2) Trust Corpus is unavailable to the customer

The customer established an irrevocable trust with a corpus of $350,000 on April 15, 2012. He enters a nursing facility on November 15, 2015, and applies for ALTCS benefits that month.

On January 15, 2015, the Trustee gave $100,000 from the trust corpus to the customer’s brother.

Under the terms of the irrevocable trust, the Trustee cannot disburse any of the trust corpus to the customer. The trust terms do allow the Trustee to make disbursements to the customer from the trust income. Each month the Trustee disburses $100 to the customer as an allowance and $200 for the customer’s car payment.

Since none of the corpus can be disbursed to the customer, the entire value of the trust corpus at the time it became irrevocable is evaluated as a transfer with uncompensated value. The date of the transfer into the trust is within 60-month look-back period. An uncompensated transfer of $350,000 occurred on 4/15/2012. The fact that $100,000 of those funds was later transferred out of the trust to the customer’s brother does not change the amount of the transfer on which the penalty is based. That amount remains $350,000.

NOTE The $100 and $200 disbursed from the trust earnings count as unearned income to the customer.