[WSBAPT] SECURE Act and Disabled beneficiary/Special Needs Trust

[Claudia A Gowan]

Colleagues, I am struggling with drafting a Special Needs Trust where there is a possibility that the trust may be funded (in part) with an IRA.

I understand that the bene is an EDB under the SECURE Act. But, the question I have is this:

Where the Trustee of an SNT has the discretionary authority to 'turn the spigot' of funds off or on, assuming a valid reason to withhold funds, will turning the spigot off change the status of the beneficiary as an EDB to a non-EDB and subject the IRA to the 10 year rule?

I am concerned that it would have this effect. I know the SECURE Act is new but I am hoping some of you skilled in disability planning may have some insight. Perhaps it would be better to simply avoid funding the trust with IRA assets for now, which isn't always possible.

Thanks much.

Best, Claudia


Claudia A. Gowan

Claudia A. Gowan, PLLC
1001 Fourth Avenue, Suite 3200
Seattle, WA 98154
(206) 443-2733 (T)
claudia at cagowanlaw.com<mailto:claudia at cagowanlaw.com>

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

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