As a lawyer and a parent of vulnerable adults, I have first-hand knowledge of the barriers families face and the complexity of estate and incapacity planning. Proper estate planning is key to protecting the needs, autonomy, and long-term security of a loved one with a disability.
Protecting Disability Benefits in British Columbia
Proper estate planning in British Columbia is crucial, as improper planning can jeopardize a person with disabilities’ much-needed provincial Persons with Disabilities (“PWD”) benefits. Many people rely on this assistance for housing, medical, and living expenses. If a gift in a will is not structured properly, these benefits may be reduced by the amount of the gift, turning a well-intentioned inheritance into a financial and emotional burden.
Proper estate planning allows you to support a loved one without jeopardizing their eligibility for provincial assistance. Tools like a discretionary trust, commonly known as a Henson Trust can be used to hold and manage funds on the person’s behalf. This gives trustees the flexibility to enhance the person’s quality of life while safeguarding their eligibility for government programs. Trusts also protect a vulnerable person from mismanagement and financial abuse by others.
In recent court decisions, courts have been unwilling to vary a will to create a Henson Trust jeopardizing the disabled person. To avoid similar outcomes, we recommend updating wills to include discretionary trusts, naming alternate trustees, and coordinating life insurance and RRSP designations.
Incapacity Planning for Vulnerable Adults
In British Columbia, adults aged 19 or older are legally presumed capable of making their own personal, legal, and financial decisions. When an adult is incapable of managing their affairs, a court-ordered Committeeship under the Patient’s Property Act may be necessary. This process appoints a decision-maker, known as a Committee, to manage the adult’s affairs. A Committee of Personis responsible for personal and healthcare decisions, such as where the adult lives and what medical care they receive. A Committee of Estate manages all financial and legal matters, including assets, investments, and paying bills. This appointment grants the Committee comprehensive authority and the duty to act in the best interests of the adult, effectively assuming full decision-making responsibility on their behalf.
Planning ahead allows you to choose who will act on your behalf and define the scope of their authority. Improper planning or a lack of planning can result in delays, family conflict, or the loss of control over important life decisions.
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