A. Transfers to A Countable Trust
There is no sanction for transfers to a trust if the resources transferred to the trust continue to be a countable resource, or the entire trust is a countable resource. For example, if the a/r transfers $3,000 into a revocable trust, the trust is a countable resource and no transfer sanction applies.
B. Transfers To A Trust/Annuity For The "Sole Benefit" of an Allowable Person
1. Transfers by the a/r to a trust for the "sole benefit" of another person are allowable. An allowable person is:
a. The a/r’s spouse, or
b. The a/r’s blind/disabled child (determined by SSA) of any age, or
Note: For purposes of determining whether an exception applies, child means biological child, adopted child, or stepchild of any marital status unless otherwise stated.
c. Any other unrelated disabled individual (determined by SSA) who is under age 65 at the time the trust is established.
2. To be allowable, a transfer to a third party for the "sole benefit" must meet the following criteria:
a. The resource cannot benefit anyone in any way but the allowable person at the time of the transfer and for the remainder of that person’s life.
b. The transfer must be in the form of a trust document (or similar legal document) which legally specifies the conditions under which the transfer was made, who can benefit, and the amount of the benefit.
c. Trustee Rule: The trust may provide for reasonable compensation for a trustee to manage funds. Reasonable compensation is based on the time involved to manage the trust and the prevailing rate of compensation. Evaluate each situation on a case-by-case basis to determine if the compensation is reasonable.
3. If the beneficiary of the trust applies for SA, evaluate the trust for its affect on the beneficiary’s eligibility.
C. Transfers to Special Needs or Pooled Trusts
1. In addition to transfers to trusts for the "sole benefit" of a disabled/blind individual, transfers of the a/r’s resources to a Special Needs or Pooled trust are an allowable transfer when the terms of the trust meet all the criteria in SA-3200, Resources.
2. Forward a copy of the trust document to DMA, Third Party Recovery Section, 2508 Mail Service Center, Raleigh, N.C. 27699-2508. The telephone number is 919-814-0240.
D. Purchase of an Irrevocable Burial Contract
Resources used to purchase an irrevocable burial contract are an allowable transfer and create a trust when:
1. It is purchased for the benefit of the a/r or the a/r’s spouse, child under 21, or blind/disabled child of any age, and
2. The contract lists each burial item and/or service.
For questions or clarification on any of the policy contained in these manuals, please contact your local county office.