At my law office in the Kanata-Stittsville area of Ottawa, some of the individuals that I meet are acting as the trustee of a Henson trust. If I were asked what are the top three tips you share with trustees to make the job go as smoothly as possible, here are my answers:
1. Get the advice you need.
The role of trustee is one that is unfamiliar to most people. If you’ve accepted this job, you need to be aware of the duties of a trustee and as a trustee, you are a fiduciary with legal and ethical responsibilities.
As trustee of a Henson trust, your overriding obligation is to manage the trust assets for the trust beneficiary. You must ensure that the assets are managed prudently, that any investments made comply with the requirements of the Will or trust document and also comply with applicable laws. To help you fulfill these duties, you will want to work closely with a knowledgeable financial advisor and a tax accountant, both of whom should be familiar with trusts. The accountant’s and advisor’s fees are usually payable from the trust.
2. Keep good records.
Up-to-date, detailed records tracking all transactions of the trust are essential. This includes receipts, disbursements, investments, etc. These records (called ‘the trust accounts’) must be supported by receipts, bank statements, investment statements and so on. You should also keep copies of any correspondence relating to the trust and a journal of all time spent carrying your trustee duties.
These records may have to be provided to an appropriate authority on request. For example, the Canada Revenue Agency (CRA) has the right to audit the accounts of a trustee. An audit is disruptive at the best of times but is even more so if the accounts and supporting records which must be provided are incomplete or inaccurate. It can be difficult or impossible to provide information that dates back a year or two if proper records were not regularly maintained.
3. Be familiar with ODSP’s rules.
In most circumstances, it is important that the trustee of a Henson trust ensure that the trust beneficiary’s eligibility for Ontario Disability Support Plan (‘ODSP’) benefits is not at risk. If the beneficiary loses his or her ODSP entitlement and the associated benefits, there is no guarantee of future reinstatement into the program. Applying for reinstatement can be a difficult and time-consuming process.
To understand the income and assets that an individual with a disability is allowed, the trustee should regularly review the ODSP rules and regulations or seek assistance from an advisor familiar with the rules and regulations. It is also essential that the trustee of a Henson trust be aware of both the ODSP rules regarding income limits and the income that the beneficiary receives from other sources so that benefits can be maximized.
If you are acting as the trustee of a Henson trust, email firstname.lastname@example.org or call 613.836.9915 to make an appointment to meet with me at my Ottawa law office. We will review your duties and responsibilities as a trustee and all the information you need to make the job of trustee go as smoothly as possible.
Reproduction of this blog is permitted if the author is credited. If you have questions or if you would like more information, please call us at 613 836-9915. This blog is not intended to be legal advice but contains general information. Please consult a lawyer or other professional to determine how the information in this blog might apply to you.
Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.