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Effective: December 1, 2006 |
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19.25.35.10ar1 - Trust Income (Archive) |
Archived: February 1, 2010 |
The purpose of this manual section is to help distinguish what is considered income to a trust and what is considered income to a client when dealing with a trust. For more specific information on whether income is available, excluded, or counted, please see the specific trust section.
For help in determining if income is legally assigned to a trust, please refer the trust to the county attorney or follow your agency's procedures to submit a policy question to HealthQuest.
Income to the trust is not counted as income to the client.
Income to a trust may include:
l Income earned by the trust.
Example:
Dividends earned on shares of stock owned by the trust and paid to the trust.
l Income which has been legally assigned to the trust.
Example:
A court orders a personal injury lawsuit to establish an annuity as part of the settlement. The annuity payments are then made into the trust.
l Income assigned to the trust and directly deposited into the trust.
At the time of assignment determine if an improper transfer has occurred. The amount of the transfer is the amount the client would receive in their lifetime.
Example:
A client assigns her pension payments to a trust. The pension payments are no longer considered income to the client, but rather are income to the trust.
Action:
The amount of total pension payments the client would receive in her lifetime but has assigned to the trust is an improper transfer.
The following are examples that relate to trusts but are considered to be income to the client in the month received. See Income on how to treat income to the client.
l Income the client receives and later deposits into a trust. See Transfers to determine when income deposited into a trust is improper.
l Income directly deposited into a trust asset, but which is not assigned to the trust.
Example:
Client deposits his wages into a savings account that is owned by a trust.
Action:
Count the wages as income to the client in the month received. Review the trust to determine if an improper transfer has taken place.
l SSA or Railroad Retirement payments direct deposited into an account held by the trust. This is per SSA laws.
l Income from the trust paid to the client, or on behalf of the client, for his/her needs.
Exception: Income paid for expenses from a Supplemental Needs or Special Needs trust are not considered income to the client.