“What will happen to my child after I am gone?”
This has to be one of the biggest questions parents of children with special needs have. When you have an adult son or daughter who is not able to live a fully independent life, figuring out the answers to this very important question takes time, effort and the involvement of a whole host of people. Determining who will help care for a son or daughter after the parents are gone is crucial.
In many cases, parents’ estate plans will include a Henson Trust to protect their child’s government benefits, such as income support from the Ontario Disability Support Program. Henson Trusts can play a key function, providing additional financial support to maintain a reasonable standard of living. But a Henson trust needs to be managed by trustees
The role of a trustee carries considerable responsibilities, especially when the beneficiary of the trust has significant needs. Discussing those responsibilities with the trustees is key. It seems obvious, but it is a step that is not always given the consideration and effort it requires.
The discussion with trustees should actually be an on-going dialogue that goes beyond your general wish that they take care of your son or daughter. Open and maintain a dialogue not only about what you expect of the trustees, but also about how these responsibilities should be carried out. Yes, you want them to manage the assets in the trust and use the financial resources for the benefit of your daughter, but how? What type of assets will be held in the trust? Where should the assets be held? How should they be invested? How should they be used? What should they not be used for? Who is managing them now?
I ask clients to introduce me to their selected trustees. Ideally, I like to have a meeting with the clients and the trustees. A meeting gives us the opportunity to explain where the funds for the trust will be coming from (e.g. sale of real estate, investments, life insurance) and how they should be managed. It also gives us a chance to discuss what their role will be, what they need to understand and what decisions they will need to make. At the very least, the meeting lets the trustees know who they should call when the time comes.
Trustee responsibilities extend beyond managing assets in a trust. They need to know the beneficiary and understand their needs. Even siblings assuming the trustee role for a sister’s trust will not know everything, necessarily. Are there support workers helping their sister and have they met them? Do they know their sister’s daily routine? Who are her medical practitioners? Who are her friends?
Managing the administrative aspects of a trust has a learning curve itself. Making thoughtful, informed and appropriate decisions in the best interest of the beneficiary carries broader responsibilities that require a much more intimate understanding of the beneficiary’s life. Simply because the trustee is a sibling does not mean they have kept abreast of their brother or sister’s likes, dislikes, routine and basic needs.
If you are asking a person to help take care of your son or daughter after you have passed away, go beyond the request. Help them understand the details. Introduce them to the people in your child’s life – their friends and the professionals that help your child and you; support workers, medical practitioners, and the advisors. Who is the lawyer who drafted your estate plan? Which financial professional will manage the assets in the trust? Connect them with the accountant who can file taxes for the trust.
Unless there is an open and on-going dialogue with the trustees before they actually become trustees, it will take them a long time (months, possibly years) before they feel they have everything under control. Trustees who are well informed before they take on their responsibilities will still go through a period of adjustment. Those who are left to figure it out entirely on their own will likely struggle. The conversations may not be easy, but they are so important to have them.