411 TRUSTS USING THE ASSETS OF THE INDIVIDUAL OR SPOUSE (AAM)

411 TRUSTS USING THE ASSETS OF THE INDIVIDUAL OR SPOUSE (AAM)

SR 22-27 Dated 09/22 Previous Policy

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Treatment of this type of trust differs based on the date the trust was established.

Trusts Established After August 10, 1993

Trusts or similar legal devices established:

• after August 10, 1993; or

• prior to August 10, 1993, but to which additional funds were added after that date.

The following requirements apply regardless of:

• the purpose for which the trust or similar legal device was established;

• any restrictions on distributions or their use; or

• whether the trustees or similar entities can exercise discretion under the trust.

No clause or requirement in the trust, no matter how specifically it applies to state or federal programs, will preclude a trust from being considered under this section. Where a trust includes assets of others as well as the individual, this policy applies only to the assets attributable to the individual.

Revocable Trusts

Revocable trusts can be revoked by the grantor and include trusts that are called irrevocable but which will terminate if some action is taken by the grantor.

Treatment: The entire principal of the trust is counted as an available resource to the individual.

• Trust payments made to, on behalf of, or for the benefit of the individual, are considered unearned income to the individual; and

• Any payments from the trust which are not made to, on behalf of, or for the benefit of the individual, are considered assets disposed of for less than fair market value.

Irrevocable Trusts

Irrevocable trusts cannot in any way be revoked by the grantor.

Treatment: Treat the principal of the trust as an inaccessible resource.

Exception: If terms of the trust permit payments to, for the benefit of, or on behalf of the individual, treat:

• payments of income or payments from the principal of the trust made to or benefiting the individual as unearned income;

• income from the principal of the trust which could be paid to or for the benefit of the individual, but is not, as a resource available to the individual;

• any portion of the principal of the trust that could be paid to or for the benefit of the individual, but is not, as a resource available to the individual; and

• any payments of income or principal of the trust which are not paid to or for the benefit of the individual as a transfer of assets for less than fair market value, effective with the date of transfer.

If some or none of the trust can be paid to the individual, treat:

• payments of income or payments from the principal that can be made to or for the benefit of the individual, as unearned income or as a resource available to the individual; and

• that portion of the principal or income on the principal which cannot be paid, as a transfer of assets for less than fair market value.

In treating portions of the principal or income which cannot be paid to the individual as a transfer of assets, the transfer date is the date the trust was established or, if later, the date payment to the individual was restricted or eliminated.

NOTE: All trusts must be forwarded to DHHS.trustdept@dhhs.nh.gov for review. The Trust Department will determine whether the trust is countable as a resource, or if any disbursements are countable as income.

References: He-W 601.07; He-W 656.04; RSA 167:4