Another issue that I have recently experienced is estate planning for families who have people with disabilities. I have done some research and came across a very informative article. Here is a link to Special Needs Planning. The beginning of the article covers various ways of creating a will. What I found most informative was the various benefits and drawbacks of the types of giving available.
http://www.specialneedsplanning.ca/tools.html
The Inheritance Trust
This type of trust allows Ontario residents who receive ODSP (Ontario Disability Support Program) to inherit up to $100 000.00 without impacting their ODSP eligibility. The biggest issue to consider with this type of trust is that if the trust accrues interest or grows in value to over $100 000.00, then the ODSP payments are reduced dollar for dollar by that amount. One issue which could be considered a benefit depending on the individual's situation is that the beneficiary can only withdraw $6000 in a 12 month period, unless it is used for purposes related to the disability. If the beneficiary withdraws more, their benefits are reduced dollar for dollar.The Registered Disability Savings Plan (RDSP)
This savings plan provides an option for estate planning that doesn't require a trust or a trustee. This also allows for accessing significant government money. Contributions max out at $200 000.00 and it is after tax money which is contributed, therefor that money isn't taxed upon withdrawal. The government money which is contributed and the growth or interest is taxed upon withdrawal. The beneficiary can access the funds in the RDSP so long as the amount withdrawn is over and above the amount that the government has contributed.In future posts I will go into more detail about the RDSP, for now here is a link with more information.
http://rdsp.com
