Discretionary trust for child with mental health issues.

Preparing for life after work. RRSPs, RRIFs, TFSAs, annuities and meeting future financial and psychological needs.
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Thegipper
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Discretionary trust for child with mental health issues.

Post by Thegipper »

Have been thinking of setting up a trust to help an adult child with Asperger syndrome. The amount of the capital would be about 350k. I understand that the 2016 budget makes this type of trust much more difficult. As the child is 45 there are questions about finding a competent trustee at a reasonable cost who will be around as long as the child. Another question is what happens to the trust when the child dies. I can see a trust allocation that create a couch potatoes allocation of investments. Before consulting a lawyer on this topic I would appreciate your wisdom and thoughts.
brucecohen
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Re: Discretionary trust for child with mental health issues.

Post by brucecohen »

If the child qualifies for the disability tax credit you can set up a qualified disability trust. QDT income is still taxed at graduated rates instead of the top rate which would otherwise apply. You'd also want to have the trust structured as a Henson trust so that income distributions are excluded from the income test for provincial govt benefits.
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