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Debra, Lawyer
Category: Canada Law
Satisfied Customers: 99929
Experience:  Lawyer
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I am a person with disability ( on disability assistance)

Customer Question

I am a person with disability ( on disability assistance) with a non-discretional Trust account. The Trust requires a co-signer. In order for me to be able to withdraw money from this Trust account my co-signer has to be in the bank with me in person.
My co-signer is leaving Canada to go to the United States permanently in less than a years time. When that happens I will no longer have access to my money; I can no longer withdraw money.
New rules now govern Trust accounts for the Disabled; we are now allowed to withdraw as much money per year as we need and we are allowed to have as much as 100,000 in our bank account while on assistance.
My Question is: Cant I simply remove all the money from the Trust account at once and the Trust will automatically close on its own ? This way I don't have to depend on a co-signer and I have access to my money.
Submitted: 1 year ago.
Category: Canada Law
Expert:  Debra replied 1 year ago.

Who is the Trustee and is the the co-signor?

Would they agree?

Customer: replied 1 year ago.
I am a Trustee and co-signer. My co-signer is also a Trustee. We both agree to remove all the money from the Trust account. If this is an option, we both would go into the bank and remove the money.
Customer: replied 1 year ago.
I can't find anyone else to act as a co-signer for me. Besides, persons with disability receiving assistance in British Columbia are now allowed up to 100,000 dollars CAD in their bank account. Further, there is no longer a limit on the amount we can take out of a Trust each month. Effectively, a Trust is now superfluous. It does not protect my money, it is not necessary.
I mentioned earlier that my co-signer is permanently moving from Canada to the United States. Since I cannot withdraw money from my account without my co-signer physically present; in less than a years time I will no longer have access to my money. I don't get enough to live on from the government. My rent alone uses up more than 80% of my income, and this is before bills such as Food, Electricity, Phone, (I don't have a TV). My income is 906.42 CAD per month. My rent is 830.00 per month. My phone is $35. Hydro averages $37 or so. Wi-fi is 68.00. Coin operated laundry costs at least 12.00 per month for one load of wash a week.
Customer: replied 1 year ago.
At the time my Trust was drawn up, Persons with disability receiving assistance, were not allowed money in their bank account. In order to qualify for assistance you could not have any money or assets unless they were in a Trust. In order to have enough money to live on I had to place my small inheritance in a Trust; otherwise I would have had to use most of my inheritance up first to qualify for assistance. I am competent to manage my money, pay rent and living expenses and manage my life. Establishing the Trust was merely an expedient to allow me to be able to keep my inheritance and live a reasonable manageable existence.
Expert:  Debra replied 1 year ago.

If the Trustee agrees there is no reason not to do this.

Presumably the person who left you the money just wanted to be sure you were not being cut off from your disability benefits but if you are sure you are not going to be then you are free to do what you want since the other Trustee agrees.

Customer: replied 1 year ago.
I set up the Trust ( together with a lawyer) after my mother's death, not my mother. I had been the one in my family who cared for our mother in her home until her death. I had only been on disability a number of months before she died, I was forced to set up a Trust account to protect my inheritance and be able to stay on disability assistance after the estate was out of probate. With the existing rules at that time without there being a Trust in place, I would have been disqualified from disability assistance and I would have had to use up all my inheritance money first and then go back on assistance after my inheritance was gone.Are you conversant with British Columbia Trust rules ? Are you a Lawyer in British Columbia, Canada ?
Customer: replied 1 year ago.
Why didn't my lawyer mention the possibility of simply removing the money from my Trust account and it would close by itself ? That is what I am wondering... As it is, my lawyer said I would have to hire a lawyer to close the account and to find out first if any tax is still owing.
Customer: replied 1 year ago.
btw, I had my own apartment, at the time of my mothers stroke. I moved out to care for her in her home while at the same time maintaining rent payments on my apartment.
Customer: replied 1 year ago.
that apartment was one of the few remaining reasonable rent apartments and included hot water, hydro, and laundry.
I paid for my groceries and other living expenses while I was staying at my mother's to care for her.
Expert:  Debra replied 1 year ago.

I don't know why the lawyer didn't suggest it but you voluntarily put the money in Trust and so there is no legal reason why the Trustees (you and the lawyer ) cannot decide to provide you with a lump sum payment from the Trust and that would then close it out.

The Trust was set up to shield you from losing the benefits that are not longer at risk and there is no longer a reason for the Trust.

I am a lawyer in Ontario where an absolute discretionary trust is mandatory if the beneficiary is on governmental disability benefits.

Customer: replied 1 year ago.
I am my co-signer are the Trustees. My lawyer is Not a trustee.
Expert:  Debra replied 1 year ago.

I do not know what you lawyer thinks, and I do not know all of the facts. All I can tell you is that if this is a trust where you can distribute any amount of money you wish at any time there is nothing stopping the co-trustees from deciding to distribute all the money and closing the trust.

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