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the trustees can use the "Preferred
Beneficiary election" and attribute the trust income to the beneficiary of the trust without actually paying it out. The trust beneficiary would file a tax return as if they earned the trust income. The trust beneficiary would use their personal exemptions and tax
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In 2019, the
Supreme Court of Canada in S.A. v. Metro Vancouver Housing Corp., affirmed the Henson Trust. The Supreme Court held that a beneficiary of a Henson Trust has no vested interest in the trust. Further, the Supreme Court explained that the money the beneficiary received from a Henson Trust
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had set up an absolute discretionary trust for his daughter. The
Ontario Ministry of Community and Social Services took his daughter to court (following a Tribunal decision overruling the case worker), arguing that she had assets. The Divisional Court (a branch of the Ontario Superior Court of
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is not considered an "asset", as it relates to the policy of the Metro
Vancouver Housing Corp. The Supreme Court did explain, however, that a social assistance program may explicitly include a Henson Trust as an "asset", at which point the money received may be considered an "asset".
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relief by being taxed at a lower marginal rate than if the beneficiary's total assets were considered. However if the trust was established for a person with a disability in Canada, who has qualified for the
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ruled in 1989 that the trust assets were not vested in the beneficiary and thus could not be used to terminate government benefit programs.
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credits to reduce their taxable income. It can also be used to shield assets from matrimonial division in case of
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of the beneficiary. In most cases, the trust assets are immune from claims by creditors of the beneficiary.
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Ontario (Director of Income
Maintenance, Minister of Community & Social Services) v Henson
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315:"Can you put your trust in a Henson trust? Supreme Court of Canada says it depends"
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has "absolute discretion" in determining whether to use the trust
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persons. Specifically, it protects the assets (typically an
259:"Supreme Court of Canada - SCC Case Information - Search"
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government benefits. An example of such a benefit is the
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in the late 1980s. It became of wider interest when the
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with the beneficiary and thus cannot be used to deny
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317:. McInnes Cooper. 31 January 2019. Archived from
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141:The key provision of a Henson trust is that the
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285:"Supreme Court Of Canada Confirms That"
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265:. Supreme Court of Canada
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