Absolute Discretionary Trust

KNOWLEDGE EXPECTED OF: QAFP^® Professionals

Awareness The state of being aware that something exists / to have familiarity with a particular activity or subject		Understanding To comprehend the general relationship of particulars / to have an expertise with how something works	Application Ability to put information to use / to use knowledge for relevant, practical purposes					Evaluation To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define To state exactly the meaning of	Identify To be aware of / to recognize and correctly name / to locate an appropriate resource	Explain To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it	Determine To ascertain / to come to a decision, such as by investigation or reasoning	Compare To note the similarities and differences between two or more things	Estimate To determine an approximate value for	Calculate To find the value using mathematics	Convert To change from one form or purpose to another	Evaluate To reach a conclusion or make a through careful study	Interpret To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

Identify the purposes for which an absolute discretionary trust may be used, such as:

Identify that an absolute discretionary trust may be an inter vivos or testamentary trust.

Awareness The state of being aware that something exists / to have familiarity with a particular activity or subject		Understanding To comprehend the general relationship of particulars / to have an expertise with how something works	Application Ability to put information to use / to use knowledge for relevant, practical purposes					Evaluation To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
Define To state exactly the meaning of	Identify To be aware of / to recognize and correctly name / to locate an appropriate resource	Explain To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it	Determine To ascertain / to come to a decision, such as by investigation or reasoning	Compare To note the similarities and differences between two or more things	Estimate To determine an approximate value for	Calculate To find the value using mathematics	Convert To change from one form or purpose to another	Evaluate To reach a conclusion or make a through careful study	Interpret To give the meaning of / to construe or understand / to translate orally

Hold cursor over or click on each term to read its definition.

Identify the purposes for which an absolute discretionary trust may be used, such as:

Identify that an absolute discretionary trust may be an inter vivos or testamentary trust.

Additional Knowledge Expected of CFP Professionals

Explain the purpose of an absolute discretionary trust that protects the benefits available to persons with disabilities (“Henson” trust).

Identify that an absolute discretionary trust may not protect the benefits available to persons with disabilities in all jurisdictions within Canada.
Identify that an absolute discretionary trust that protects the benefits available to persons with disabilities requires that the beneficiary has no vested interest in the trust and that the trustees have the absolute and unfettered discretion to operate the trust.
Explain factors to consider when considering setting up an absolute discretionary trust (“Henson” trust), such as:

Payments that can be made from the trust
Amount of benefits that the beneficiary will receive from disability related programs

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