How do I leave money to a child on AISH without losing benefits?

Why not leave the money to your child outright?

An outright inheritance may affect your child's benefits. Under AISH and ADAP, a beneficiary who inherits outright has 365 days to move the money into a trust or an RDSP.

The 365 days run from the day the money is received. Your child, or someone with legal authority to act for them, must move it. Leaving the share in a trust from the start avoids that race.

What is a Henson-style discretionary trust?

It is a trust named after an Ontario court case. The trustee decides whether and when to pay anything to a beneficiary with a disability. The beneficiary cannot demand the money.

In Alberta, any trust is exempt under AISH and ADAP, whether or not it is discretionary. So why choose a discretionary one? Payments out of a trust can count as income. Discretion lets the trustee decide when and how much to pay, and check the effect on benefits first.

Since July 2026, many AISH clients have moved to the Alberta Disability Assistance Program (ADAP). The same trust point applies to both programs.

Where does an RDSP fit?

A Registered Disability Savings Plan is a federal savings plan for a person approved for the Disability Tax Credit. Keep these points in mind:

• It can be opened until the end of the year the person turns 59.
• Lifetime contributions are capped at $200,000.
• If you hold your child's plan, ask the issuer who will take over when you die. The rules limit who can.
• A special rule lets a family member hold the plan for an adult whose capacity is in doubt. It applies only to plans entered into before 2027, unless Parliament extends it.
• A parent's RRSP or RRIF can roll into the RDSP of a child who depended on them because of a disability. It counts toward the $200,000 limit and attracts no government grants.
• When your child dies, the plan is paid to their estate by December 31 of the following year. Grants and bonds paid in the prior 10 years are repaid.

Who prepares the trust, and who runs it?

A lawyer is the right person to draft your will and any trust. Ask your lawyer how to protect a beneficiary on AISH, ADAP or other benefits that depend on income. Ask for a written quote for setting up the trust and for each year's returns and accounts.

A trust may need to file a T3 return each year. Under Alberta's Trustee Act, a trustee must use proper care, avoid conflicts, invest prudently and treat beneficiaries fairly.

Once your child is 18, you have no authority just because you are family. A guardian or trustee needs a court order, and Alberta advises applying soon after the child turns 17.

Related questions

Does a trust count as an asset for AISH in Alberta?

No. In Alberta, a trust is an exempt asset under AISH and ADAP whether or not it is discretionary. Payments out of the trust can count as income, so the trustee should check the effect on benefits first.

What happens if my child on AISH inherits money directly?

Your child has 365 days from the day the money is received to move it into a trust or an RDSP. Your child, or someone with legal authority to act for them, must move it.

Is a trust worth it just to avoid probate in Alberta?

Rarely. Alberta's court fee for a grant of probate is capped: for an estate with a net value in Alberta over $250,000, it is $525. A trust earns its cost when it protects a person.

Drawn from Legacy Planning in Care, Chapter 12. Trusts at this stage of life, by Derik Godbout, PBA, CEA, DMA. Reviewed October 2026. General information, not advice for your situation; rules and amounts change, so confirm current figures before you act.

Go deeper: Event 11: Estate Planning, Wills, POA & Beneficiaries

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