[WSBAPT] SNT and IRAs

[Eric Nelsen]

Interesting...A disclaimer is not considered a gift in the context of a bankruptcy (if disclaimer is made before filing for bankruptcy), on reasoning that the disclaimer irrevocably causes any interest in the disclaimed property to completely bypass the debtor, and therefore the debtor's "assets" coming under control of the bankruptcy trustee at the time of filing can never include any potential right in the disclaimed property.

But sounds like the reverse is true in context of Medicaid qualification.

Sorry--that's an aside from the original thread.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040



From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Marcus Fry
Sent: Wednesday, May 06, 2015 11:23 AM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] SNT and IRAs

Yes, Medicaid considers a disclaimer as a gift. 42 U.S.C. 1396p(e) provides that the term "assets" used to determine income and resources of an individual or the individual's spouse includes any income or resources which the individual "is entitled to but does not receive because of action by any person, including any court or administrative body, acting at the direction or upon the request of the individual or such individual's spouse."  Washington State construes "action" to occur when one disclaims.

The one issue I am unsure of the answer to, is that a third party SNT created by a deceased spouse's will, if one disclaims and the result is that it goes to this SNT, is this "transfer/disclaimer" to trust that Medicaid considered an exempt transfer.

Also, if the IRAs didn't name a beneficiary, you are under a 5-yr pay out period anyway assuming W didn't die after 70 ½.  Thus, it may be better to cash them out, take the tax hit and divide one-half to H and one-half to W.   H may have some offsetting medical expenses to reduce the tax hit too!

Really complex situation Paul.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Roger Hawkes
Sent: Wednesday, May 06, 2015 10:46 AM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] SNT and IRAs

This raises the question for me of whether a disclaimer by a Medicaid recipient is considered an asset gift when disclaimed.  Who knows that?

Roger Hawkes, WSBA # 5173
19909 Ballinger Way NE
Shoreline, WA 98155
www.hawkeslawfirm.com<http://www.hawkeslawfirm.com>
206 367 5000
Fax is 206 367 4005

From: Marcus Fry [mailto:mfry at lyon-law.com]
Sent: Wednesday, May 06, 2015 10:28 AM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] SNT and IRAs

Paul:
The facts are bit confusing.  When you state non-probate assets you are not including the IRAs, correct?  You are talking about checking, savings and other accounts, correct?  If so, the problem in this situation is that H is automatically vested on death with the non-probate assets assuming he is either JTWROS or a beneficiary.  If he disclaims, that will have impact on Medicaid eligibility assuming he is either on Medicaid or will be on Medicaid in the next 5 years.  However, if the non-probate asset was just in wife's name and payable to the Estate, one-half of that asset would go to the SNT and the other one-half to H outright.  As to any non-probate asset in H's name only, one-half of that account would be disbursed to the SNT and the other half H would keep.

Of course, the above is assuming there was to CP agreement and I assume there wasn't one because W's Will had a SNT.  If there was a CP agreement, you are back in the disclaimer situation.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
Yakima, WA.







From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Paul Neumiller
Sent: Wednesday, May 06, 2015 9:50 AM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] SNT and IRAs

Anyone??

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Paul Neumiller
Sent: Monday, May 4, 2015 12:42 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] SNT and IRAs

Listmates: H & W make contributions to traditional IRAs and Roth IRAs over the years.  W dies and leaves a Will with all of her assets going to a special needs trust ("SNT") for H.  There is no "Super Will" provisions in the Will for non-probate assets.  H is presumably the sole beneficiary on the non-probate assets.  H opens probate as the personal representative.  Assume that H wants to transfer as many assets as possible to the SNT.

1.       How does H, as PR, get at and transfer W's IRAs to the SNT?  Is this where a waiver would work if H is the only beneficiary listed on the savings account? What if a waiver doesn't work because there are alternative beneficiaries (adult children) on the accounts?

2.       How do Washington's community laws work here?  Shouldn't, technically, ½ of W's savings accounts go into the SNT and ½ of H's savings account go into the SNT?

All guidance appreciated.
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