What is a Henson trust and how does it protect a beneficiary with a disability in Ontario?

A Henson trust is a type of discretionary trust designed to hold assets for a person with a disability without affecting their eligibility for Ontario Disability Support Program (ODSP) benefits. The defining feature is that the trustee has full discretion over whether and how to distribute funds — the beneficiary has no legal right to demand any particular payment.

Because the beneficiary cannot compel a distribution, ODSP generally does not count the trust assets as the beneficiary's own resources. This preserves ODSP eligibility, which provides income support, drug coverage, and other benefits that a lump-sum inheritance could otherwise disqualify a person from receiving.

The trust is named after an Ontario court case that confirmed this structure's validity. To work as intended, the trust must be genuinely discretionary — the trustee cannot be bound by instructions that guarantee the beneficiary certain amounts. The trust terms should also specify what the funds can be used for: supplementing ODSP rather than replacing it, covering extras like recreation, travel, or equipment.

If you have a family member with a disability, a Henson trust in your will can be one of the most important planning steps you take. A lawyer experienced in disability and estate planning should draft it to ensure it meets current ODSP rules.