful setup, the integrity and diligence of the trustee(s), and the ongoing management of its assets. By understanding the benefits and potential risks, Manitobans can make informed decisions that align with their estate planning goals, ensuring peace of mind and the well-being of their loved ones.

Henson Trust meeting

8 Considerations When Making a Will For Your Blended Family (Including Mutual Wills)

By Estates, Wills

Preparation for a secure future is a fundamental responsibility towards your loved ones. It might appear daunting, especially in the case of blended families, but understanding the process can significantly reduce the burden. Here are eight crucial considerations for creating a will for your blended family, highlighting the importance of mutual wills:

1. Children’s Inheritance

Equal distribution is the foundation of harmony. A will ensures a fair inheritance amongst all your children, irrespective of whether they are part of your current or previous relationships. What is “fair” though is as individual as you are. You’re going to need to discuss that with your spouse or partner. Make sure that your discussions include topics like how an inheritance might work with step-children, as well as what happens if a step-parent outlives a biological parent. This can be the one of the more challenging topics, but it’s among the most important.

2. Providing for Your Spouse

The financial well-being of your spouse is another critical aspect. A well-structured will takes their future needs into consideration, ensuring sustenance and comfort even in your absence. It will also need to consider what happens depending on who goes first.

3. Guardianship of Minors

If there are minor children in your care, determine who’d be best suited to assume guardianship. Although this may be a difficult discussion, it is essential for the welfare of your children. Remember that, if your minor child has another living parent, that other parent will likely have the exclusive right to care for the children. While that’s not always the case, it’s something to consider.

4. Personal Possessions

Family heirlooms, sentimental gifts, or any item of personal significance requires careful consideration. Be explicit in your will to alleviate any unnecessary distress or disputes later.

5. Setting Up Trusts

Trusts are an excellent way to safeguard your children’s future financial well-being without overwhelming them with a significant amount at once—particularly beneficial for minor children or those not yet prepared for financial responsibility.

6. Considering a Mutual Will

A mutual will, sometimes called contractual wills, is a binding agreement between two people, typically spouses, to carry forward mutual promises even after one partner passes. This agreement’s serious nature obligates the survivor to uphold and respect the departed’s wishes, providing additional security for your family. Courts will usually uphold this type of will, if drafted correctly, even if the surviving spouse changes their will after the death of the other spouse. It can be hard to think that this might be an issue, but wills are about piece of mind and serious consideration should be given to exploring this as a possible option.

7. Open Communication

Maintaining transparency with your family about your will’s contents is vital. It not only eliminates confusion but also prevents potential disputes in the future. These discussions will absolutely involve your spouse or partner, but in many families discussing these issues with the (adult) children can help give clarity not only to them, but to you too.

8. Professional Legal Advice

Professional guidance could prove invaluable during this process. Legal advisors ensure each aspect of your will is addressed appropriately, helping you draft a comprehensive document that accurately reflects your wishes.

Creating this legacy for your blended family—through a well-planned will—does not have to be a challenging process. Remember, professional help is just a call away. Reach out to us at any time; we’re here to support you every step of the way.

Choosing an Executor for Your Will: Top 5 Things to Consider

By Estates, Power of Attorney, Wills

Creating a will is a bit like planning a neighbourhood gathering — you’re figuring out who gets what (picture the potluck dishes) and ensuring things run smoothly. And just like you’ need a coordinator for the party, you need to pick an executor for your will.

Your executor is like the captain of your post-life team, steering your affairs in the direction you wish. So, let’s stroll together through the top 5 things to consider when choosing your own will executor.

1. Trustworthiness

Just like you wouldn’t hand your house keys to someone you don’t trust, you shouldn’t select an executor you don’t have faith in. After all, they’ll be taking care of distributing your assets according to your wishes. Make sure the person you select is known for their integrity and honesty.

2. Organizational Skills

Handling a will involves a lot of paperwork and deadlines. Your chosen executor should be someone who’s good with details, timelines, and, let’s face it, a bit of bureaucracy.

3. Communication Skills

You’d want someone who knows how to diplomatically deal with Uncle Bob arguing over your famous lemon pie recipe, right? Much in the same way, your executor should bravely and tactfully handle any family conflicts that might pop up.

4. Availability and Location

Consider choosing an executor who is relatively local to you. This is very much like choosing a neighbour to water your plants while you’re gone. Having someone close-by can make the process smoother and faster, since they’ll easily attend to necessary paperwork and meetings. If you’re considering someone who lives outside of Manitoba, talk to us about that – there may be considerations ranging from the practical to the expensive (from a tax standpoint) that we’ll want to talk about.

5. Professional Assistance

Lastly, know that your executor can hire professionals to help, like us, your friendly neighbourhood lawyers. Any fees for legal assistance come out of the estate, not your executor’s pocket.

 

Choosing an executor is a critical step in creating your will. It’s all about making sure someone you trust has got things under control, just like the trustworthy neighbour you’d leave a spare key with. Remember, at Wolseley Law, we’re here to help navigate these decisions with you. Come and chat with us about your options.

Crafting a Will in Manitoba: A Step-by-Step Walkthrough

By Estates, Power of Attorney, Wills

We get it, the thought of sitting down to craft a will isn’t exactly a walk in the park. But when it comes to safeguarding the future of your loved ones and your hard-earned assets, it’s absolutely worth it.

Allow us to guide you through the steps to creating a will in Manitoba – we promise, it’s less complicated than you think!

Step 1: Get Started (Don’t worry, we’re here with you!)

First things first, take a deep breath. Understand that you’re taking a crucial step towards ensuring security for your loved ones. Now grab a pen, some paper, and let’s gather a list mentioning all your assets (like your house, car, savings, investments) and personal items of real or sentimental value (items of jewellery, art, or even your well-cared-for houseplants!). We’ll send you an intake form to start thinking about these things, if you’d like.

Step 2: Choose the Beneficiaries

Next, think about who you want to pass these assets onto. These folks are known as your beneficiaries. They can be anyone you wish – your kids, other family members, friends, even a good cause that you feel deeply about.

Step 3: Name Your Executor

Now, choose a trusty person to carry out the terms of your will. This is your executor, (kind of like that reliable friend you’d nominate to water your plants while you’re away). This should ideally be someone you trust, who’s organized and impartial. See our hints on choosing an executor, here.

Step 4: Guardianship Decisions

If you have children under 18, it’s crucial to think about who you’d like to take on guardianship duties should something happen to you. If you have kids this is likely the main reason you’re making a will, so this decision needs careful thought and plenty of discussions with potential guardians.

Step 5: Create the Will

Ready to get going? Great! We’ll meet with you to take instructions from you regarding what you might want in your will. We’ll have lots of questions for you, but if you’ve done a little light prep work we won’t be asking anything that you won’t already know the answer to. It’s a conversation, not a quiz!

Step 6: Sign and Witness

In order for a will to be legally valid in Canada, it must be signed in the presence of two adult witnesses, who aren’t beneficiaries or the spouse of a beneficiary. Typically that’s two people from our office who are there to make sure that the witnessing complies with the law around wills.

Step 7: Keep it Safe

Lastly, we’ll send you home with your will. Find a safe and secure place to store your will where your executor can access it when needed. Make sure to tell your executor where you’ve kept it. This is often just a secure spot in your house.

And voila! You’ve successfully crafted a will. Remember, setting up a solid will is all about making things as easy as possible for your family and friends – let us help make that process a little easier for you.

Dealing with pets in your will and estate

By Estates, Pets, Power of Attorney, Wills

You love your pet, and you want to make sure that he or she is taken care of after you’re gone. You may not know how to do this, but don’t worry: It’s easier than you think! In this article, I’ll cover the basics of estate planning for pets and how it can help the dog, cat, iguana or whoever you have in your life continue to be a good boy even after you can’t help them anymore. Because who’s a good boy? Your pet’s a good boy.

Pets are part of the family, so they should be protected and provided for in your estate plan along with other loved ones and assets

Pets are part of the family, and they should be protected and provided for in your estate plan along with other loved ones and assets. Pets are not just property, they are family members. They have feelings and emotions that can suffer when they lose their owner or guardian. In some cases, these animals have been with an individual longer than any human friend! They deserve to be included in your will as well as being cared for by someone who will love them just as much as you did when alive (or even more).

Plan early.

It’s never too early to start thinking about what will happen to your pets after you pass away.

However, if you wait too long, it may be too late. You need to make sure that your wishes are known by those who will be responsible for carrying them out.

Consider hiring a lawyer to help you create an estate plan.

If you have pets, it is important to have a plan in place for them. A lawyer can help you create a will and make sure that the right people are named as executor(s), trustee(s), successor trustee(s), power of attorney and/or guardian(s). They also know how best to deal with pets in these documents.

A good estate planning lawyer will ask questions about your pet’s needs so they know what type of caretaker would be best suited for them; many lawyers have connections with local shelters that specialize in helping animals find new homes when their owners pass away or become unable to care for them anymore

Although courts see pets as property, choose a guardian for your pet.

Although the courts see pets as property, you should choose a guardian for your pet. A guardian can be a family member, friend or neighbor. Alternatively, it could be a professional caregiver who specializes in taking care of animals.

If possible, appoint two people as co-guardians so there’s someone who can step in if something happens to one person before the other dies or becomes incapacitated themselves (elderly parents often worry about this).

Provide for your pet in your will and other legal documents.

If you have a pet, it’s important to think about how they’ll be cared for after your death. If a family member or friend isn’t willing or able to take on the responsibility of caring for your pet, consider other options such as finding them a new home with someone who is able to do so. Another option is providing money in your will that allows them to be taken care of by an animal shelter or rescue group until they are adopted into their new home.

Pets can be the subject of gifts for their care, or even trusts that allow funds to be paid out every year that they survive you in order to ensure continual care. The options for choosing how to provide for your pets are nearly limitless.

Arrange for care while you’re alive, if possible.

If you have a pet and are experiencing a move into a personal care facility, it may be valuable to consider if an earlier move for your pet is a better option. This may help ease your pet’s transition into its new home, and still allow you to visit, or be visited by your pet, from time to time.

You should also make sure that any medical issues are taken care of before arranging for someone else to take over as caregiver: ensure that the animal has had all its vaccinations (and check back periodically), and bring it in for regular checkups from time-to-time so that any potential problems can be caught early on and treated accordingly by a veterinarian.

Conclusion

Pets are a big part of our lives, and they deserve to be taken care of. They’re also part of your estate and will, so it’s important to plan properly for them. If you don’t want to leave money or property directly to your pet, consider naming someone else as guardian who can take care of them in the event of your death or incapacity. This person should be someone who loves and cares about your good pup or kitten or other friend as much as you do and who is willing to give them all the love that they deserve.

Planning considerations as you get older

By Committeeship, Estates, Power of Attorney, Wills

Estate Planning

If you have a family, it’s important to make sure that they are taken care of after your death. A will is one way to do this. A will allows you to specify who will inherit your property and other assets, including who should care for any minor children if both parents die.
You may also want to consider setting up a trust as part of your estate planning process. Trusts can be used in many different ways–for example, they can be set up so that an heir receives money from the trust only when he or she reaches a certain age (a “spendthrift” clause), which could help protect against financial abuse by others; or they might allow for some flexibility over how much money goes into each beneficiary’s hands at different stages in life (such as college tuition).
If someone else needs power over your finances but doesn’t want total control over them (for example, if you’re too ill or incapacitated), then naming him or her as power-of-attorney may be necessary; this person would then be able to make decisions about paying bills on behalf of another person until such time as he/she recovers enough mental capacity again. You can read more about that here: https://wolseleylaw.ca/wills-estates-and-elder-law/

Health Care Planning

Health care planning is one of the most important things you can do to ensure that your wishes are respected and carried out. By creating a health care directive and assigning a health care proxy, you can ensure that decisions about your medical care are made according to your wishes. If you have chosen not to create an advance directive or assign a proxy, then provincial law will determine what happens if you become incapacitated and unable to make those decisions yourself.
When it comes time for long-term care (LTC), there are several options available: home-based LTC services such as adult daycare centers; assisted living facilities; nursing homes; or continuing care retirement communities (CCRCs). Each option has its own benefits and drawbacks depending on how much assistance is needed from staff members at these facilities–and each comes with its own cost structure as well!

Financial Planning

As you age, it’s important to have a financial plan in place. This can include creating a budget and planning for retirement, as well as exploring financial assistance options that may be available.

Housing Arrangements

  • Senior Living
    If you’re an older adult, or if you know someone who is, it’s important to explore options for senior living. This can include independent living facilities or assisted living facilities. You may also want to consider moving in with family members or friends who live nearby.
  • Home Modifications
    As people age, they often need help with daily tasks such as bathing and dressing themselves. When this becomes too much for them alone–or when it becomes impossible for them alone–it’s time to make some changes in their home environment so that they can continue living safely on their own terms without needing constant assistance from others around them all day long every day throughout each week. Some examples include installing grab bars near toilets; widening doorways so they’re easier for wheelchair users; adding ramps outside entrances where snow piles up during winter months

Insurance Planning

  • Long-term care insurance
    Long-term care insurance can be a good option for people who are concerned about the cost of nursing home care. It’s important to evaluate your options carefully, though, and make sure that you understand what kinds of benefits each plan provides before buying one.
  • Health insurance options
    If you have employer-sponsored health insurance, it’s important to evaluate whether or not this coverage will continue after retirement. Long term drug coverage will typically end after retirement and so it may be important to consider what that coverage may look like, and what government Pharmacare limits and deductibles might be for you.

Tax Planning

Tax Planning
A tax professional can help you plan for retirement and ensure that you are taking advantage of all the deductions and credits available to you. Tax planning is also important for ensuring that your estate is properly structured to minimize taxes on death, which may include setting up trusts or other legal arrangements ahead of time.

End-of-Life Planning

When you’re faced with end-of-life planning, you may be thinking about what arrangements to make for your funeral and burial. You may also want to consider how much time you have left and what kind of care you would like in the event that your health deteriorates.
You can help ensure that these decisions are carried out in accordance with your wishes by creating an end-of-life plan. This includes deciding on funeral arrangements, such as whether or not there will be a public viewing or open casket service; who should attend; where it will take place; what music is played during services; whether or not there should be flowers sent by family members; etc.; creating a living will (also known as an advance directive) which outlines how medical treatment should proceed if one becomes incapacitated due to illness or injury. Even MAID is becoming more complex, with new rules set to take effect soon. Talking through those options can be important as well.

Caregiver Arrangements

If you’re caring for an elderly loved one, you may need to hire a caregiver. You can also look into finding support services in your area and making arrangements for respite care.
If you are caring for someone who has dementia or Alzheimer’s disease, it’s important to know what legal arrangements should be made before they lose their ability to make decisions on their own behalf.

Technology Planning

  • Assistive technologies: Assistive technology is any device or service that helps people with disabilities to do things they cannot do on their own. Examples include screen readers for people who are blind, text-to-speech software that converts written words into audio speech, and devices that allow people with mobility issues to use computers more easily.
  • Online resources: The Internet has become an indispensable tool for many older adults and their caregivers. It can help them find information about legal matters, health care services and other community resources; connect with others who share similar interests; stay in touch with family members who live far away; participate in online discussions about topics important to them (such as aging); learn new skills like using social media platforms like Facebook or Twitter; order groceries from home delivery services like Instacart or Peapod; manage finances using online banking tools such as Mint (which also tracks spending habits); find transportation options such as Uber/Lyft ridesharing services–and much more!

Conculsion

There are a number of considerations when we think about getting older and many of them go hand-in-hand. For example you tax planning and estate planning will often overlap. If you have questions about these, or if you know that there is some planning that you’d like to do, please reach out and schedule a chat with us.

Dealing with your cottage in your will and estate

By Estates, Wills

Cottages are an important part of many families. They’re a place filled with happy memories and have been an annual gathering place for those closest to you. But when it comes time to pass on your cottage, family members may have different ideas about what should happen next and how the cottage should be handled in your will. People often come to us with questions like:

 

  • How do you pass a cottage on to the next generation?
  • Is a cottage trust a good idea?
  • How do we deal with conflicting ideas about what happens to the cottage?

 

Let’s take a look at some of those questions so that you can start the conversation with your family

 

Avoiding family conflict with cottages

Family cottages can cause family conflict if they aren’t handled properly in your will. There are a number of ways that this can happen, but the most common is when one child really wants to keep the cottage but others may not be able or interested in doing so. On the opposite ends of the spectrum is when everyone wants the cottage but on different terms. If you would like to avoid any potential family conflicts arising from your cottage when you pass away, here are some tips:

  • Consider holding a family meeting to discuss what everyone hopes will happen. It may lead to a discussion where everyone can be accommodated, or will at least allow you to identify where points of disagreement might be.
  • Make sure each child knows what was agreed upon by all members of the family before making a decision about how the property will be dealt with after your death.
  • Think about appointing someone else (a trustee) instead of leaving it directly to one person who may have different ideas about what should happen with the property than all other siblings living nearby. We’ll discuss this below.

 

What about cottage trusts?

A trust can be created for the benefit of a specific person or group of people, or for the benefit of a specific purpose. In a cottage trust, the cottage is transferred under your will (or beforehand) to someone who will act as the “trustee” of the cottage. That person, who can be an adult child, another family member, or someone trusted but unrelated, will be the technical owner but they will be holding it for the benefit of others, often family members of the person who has passed away. Cottage trusts are often used to ensure that the cottage isn’t controlled by any one family member and also allows a mechanism to leave funds to ensure that the cottage is looked after for a period of time. It can also be used to temporarily hold a cottage until your children are over a certain age and able to manage the responsibility of a cottage.

 

Trusts aren’t right for everyone

Trusts can be complicated and there are a number of factors to consider when thinking about setting one up. The tax consequences are a major consideration and everyone thinking about a cottage trust should talk to their accountant before they get too far into the process. Trusts are also a more expensive solution to set up than leaving a cottage to someone in your will outright and involve significant planning and discussion.

 

Beyond that, though, a cottage trust doesn’t solve all of the conflict problems that people are concerned about, it only delays them. Trusts have a practical time limit to them in Manitoba and in some other provinces (including Ontario) can have a firm legal time limit to how long they can exist for. This means that when the time limit is up, or some other conditions expire, something will eventually need to be done with the cottage anyway and it will need to be given to someone or sold.

 

Passing on the cottage doesn’t mean that all your heirs need to be co-owners.

The most common way of dealing with a cottage isn’t a cottage trust, but to leave it outright in a will. You can leave the cottage to one person or more than one person, or maybe even have some other options, depending on your wishes.

  • To one heir: If your cottage is going to be passed down to a single heir, then you’ll need to appoint that person as the beneficiary of the cottage in your will.
  • To multiple heirs: You can name more than one individual as a beneficiary of the cottage, with each share being equal or even unequal. It would be important that everyone involved has a very good idea of what that shared ownership looks like, especially between adult children, to make sure that everyone understands what the intention and responsibilities are with that kind of shared ownership.
  • To charity: You can also choose to give the property to a charity. This means that your family will no longer have use of the cottage but may confer a significant tax benefit. You should definitely seek professional financial advice before considering this.

 

Talking with family

Whatever you do, talk to your family about it beforehand and make sure the know the plan so there are no surprises later. They don’t have to like or agree with the plan, but discussions that happen while concerns can still be addressed are significantly better than trying to have a discussion afterwards. If your child loves the cottage, but has never been particularly interested in maintaining it, for example, she might not be thrilled about inheriting a fixer-upper. So how does one avoid these kinds of misunderstandings?

 

  • Start early: It’s a good idea to have this conversation well before you pass away (it’s awfully hard to do so afterwards). While everyone needs time to adjust and process what’s happening when someone dies, talking about who inherits assets while there is still plenty of time can help minimize any confusion down the road. Set a dinner to discuss estate plans, including the cottage. Give everyone some time beforehand to develop their thoughts about a potential plan and what they want. You may be surprised at how much common ground there is around wishes and concerns.
  • Be honest: The best way to set people up for success after you’re gone is by being open and honest with each other now—not only about who gets what, but also why each person should get something at all! For example: “I’m leaving my cottage to my daughter because I know she’ll love it as much as I did,” or “I’m leaving my cottage to my son because he has always been such an integral part of our family.”
  • Seek assistance: A lawyer experienced with cottage challenges can provide answers through the conversation process. Often times an excellent solution can be crafted, so long as you do it within the bounds of what is allowed, and with some guidance on potential pitfalls with a plan. For more contentious families, even a family therapist or mediator who can facilitate discussions may be very helpful in keeping everyone focused and working towards a common goal.

 

In the end…

There are many options when it comes to dealing with your cottage in your estate and it’s important to find a solution that works for you and your family, and not just what seems easiest. It all depends on what your family wants, how much time they want to spend together, and how much they trust each other. The best thing to do is figure out what works best for you and then talk about it with your family so that everyone knows what’s going on.

 

This article is for information purposes only and is not legal advice. You should definitely seek your own counsel about plans that you may be considering. This article is written with Manitoba in mind and may not be applicable in other provinces or countries. Some of the information in this article may not apply to your situation at all so please do not make any plans or decisions based on it exclusively.

 

Gerrit Theule is a partner at Wolseley Law LLP and his primary practice area is in Wills, Estates, Trusts, and Elder law.