Planning a Trust That Had to Outlast Its Trustees

The situation

Dawit drove transit routes for the city; Meron kept the books for a handful of small local businesses. Between them they had built a modest but solid financial life — a paid-down house, some retirement savings, a life insurance policy each carried through work, and no debt to speak of. Their estate, if both of them died at the same time, would be worth roughly $300,000 to $450,000 once the house and savings were added together.

They had two children, but it was their younger daughter, Hodan, who brought them to our team. Hodan lived with a developmental disability and received a modest monthly payment through the Ontario Disability Support Program (ODSP), a provincial benefit for people with disabilities who meet income and asset limits. The payment was not large, but it was steady, and it came bundled with drug and dental coverage that Hodan relied on. Dawit and Meron had put off writing wills for years, the way many parents do, but Hodan's twenty-first birthday had pushed the question to the front of their minds: what happens to her if something happens to us?

Their instinct — like most parents' — was to leave their estate equally between their two children. It was the fair thing, the natural thing. What they had not realized was that doing it that way could cost Hodan her benefits.

The problem

ODSP is a means-tested benefit. To qualify, a recipient's assets have to stay under a set limit, and that limit is low — low enough that a direct inheritance of even a modest sum can push a recipient over it. If Hodan received her share of her parents' estate outright, as a lump sum in her own name, she would very likely lose her monthly support and her health benefits until she had spent the inheritance back down below the asset limit. For a family whose whole plan was to give their daughter more security, that outcome would have done the opposite.

This is a mistake we see often, and it is an entirely understandable one. Parents write a will that treats their children equally on paper, without realizing that for a child receiving disability support, an equal inheritance can be a poisoned gift. The fix is not to leave Hodan less — it is to leave it to her differently.

The tool for this is called a Henson trust, named for a decision that established the approach in Ontario: a trust where the trustees have absolute, unfettered discretion over whether, when, and how much to pay the beneficiary. Because Hodan would have no enforceable right to demand money from the trust — only the trustees could decide to make a payment — the trust's assets would not count as Hodan's own for ODSP's asset test. The money could sit there for her benefit, used for things like furniture, travel, dental work ODSP didn't cover, or an occasional treat, without ever touching her eligibility.

But getting the trust structure right was only half the problem. The harder question, once Dawit and Meron understood the discretionary trust itself, was who would run it — not for five years, but potentially for fifty. Hodan was twenty-one. Actuarially, this trust might need to function long after Dawit and Meron themselves were gone, long after any single trustee they named today could reasonably be expected to still be living, capable, and willing to serve.

What we did

1. Drafted a fully discretionary trust inside their wills. Rather than leaving Hodan's share to her outright, both of their wills directed her portion — roughly the same value as her sibling's share — into a trust for her benefit. The drafting gave the trustees complete discretion over payments, with no minimum, no fixed schedule and no right for Hodan to compel a distribution, which is the feature that keeps the trust's assets outside ODSP's asset test.
2. Built in three layers of trustees, not one. Naming a single trustee — even a capable, willing one — is a common gap in these plans, because that person can predecease the beneficiary, become incapable, or simply be unable to continue after decades of service. We structured a succession: Dawit and Meron named each other first, then a trusted family friend as second-line trustee, and finally a licensed trust company as a standing fallback if no individual trustee remained able to serve. That third layer meant the trust could never be left without someone legally responsible for it, even sixty years from now.
3. Paired the trust with a letter of wishes. A letter of wishes is not legally binding on the trustees, but it gives them guidance the will itself cannot — in this case, notes from Dawit and Meron about Hodan's routines, what kinds of purchases would genuinely improve her life, and how they hoped the trustees would balance spending now against preserving the trust for later years. It gave whoever ended up serving as trustee, including the trust company decades on, a sense of the family's intentions beyond the bare legal document.
4. Redirected their beneficiary designations to match the trust. Both of their life insurance policies and one of their retirement accounts had named their children directly as beneficiaries — a common setup that would have paid a lump sum straight to Hodan, bypassing the trust entirely and undoing all of the planning in the wills. We updated those designations so Hodan's portion would flow into the trust rather than to her directly, and flagged the same issue for Meron's workplace retirement plan, which had a separate designation form to update through her employer.
5. Confirmed the plan against ODSP's rules for trust income. Fully discretionary trusts protect the asset test, but ODSP also treats certain trust payments to or for the beneficiary as income, which can affect the monthly amount if payments aren't structured carefully. We walked the trustees through the categories of payment — direct disbursements versus payments made to third parties for Hodan's benefit — so future distributions could be timed and structured to minimize any effect on her ongoing support.

The outcome

Dawit and Meron signed new wills with the discretionary trust built in, updated every beneficiary designation that could have undermined it, and left a letter of wishes for whoever eventually stepped into the trustee role. Hodan's ODSP support and health coverage were never at risk from the plan itself — the whole point was to keep those benefits intact while still giving her family's estate a way to improve her life over time.

The plan also gave Dawit and Meron something less tangible but just as important: the confidence that Hodan's inheritance would not become a bureaucratic trap sprung after they were no longer around to fix it. The trustee succession meant they were not betting the entire arrangement on any one person's lifespan or availability. And because the structure was set out clearly in their wills rather than left to be improvised later, there would be no scramble to reconstruct their intentions if a trustee had questions decades from now.

Estate plans built around a family member with a disability are rarely something to set once and forget. Support programs change their rules over time, family circumstances shift, and the people named as trustees today will not all still be available in thirty or forty years. We recommended Dawit and Meron revisit the plan roughly every few years, or sooner if Hodan's needs, ODSP's program rules, or their own family circumstances changed in a way that mattered.

What you can learn from this