<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=us-ascii">
<meta name="Generator" content="Microsoft Word 15 (filtered medium)">
<style><!--
/* Font Definitions */
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:ParkAvenue;
panose-1:0 0 0 0 0 0 0 0 0 0;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri",sans-serif;}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:#0563C1;
text-decoration:underline;}
a:visited, span.MsoHyperlinkFollowed
{mso-style-priority:99;
color:#954F72;
text-decoration:underline;}
span.EmailStyle17
{mso-style-type:personal-compose;
font-family:"Calibri",sans-serif;
color:#1F4E79;}
.MsoChpDefault
{mso-style-type:export-only;
font-family:"Calibri",sans-serif;}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]-->
</head>
<body lang="EN-US" link="#0563C1" vlink="#954F72">
<div class="WordSection1">
<p class="MsoNormal"><span style="color:#1F4E79">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F4E79"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F4E79">I understand that the bene is an EDB under the SECURE Act. But, the question I have is this:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F4E79"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F4E79">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,
<b>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?<o:p></o:p></b></span></p>
<p class="MsoNormal"><span style="color:#1F4E79"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F4E79">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.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F4E79"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F4E79">Thanks much.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F4E79"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F4E79">Best, Claudia<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F4E79"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F4E79"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><i><span style="font-size:12.0pt;font-family:ParkAvenue;color:#1F4E79">Claudia A. Gowan<o:p></o:p></span></i></b></p>
<p class="MsoNormal"><b><i><span style="color:#1F4E79"><o:p> </o:p></span></i></b></p>
<p class="MsoNormal"><b><span style="color:#1F497D">Claudia A. Gowan, PLLC<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="color:#1F497D">1001 Fourth Avenue, Suite 3200<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="color:#1F497D">Seattle, WA 98154<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="color:#1F497D">(206) 443-2733 (T)<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="color:#1F4E79"><a href="mailto:claudia@cagowanlaw.com"><span style="color:#1F4E79">claudia@cagowanlaw.com</span></a><o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="color:#1F4E79"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span style="color:#1F4E79"><a href="http://www.seattletrustsandestates.com/"><span style="color:#1F4E79">www.seattletrustsandestates.com</span></a><o:p></o:p></span></b></p>
<p class="MsoNormal"><o:p> </o:p></p>
</div>
</body>
</html>