[WSBAPT] Contingent funding of SNT?

[Marcus Fry]

Claudia:
Have the funds for each child split into separate trust funds instead of a single pot trust.  Insert SNT language into the trusts that you desire.  With SNT language, authorize the trustee to distribute from the trust, even if it reduces or eliminates benefits and also language that if the trustee determines that the disability or need for benefits have ceased, the trustee can terminate and distribute to the beneficiary.  You could do a single pot trust with the SNT language but that can be problematic if you are including tax defered retirement benefits as part of the plan.  Better to just separate out the trusts in the will from the start.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
Adoption Attorney*
P.O. Box 1689
Yakima, Washington  98907
Telephone:  (509) 248-7220
Facsimile:  (509) 575-1883

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Claudia A Gowan
Sent: Monday, February 01, 2016 3:52 PM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] Contingent funding of SNT?

Colleagues:

I am debating how best to approach the possibility that one or two of testator's children may need SSDI, Medicaid and other similar benefits in the future. The facts look like this:

Testators are married and fairly young. Together they have a number of children, two of whom may need assistance for disabilities in the future but it is impossible to tell now.

In the event of S1 testator's death, that share shall go to a marital trust for S2. In the event of S2's death, all of the property will go to a trust for the children.

The dilemma: what about the 2 who may need SNT provisions?

I would like to provide a direction under the trust that if either of the children may need or are on governmental benefits, the Trustee shall establish a SNT to hold such child's share(s). Basically, I would like to save the cost of the extra trust planning now, when the children are young enough that it is not at all clear that either of them will need assistance.

I am most concerned about whether or not such a directive is allowable given that the Trustee would be establishing the trust and distributing the affected child's share to the trust, rather than the trust being in place under the Will already. Any thoughts on the pros and cons of this?

Many thanks,

Claudia



Claudia A. Gowan

Claudia A. Gowan, PLLC
2101 Fourth Avenue, Suite 1900
Seattle, WA 98121
(206) 443-2733 (T)
(206) 448-1843 (F)
claudia at cagowanlaw.com<mailto:claudia at cagowanlaw.com>

www.seattletrustsandestates.com<http://www.seattletrustsandestates.com/>

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