Parents and guardians of minors or adults with disabilities have
extra considerations when developing their estate plans. It is
important that additional care is taken in order to ensure that
government benefits and inheritance from the estate are both
maximized for the benefit of the disabled person. There are many
strategies and tools that estate planners can use to assist parents
and guardians of people with disabilities.
It is important to note that the Alberta Wills and
Succession Act states that every parent has a duty to
adequately provide for any children of theirs who are unable to
earn a livelihood due to a mental or physical disability. This
means that those parents must leave sufficient inheritance to their
disabled children, whether or not the parent financially supports
that child during the parent's lifetime. If the parent does not
adequately provide for the disabled child in their will, then that
child, whether it is a minor or adult at the time of the
parent's death, can make a claim for a larger share of the
estate than what the parent left them in the will. These claims
result in costly and often lengthy battles in the court system,
which usually means that legal and expert fees chip away
significantly at the amount of money that is left for any of the
It is not easy to say what will constitute "adequately
providing for" a disabled child. The answer to that question
will be different in every case and depends on a wide variety of
How much does the child require to
meet their current and future needs?
What is the overall value of the
How many claimants are there?
What is the lifestyle the disabled
How much support was provided during
the parent's lifetime?
The uncertainty about whether or not the parent has adequately
provided for these specific beneficiaries illustrates the value in
legal and financial planning advice. Your lawyer will be able to
assist you in considering how much of your estate needs to be left
for any disabled beneficiaries.
Another question to consider when your estate plan includes a
disabled child or beneficiary is how you will structure any gifts
to those beneficiaries in order to maximize their inheritance while
also preserving any government benefits they receive. For example,
if the child receives AISH (Assured Income for the Severely
Handicapped), care must be taken to ensure that they do not hold
assets exceeding $100,000. If the beneficiary owns more than this
limited amount, they will lose their entitlement to all or part of
their AISH supports.
Exempt from this limit are assets including the
beneficiary's principal residence, up to two vehicles,
household goods and a prepaid funeral. Often the first use of
inheritance is to purchase a residence for the disabled person,
since that value is not included in the amount of assets the person
is able to hold while maintaining their AISH eligibility. There are
numerous other tools and exemptions that can be used to ensure that
the disabled person can receive both the inheritance and the
government benefits, including trusts and Registered Disability
Savings Plans, but this must be done carefully and with legal
advice in order to avoid disappointment and confusion after the
parent has died.
Ensuring that a disabled child will have sufficient funds
available for their support is one of the most important tasks that
a parent or guardian must undertake in their estate plan. Financial
planning and legal advice will be critical for parents in these
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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