How to Set Up a Henson Trust for Someone on AISH

A Henson Trust (also called an Absolute Discretionary Trust) is a special type of trust used in Alberta to protect a person’s AISH eligibility while still allowing them to benefit from money left by family.

Here’s how it works and how to set one up:
What a Henson Trust Does
A Henson Trust keeps the person on AISH safe because:
The trust belongs to the trustee, NOT the person on AISH
The trustee has full discretion about when to pay money out
The AISH recipient can’t demand money, so it doesn’t count as their asset
This means large inheritances do not remove AISH eligibility

How to Set One Up
Step 1 — Choose Someone to Be the Trustee
This is the person who handles all money in the trust.
Usually a:
Parent
Sibling
Trusted family friend
Or a trust company (like ATB or RBC Trust)

The trustee must understand:
They control all spending
They must act in the beneficiary’s best interests
They cannot give large cash gifts that might affect AISH

Step 2 — Have a Lawyer Draft the Henson Trust
A lawyer is required because it must be written correctly. The document can be created as part of:
• A Will (most common), or
• A Stand-alone trust agreement

The document needs to state:
It is an absolute discretionary trust
The beneficiary has no control over the funds
The trustee has full decision-making power
The purpose is to support the beneficiary without jeopardizing AISH.
Step 3 — Fund the Trust
Money can be added when:
A parent passes away → inheritance placed into the trust
Family adds money while alive
Insurance payouts go into the trust
Property or investments are transferred into it

Common assets in a Henson Trust:
• Cash
• RRSPs/RRIFs
• Life insurance
• Real estate
• GICs or investment

Step 4 — Trustee Manages the Funds
The trustee uses the money to help with things AISH doesn’t fully cover, such as:
• Clothing
• Transportation
• Medical/dental not covered
• Accessible equipment
• Recreation and social activities
• Education
• Travel

The trustee should avoid:
Giving the beneficiary cash
Giving “income” that might be counted by AISH. Paying bills directly on behalf of the beneficiary is usually safer.
Step 5 — AISH Notification
When the trust becomes active (usually after someone passes away), the trustee must tell AISH:
That a Henson Trust exists
Provide a copy of the trust document if requested

AISH reviews it to confirm:
The beneficiary does not control the trust
The trustee has full discretion
Payments are not guaranteed, If set up correctly, AISH does NOT count it as an asset.

Step 6 – Do You Need a Lawyer?
Yes. A Henson Trust must be drafted by a lawyer familiar with:
• Alberta estate law
• Disability benefits rules
• AISH asset regulations

Using the wrong wording can result in AISH treating the trust as an asset, which risks benefits.

Key Takeaways
A Henson Trust protects AISH benefits
Must be discretionary (beneficiary has no control)
Lawyer drafting is required
Trustee manages spending on behalf of the beneficiary
AISH must be notified when the trust becomes active