CANADA Law and Practice Contributed by: Ian Hull, Suzana Popovic-Montag and Nick Esterbauer, Hull & Hull LLP
Registered Disability Savings Plans (RDSPs) RDSPs operate similarly to RRSPs and RESPs. Con - tributions to an RDSP are not tax deductible, and funds grow on a tax-deferred basis. RDSPs are also associated with government grants and bonds that increase the funds available to adults with disabilities. Henson trusts When providing a bequest to an adult beneficiary in a will, the testator may structure the gift as a Henson trust to allow the settlor or testator to provide a ben - efit to a beneficiary with a disability without negatively affecting their eligibility for government benefits and subsidies. The Supreme Court of Canada endorsed the use of Henson trusts to preserve disability-related benefits in SA v Metro Vancouver Housing Corp , 2019 SCC 4. 8.2 Appointment of a Guardian If a person possesses the mental capacity to appoint a power of attorney for property and/or personal care, the appointment may have the same legal effect as appointing a guardian, but without the cost and time associated with applying to the court. Guardians appointed by court order are supervised by the courts and may be required to pass their accounts in respect of the management of the incapable’s prop - erty on a periodic basis. As fiduciaries, guardians are accountable for all transactions undertaken on behalf of the incapable person and may be personally liable for any breach of duty owed to the incapable. In December 2022, New Brunswick became the first province in Canada to enact legislation permitting individuals to appoint different levels of decision- making support. 8.3 Planning for Incapacity In Canada, each province and territory has legislation governing powers of attorney and similar incapacity- planning documents. These instruments allow an indi - vidual to appoint a substitute decision-maker, often called an attorney, to make property decisions if they later become incapable of managing their property. A person is generally incapable of managing property if they cannot understand information relevant to man - aging their property or cannot appreciate the reason -
ably foreseeable consequences of making, or failing to make, a decision. To create a power of attorney, the donor must usu - ally be at least 18 years old and have the capacity to understand the nature and effect of the document, including the authority being granted, the property affected, an attorney’s duty to account, the donor’s ability to revoke the document while capable, and the risks associated with appointing an attorney. Powers of attorney must generally be executed in accordance with statutory formalities, often in the presence of one or two disinterested witnesses. In some circumstances, however, a court may validate a power of attorney despite a defect in execution. Powers of attorney are generally flexible planning tools. A donor may appoint one or more attorneys, require them to act jointly or independently, grant broad authority over property, or limit their authority to specific assets or decisions. A donor may also exe - cute multiple powers of attorney to operate concur - rently, so that different types of property are managed by different attorneys. In most Canadian jurisdictions, an attorney must be at least 18 years old and have capacity. 8.4 Elder Law Government Assistance in Respect of Financial Planning for Longer Lives Canada Pension Plan During working years, contributions to the CPP are deducted from the employment income of Canadi - ans. These benefits are normally received at age 65. Individuals who have worked in Canada can elect to begin receiving CPP payments (at a reduced amount) as early as age 60, or can defer their CPP benefits beyond age 65 to receive higher payments. Spouses can choose to split CPP benefits, so lower income is allocated to each spouse where one would receive considerably greater CPP payments than the other. The government is also doing more to protect employ - ees’ pension contributions. In April 2023, the Pension
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