Disability Expense Trust

A "Disability Expense Trust" can be created by the person with the disability to receive proceeds from insurance or an inheritance. The Trust can hold up to $100,000 in funds without jeopardizing eligibility for ODSP. Payments out of the Trust to your dependant are considered exempt income if they are used for disability related expenses; payments for other needs are limited by the ODSP income rules.

While the set up of a "Disability Expense Trust" has its strategic advantages, at Transitions Wealth Strategies we only recommend this path in specific circumstances. There are disadvantages of setting up this type of inter-vivos Trust (Living Trust) namely the cost, trust management and tax implications. More often we will recommend the use of a Henson Trust. As well, Segregated Funds, insurance policy cash value and insurance company TFSA’s and RDSP’s all provide more easily managed means to accumulate the $100,000 in exempt ODSP assets to achieve the same end.

At Transitions Wealth Strategies, we will guide you as to the mix of funding programs that best meet the goals of your "Transitions Life Plan".

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