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
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To determine an approximate value for
To find the value using mathematics
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