Interest in Henson Trust Not An Asset

S.A. v Metro Vancouver Housing Corp.


In the recently released case S.A. v Metro Vancouver Housing Corp.,[1] the Supreme Court of Canada (Supreme Court) had its first opportunity to consider the nature of Henson trusts.  Henson trusts are settled for the benefit of a person with disabilities who relies on publicly funded social assistance benefits.


The issue in the appeal was whether the interest the appellant, S.A., had in a trust that was created for her care and maintenance should be treated as an “asset” which would negatively affect her eligibility to participate in a rental subsidy program offered by the Metro Vancouver Housing Corporation (MVHC).


The trust established for S.A.[2] was a Henson trust: the trustees had the ultimate discretion with respect to payments out of the trust to the person with disabilities for whom the trust was settled (S.A.).  S.A. could not compel the trustees to make payments to her and was prevented from unilaterally collapsing the trust.  S.A. had no enforceable right to receive any of the trust’s income or capital.  Since the person with disabilities had no enforceable right to receive any property from the trustee of a Henson trust, the interest he or she has is not generally treated as an “asset” for the purposes of means-tested social assistance programs.[3]


The Metro Vancouver Housing Corporation provided rent subsidies to eligible tenants on a discretionary basis.  An “eligible tenant” is one who, among other things, has less than $25,000 in assets.


The Supreme Court held that S.A.’s interest in the trust was not an asset which would negatively affect S.A.’s eligibility to participate in the rental assistance program provided by MVHC.  The Supreme Court arrived at this conclusion because:


  • The trust’s terms provide that the trustees may decide not to make any distributions to S.A. at all;
  • A. did not have an enforceable right to receive anything unless and until the trustees decide to exercise their discretion in her favour; and
  • The trust could not be unilaterally collapsed by S.A. and that any remainder of the trust fund would pass to some third party on S.A.’s death.[4]


The analysis above coupled with the Supreme Court’s discussion of the meaning of the word “assets” as it is used in the MVHC assistance application led the Supreme Court to conclude that the interest in the trust was not an asset.

[1] 2019 SCC 4.

[2] S.A. was a co-trustee but her status as a co-trustee was irrelevant to the determination of her interest in the trust—she was required to reach decisions unanimously with her co-trustee, must exercise her discretion independently, in accordance with the terms of the trust and in compliance with her fiduciary obligations, see Ibid at para 37.

[3] Ibid. at para 2.

[4] Ibid. at paras 35 – 39.