It is well understood that the Registered Disability Savings Plan (RDSP) is tax-deferred, meaning it is not taxed until withdrawn. So how are Lifetime Disability Assistance Payments (LDAPs) taxed? Are the taxes paid by the beneficiary or the account holder? Are they subject to withholding taxes the same way withdrawals from Registered Retirement Savings Plans … Read more

An interesting forum post from a user in their 50s asked which type of registered account they should invest in.  Would it be better to open a Registered Retirement Savings Plan (RRSP) or a Registered Disability Savings Plan (RDSP)?  The person qualified for the Disability Tax Credit (DTC) and was currently out of the workforce.  … Read more

Understanding the timing and flexibility of RDSP payments is crucial, especially when compared to the more familiar RRSP or RRIF rules.  While both are designed for long term financial security, the rules regarding withdrawing from an RDSP are different. LDAPs must begin by age 60 By December 31st of the year the beneficiary turns age … Read more

Turning age 60 is a milestone for any RDSP holder, as the 10 year proportional repayment rule ends, and Lifetime Disability Assistance Payments (LDAPs) must begin.  However, if a beneficiary is also receiving provincial supports such as ODSP, does this result in the loss of benefits? Before age 65 – while still receiving provincial disability … Read more

For Canadians living with a disability, the Registered Disability Savings Plan (RDSP) is one of the most powerful and generous wealth building tools available. However, not every bank or credit union in Canada is equipped to open and administer these accounts.  Because the RDSP requires complex reporting to the federal government to trigger grants and … Read more

The Registered Disability Savings Plan (RDSP) is well known for its strict 10 year repayment rule.  For every $1 withdrawn from the account, $3 of government grants and bonds must be returned to the government, which is a costly penalty that discourages early withdrawals.  But what happens if the beneficiary faces a terminal illness and … Read more

A Henson Trust is one of the most powerful estate planning tools available to Canadian families with a loved one living with a disability.  Named after Leonard Henson who cared for his disabled daughter, this type trust is specifically designed to allow a person with a disability to inherit assets without losing their eligibility for … Read more

A QDT is a tax advantaged trust available to beneficiaries who qualify for the Disability Tax Credit (DTC).  It is an estate planning tool that must be created through a will as a testamentary trust and only becomes active when the person who wrote the will (the settler) passes away.  The executor is then responsible … Read more