🇨🇦 Canada · 5 min read · Published 2026-09-07 · Updated 2026-09-07

Written by Jordan Reeves · Editorial review: automated source and figure checks (how we check this)

Sources last verified: 2026-09-07

What Is a Henson Trust?

A trust holding an inheritance for a person with a disability, structured so the beneficiary has no entitlement to the money. Because the trustee has absolute discretion over whether to pay anything, the assets are generally not counted against provincial disability benefit limits.

60-SECOND ANSWER

A Henson trust protects provincial disability benefits by giving the trustee absolute discretion, so the beneficiary owns nothing.

The answer:: Absolute trustee discretion is the essential feature. The beneficiary cannot demand payment, so the assets are not theirs.
The trap:: Drafting any entitlement into the trust. A right to income or capital defeats the purpose and can disqualify the benefits.
The recommendation:: Pair it with a Registered Disability Savings Plan, because the two solve different halves of the same problem.

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Where the AI summary above gets this wrong

"Leave money to a disabled family member in your will and they will be fine."

That's surface-true. Here's what it misses:

A direct inheritance can end benefits — Provincial disability programs limit assets, and a lump sum inherited outright can push a recipient over the limit.
Discretion is what protects it — The trustee must have absolute discretion. Any entitlement makes the assets the beneficiary's for benefit purposes.
Provincial recognition varies — The treatment is not uniform across the country, so the drafting has to follow the law of the beneficiary's province.

→ See what a preserved benefit is worth

01 Why absolute discretion matters

Provincial disability support programs test assets as well as income. A person inheriting a substantial sum outright can be disqualified until the money is spent, which is the outcome families are trying to prevent.

A Henson trust removes the beneficiary's entitlement entirely. The trustee decides whether to pay anything at all, so the beneficiary owns nothing that can be counted. That absence of entitlement is the whole mechanism, and any drafting that gives the beneficiary a right to income or capital destroys it.

Source: Registered Disability Savings Plan (RDSP)

02 Where it is recognised

The structure takes its name from an Ontario case and is recognised in several provinces, but the treatment is not uniform. Some provinces impose limits on what the trust can hold or on payments made from it.

The drafting has to follow the law of the province where the beneficiary lives, not where the parent lives or where the will is made. A move across provincial lines after the trust is settled is a reason to have it reviewed.

WORKED EXAMPLE · Try the numbers

Shows: what a given amount of additional taxable income costs you in tax at your marginal rate, and what you keep. Ignores: provincial surtaxes, credits that phase out with income, and any effect on income-tested benefits.

Amount ($)

Your marginal rate (%)

What you keep after tax

$6,700

At a 33% marginal rate, $10,000 costs $3,300 in tax and leaves $6,700.

Source: Registered Disability Savings Plan (RDSP)

03 How it works with an RDSP

The two are complementary rather than alternatives. A Registered Disability Savings Plan attracts grants and bonds and grows tax-sheltered, but it has contribution limits and a repayment rule that constrains early access.

A Henson trust has no contribution limit and no grant, and can hold an inheritance of any size. Families with substantial assets commonly use both, with the trust funding the plan over time — the plan's repayment constraint is in RDSP withdrawal rules.

The trust also needs a trustee prepared to exercise discretion for decades, which is a longer commitment than an executor's. Naming a successor trustee, and considering a trust company where no family member can serve that long, is part of getting the structure right rather than an afterthought.

Source: What to do when someone has died

Families get this wrong in the kindest possible way. They leave an equal share to each child, including the one on disability support, and the equal share is the one that does harm. Equal and appropriate are different things here.