[WSBAPT] SNT ?

[Marcus Fry]

Claudia:
You could use a springing trust, i.e., basically authorize the PR to create and fund a 3rd party testamentary SNT upon the decedent's death.  I am not aware of any challenges to this type direction.   However, I rarely use these if there is clearly a disabled individual because you essentially draft a testamentary SNT by stating the majority if not all of its terms in the Will anyways.  As such, I usually recommend the client have mandatory funding of the testamentary SNT and the trustee of that trust can then decide whether to pass it through to the beneficiary at any time after death, whether that be immediately or 40 years later.

A good reason why are the following: I have a current case where the disabled beneficiary has a romantic interest.  Clients believe the romantic interest is an exploiter/manipulator.  As such, placing the funds into the SNT has nothing to do with the individual's disability, for government benefits but everything to do with concerns about possible exploitation of the beneficiary.  In another situation, it is possible that the person's disability will lead to long term care coverage needs and although a SNT may not be needed immediately, it may be best down the road.  The key is selecting a good trustee who will take the time to understand the testator's wishes and objectives.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
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, September 28, 2020 3:13 PM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] SNT ?

Colleagues:

I have a question that I sent to a few people that I know practice in the special needs area, but maybe one of you can confirm my thought - or tell me I am all wet.

Client is leaving $ for 1 son who is on SSDI.

They would rather wait until her death to see if a "trust is really necessary" so want the Will to only direct the PR to set a trust up, if necessary.

My concerns are several layers deep, but the reason I am asking for your input:

Under WA law, property vests in a beneficiary immediately upon death (subject only to expenses, etc.).

I'm thinking the 250k would vest in son personally, outright, immediately on Mom's death.

Thus, if there is no trust to receive it, it could disqualify him for SSDI purposes.     Is this correct?

In other words, the trust should be in the Will, ready to receive the bequest and NOT set up after the fact ??

I'm concerned that if it is subsequently established - it essentially becomes a self-settled trust because the property vested in him at death. But, as above, perhaps I am off.

Thanks for any yea or nay.

Best, Claudia

Claudia A. Gowan

Claudia A. Gowan, PLLC
2212 Queen Anne Avenue No., # 338 (M)
Seattle, WA 98109
(206) 443-2733 (T)
claudia at cagowanlaw.com<mailto:claudia at cagowanlaw.com>

[cid:image001.jpg at 01D695AD.2A7CC870]<https://www.bestlawyers.com/lawyers/claudia-a-gowan/141568>

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

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