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AISH Program Policy

Published Date: April 01, 2018
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Assets

Trusts

AUTHORITY

Assured Income for the Severely Handicapped Act, section 3.1(a)
Assured Income for the Severely Handicapped General Regulation, section 3; Schedule 2

INTENT

To define trusts and how the AISH program classifies them.

Trusts

A trust is an estate planning tool used to provide for the ongoing care and financial supports of a person.  A trust is a legal arrangement in which the person setting up a trust (the “settlor”) gives money or property to a second person (the “trustee”) to hold for the benefit of a third person (the “beneficiary”).  In most cases the settlor, trustee and beneficiary are different people.  However, in some circumstances a beneficiary may set up their own trust.  A trust can have one beneficiary or multiple beneficiaries. The legal relationship is often described in a will or other written agreement. 

There are two types of trusts: discretionary, often referred to as a Henson trust, and non-discretionary.

  • A discretionary trust provides the trustee with the absolute discretion to distribute income and capital from the trust to the beneficiary. 
  • For a non-discretionary trust, the trustee has limited control on the distribution of income and capital from the trust to the beneficiary. Typically, the trust documents specify the amounts and frequency that income and capital must be paid out to the beneficiary.


Setting Up a Trust

AISH staff cannot advise applicants and clients how to set up a trust.  Albertans are advised to seek professional advice with lawyers and/or financial planners with expertise in establishing trusts.  It is important to make financial plans that meet each person’s or families’ unique situation.  At a minimum, however, trust documents should:

  • state the property (e.g. cash, investments) being placed into the trust;
  • identify who the trustee is;
  • identify who the beneficiary is;
  • provide direction on whether the trustee has absolute discretion in distributing income and capital from the trust to the beneficiary. If the trustee does not have absolute discretion, then the trust documents should identify the amount and frequency of payments to be made to the beneficiary.


POLICY

The value of any assets (e.g. cash, investments, property, etc.) that are held in trust in which an applicant, client or cohabiting partner is named as a beneficiary, is not included in a determination of assets.  This means that being a beneficiary of a trust will not impact eligibility for AISH, the child benefit or personal benefits.  However, income received from a trust may impact the amount of the living allowance received. For this reason, applicants, clients and their cohabiting partner are required to submit all trust documents to the AISH program for review.

Note
In cases where the Office of the Public Guardian and Trustee (OPGT) has been appointed as a trustee by court order and is holding funds of an applicant, client or cohabiting partner, those funds are not considered a trust as defined above.  This means that money held in trust by the OPGT is considered a non-exempt asset and may impact eligibility for AISH, the child benefit and personal benefits.