Page 49 - Senior Link Magazine Winter 2019- Online Magazine

HONORING SENIORS

according to the partnership property to give to the trust, but if room and board. However, the
agreement. It follows that, almost the trustor is young and healthy, person can have only one ABLE
anything a partnership can do, so such a trustor could obtain a hefty account, and annual contributions
may a trust. For example, a trust life insurance policy for relatively from all sources cannot exceed the
may buy and sell real property, little expense and name the trust as annual exclusion, currently $15,000;
open bank accounts or investment the beneficiary. the Social Security Administration
accounts, buy insurance, enter only exempts balances below
into contracts, own cars, trucks, A second common scenario occurs $100,000, and the person has a
airplanes, and so forth. And the when a disabled beneficiary lifetime limit of $370,000. Working
types and purposes of trusts vary unexpectedly receives property as in tandem, a supplemental needs
probably as much as the types and a gift or distribution from an estate trust can make distributions directly
purposes of partnerships. or trust. If the beneficiary has to an ABLE account to help cover
not yet reached the age of 65, the some of a beneficiary’s expenses
In the case of supplemental needs beneficiary, a parent, a grandparent, when those distributions might
trusts, two particular scenarios occur a guardian, or a judge may create otherwise count as income to the
frequently. In the first, a trustor, a supplement needs trust similar beneficiary.
such as a parent or other relative, to the one described in the first
wishes to set aside property that scenario, but upon the beneficiary’s
will help take care of a disabled death, any state agency, usually Lee Franks is a Partner with Franks
beneficiary, but the beneficiary Medicaid, that provided benefits & Pleasant in Lubbock and with
receives or might one day receive to the beneficiary would have first his partner, Laura Beth Pleasant,
a means-tested benefit, such as SSI claim to the remaining trust property practices law in Texas, focusing
on the needs of the elderly and the
or Medicaid, and such a gift would for reimbursement. disabled. More information can be
render the beneficiary ineligible. found at www.fplawteam.com
Possibly, the beneficiary does not In either scenario, any distributions
have the capacity to manage a direct for room and board
gift. Moreover, the trustor may (including rent
wish to protect the property from assistance, utilities,
potential creditors. The trustor property taxes,
could enter into an irrevocable groceries, etc.)
agreement with a reliable trustee generally count
who could be a bank, a spouse, or as income to the
even the trustor himself or herself, beneficiary and
to hold and manage the property could affect the
for the disabled beneficiary. As beneficiary’s public
long as the beneficiary has no benefits. However,
right to demand any distribution if a disabled person
at all or in any way control the can prove his or her
trustee, a properly constructed trust disability occurred
would not affect the beneficiary’s before the age of 26,
means-tested benefits. Upon the an authorized legal
beneficiary’s death, the trustee representative for the
would distribute the remaining trust person can open an
property according to the trustor’s account under the
instructions in the trust agreement. Achieving a Better
Life Experience Act
In an interesting variation on this (ABLE), which can
scenario, the trustor at the moment pay for “qualified
does not have much money or other expenses,” including

Lubbock Senior Link 49