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(e) A trust that is funded by the proceeds of a court settlement in which the applicant or recipient was a plaintiff is a trust created with the assets of the applicant or recipient and is subject to 7 AAC 100.600 — 7 AAC 100.619. (f) If a transaction is identified in 7 AAC 100.600 — 7 AAC 100.619 as a transfer of an asset for less than fair market value under 7 AAC 100.510, an applicant or recipient may request an undue hardship exemption in accordance with 7 AAC 100.516. (Eff. 7/20/2007, Register 183) Statutory Authority: Authority: AS 47.05.010 AS 47.07.020 AS 47.07.040 7 AAC 100.602. General trust rules. (a) Except as provided under 7 AAC 100.604, if an applicant or recipient is the grantor of a revocable trust,

(1) the entire principal counts as an available resource to the applicant or recipient;

(2) a payment from the trust to, or for the benefit of, the applicant or recipient is income to the applicant or recipient; and

(3) a payment or a partial payment from the trust to a third party that does not benefit the applicant or recipient is a transfer of an asset for less than fair market value under 7 AAC 100.510. (b) Except as provided under 7 AAC 100.604, if an applicant or recipient is the grantor of an irrevocable trust and the terms of the trust authorize the trustee to make a payment to, or for the benefit of, the applicant or recipient

(1) the principal of the trust is not a countable resource, but the maximum amount that the terms of the trust allow the trustee to pay to, or for the benefit of, the applicant or recipient is a countable resource regardless of actual payment;

(2) a payment from the trust to, or for the benefit of, the applicant or recipient is income to the applicant or recipient; and

(3) a payment, or a portion of a payment, from the trust to a third party that does not benefit the applicant or recipient is a transfer of an asset for less than fair market value under 7 AAC 100.510.