How to Set Up a Henson Trust in Ontario: Cost and Process

If you have a family member who receives means-tested disability benefits, you have likely run into a difficult tension: you want to leave them an inheritance, but a lump sum paid directly to them could put those benefits at risk. A Henson trust is the tool Ontario families most commonly use to solve this problem — a fully discretionary trust that lets you provide for someone without giving them a fixed, vested entitlement the trustee is obligated to pay out.

Here is what actually goes into setting one up, and what tends to drive the cost.

What Makes a Henson Trust Different

A Henson trust gives the trustee complete discretion over whether, when, and how much to pay the beneficiary — the beneficiary has no automatic right to demand a distribution. Because the beneficiary's interest is not vested, the trust's assets are generally not counted as the beneficiary's own property for the purposes of government programs that apply asset and income limits, such as the Ontario Disability Support Program. Those program rules, including the specific dollar limits that apply, change from time to time — confirm the current limits directly with the program or with a lawyer before relying on any particular number.

The General Process, Step by Step

1. Confirm a Henson trust is the right fit. Not every family member receiving disability-related support needs this specific structure — a lawyer can confirm whether it matches your family's situation and the benefit programs actually involved.
2. Decide whether it will be created now (inter vivos) or through your will (testamentary). Many families set up a Henson trust to take effect on their death, built into their will; others create one during their lifetime, often to receive a specific gift or settlement.
3. Choose your trustee (or trustees). Because the trust is meant to run for the beneficiary's lifetime, this is one of the most important decisions in the process — see our related article on choosing a Henson trust trustee for what to weigh.
4. Decide what happens to the assets when the beneficiary no longer needs the trust. Most Henson trusts name contingent beneficiaries — often siblings, other family members, or a charity — to receive whatever remains after the primary beneficiary's needs are met or after they pass away.
5. Have the trust document drafted. The document needs to make the trustee's discretion genuinely absolute — this is a precise drafting exercise, and generic templates or informal language can undermine the very protection the trust is meant to provide.
6. Sign and fund the trust properly. A testamentary Henson trust is funded when your estate is administered after death; an inter vivos trust needs to be properly funded and administered from the outset, with its own bank account and its own tax filings going forward.
7. Tell the people who need to know. Your executor, your other beneficiaries, and ideally the trustee themselves should understand the trust exists and how it is meant to work, to avoid confusion or conflict later.

What You'll Generally Need to Bring to Your Lawyer

• [ ] Details of the family member the trust is meant to benefit, and the government benefits or programs relevant to their situation
• [ ] Your thoughts on who should act as trustee, and any alternates
• [ ] A sense of how you want the trust's assets used — broad discretion, or with some guidance to the trustee about your wishes
• [ ] Who should receive any assets remaining after the primary beneficiary's needs are met
• [ ] Whether the trust will be created now or through your will
• [ ] Any existing will or estate plan the trust needs to fit alongside

What Drives the Cost

There is no single, fixed dollar figure for setting up a Henson trust in Ontario — the cost depends on factors including:

• Whether the trust is created as part of a new will or added to an existing estate plan
• How much customization the trust's terms genuinely need
• Whether the trust is being funded immediately or only on death
• How many contingent beneficiaries and scenarios the document needs to address

A lawyer working on flat, transparent fees should be able to quote you a clear total for your specific situation before any work begins, rather than billing by the hour with an open-ended estimate.

Frequently asked questions