1) Trustee has discretion to issue disbursements for the customer

The customer established an irrevocable trust with a corpus of $300,000 on March 1, 2009. He enters a nursing facility on August 15, 2015, and applies for ALTCS benefits that month.

On January 15, 2010, the Trustee gave $100,000 from the trust corpus to the customer’s brother.

Under the terms of the irrevocable trust, the Trustee has complete discretion to disburse the entire trust corpus and all income from the trust to anyone, including the customer. Each month the Trustee disburses $100 to the customer as an allowance and $500 to a property management firm for the upkeep of the customer’s home. This money comes from interest earned by the trust corpus.

The $100,000 gift to the customer’s brother is evaluated as a transfer with uncompensated value. However, the transfer was made before the look-back period begin date of 8/1/2010, and a transfer penalty period is not imposed.

NOTE Since the trustee has discretion to disburse the entire trust corpus to the customer, the entire remaining value of the corpus is a counted resource. In this case the remaining $200,000 is counted. The $100 personal allowance and the $500 for upkeep of the home property are treated as counted income since they are being paid from the trust income.