Of course, one would have to see the actual decision of the Minister in this particular instance, but the case referred to in the CBC report tends to support the validity of a version of the Henson trust.
Québec (Curateur public) c. A.N. (Succession de)(2014) involved a claim brought by a disabled person against the trustee of a trust established by the claimant's mother. The trust provided that the trustees would "in their sole discretion" pay "such sums ... they deem necessary for any additional maintenance" of the claimant including any "additional provision for education, medical care, residence, companion etc."
The case was essentially an action to force the trustee to pay the claimant's expenses. The Minister of Employment had determined that the claimant was not entitled to social assistance because the claimant had sufficient assets in the trust. The Minister's argument was based on LRQ c. A-13.11:
"An independent adult or the members of a family must exercise their rights or take advantage of other statutory benefits when the exercise of such rights or the receipt of such benefits would affect the adult's or the family's eligibility for a financial assistance program, or reduce the amount of assistance."
Clearly the Minister took the position that the trust was an asset in which the claimant had a right, and if exercised, would provide him with an income in excess of the benefits threshold.
For his part, the trustee argued that the terms of the trust instrument did not obligate him to pay routine living expenses (besoins journaliers). Instead, the trust only provided for the payment of "additional maintenance." In an effort to assist the claimant in obtaining benefits, the trustee asserted that the corpus of the trust constituted "un patrimoine distinct" from that of the claimant and that consequently the claimant had no real or personal right exercisable against the trust. The contingent nature of the benefits meant there was no real right.
The court ultimately held that the beneficiary's rights were contingent on the "absolute discretion" of the trustee and thus did not constitute a "right" of the sort envisioned by the statute. For my part, the most interesting aspect of the decision comes from the fact that the court's conclusion is primarily based on its view of testator freedom, rather than the rights of beneficiaries. According to the court, the testator had complete freedom to dispose of her property in such a way that beneficiary`s right to sums under the trust would be subordinate to whatever benefits might have first been received from the province. ("Usant de sa liberté de tester, la mère de M.N. était parfaitement en droit de subsidiariser les droits de son fils en vertu de la fiducie à ceux dont ce dernier bénéficiait déjà en vertu des lois sociales.")
Thus, the beneficiary had no right to exercise under the terms of the statute because the settlor made any payment from the trust dependent on the beneficiary's first having received state benefits. Put another way, because the trustee was only empowered to pay "additional maintenance," the beneficiary had no right of any kind until he had already received benefits from the state. It seems to me that it was the testator's right to determine the disposition of her property, rather than the beneficiary's interest in the trust, that seemed most important to the court. (Although, of course, both weighed heavily in the decision.)
The case in question (A.N.) is just over one year old. And, as I note above, it would be important to see the actual decision rendered by the minister. The news report indicates that this decision conflicts with A.N., which was only a decision of the Superior Court. It may be, therefore, that the province (in the age of austerity), may be setting the stage for an eventual reconsideration of A.N. I am, of course, only reading tea leaves, so take my opinion for what it's worth --- which admittedly may be nothing.
Matthew P. Harrington
Faculté de droit
Université de Montréal
De : Jason Neyers [mailto:firstname.lastname@example.org]
Envoyé : 28 avril 2015 10:54
À : email@example.com
Objet : ODG: Henson Trusts in Quebec
According to the CBC, the Quebec government has recently started recognizing assets held under a discretionary Henson trust as the property of the beneficiary thereby cutting the severely disabled from eligibility for government programs, despite a Superior Court ruling to the contrary:
This is extremely devasting for parents of the severly disabled who relied on the enforceability and interpretation of such trusts to care for their special needs children after they have gone. I wonder what Quebec trust lawyers think of this.
It will be interesting to see if this issue makes it up to the SCC.
Professor of Law
Faculty of Law
(519) 661-2111 x. 88435