knowledge topics
Absolute Discretionary Trust
KNOWLEDGE EXPECTED OF: CFP® Professionals Only
- Explain the purposes for which an absolute discretionary trust may be used, such as:
- To protect spendthrifts
- To protect minors
- To protect persons with disabilities
- Identify that an absolute discretionary trust may be an inter vivos or testamentary trust.
- 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 the trustees have the absolute and unfettered discretion to operate the trust.
- Explain the 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
Glossary of Verbs (mouse over to see definition)
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
Read more about the Taxonomy used in the FP-BoK
