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Click here to save article in WinZip.exe format to your PC A proposed form of trust was submitted
to the court for the court’s approval.
The court indicated that the trust document conformed with EPTL §
7-1.12 (the New York State statute which authorizes the creation of
supplemental needs trusts) and with both federal and state law. If a supplemental needs trust is to be
funded with the disabled person’s own assets and income, and that
disabled person seeks Medicaid, the trustee must comply with certain
regulations. Specifically,
the trustee must give notice to the Department of Social Services of
certain transactions. The
court focused on the advance notice required if the trust enters into
transactions which tend to substantially deplete the principal of the
trust. Furthermore, the trust
expressly indicated that the trustees must judicially account before being
discharged as trustees. The
court was of the opinion that in view of the law and the specific trust
provisions, there was no need for the trustees to submit an annual
accounting. Thus the court
instructed the petitioner to remove from the proposed trust those
provisions requiring an annual accounting. COMMENT:
While the Suffolk County Surrogate may have dispensed with an
annual accounting requirement, there is no assurance that other
Surrogate’s would do likewise in a similar case.
Furthermore, there was only $40,000 involved and it could be that
the Surrogate considered the possible cost to hire an accountant to
prepare an annual accounting. In
my view, when little money is being used to fund the trust, annual
accountings may add an unnecessary financial burden. |
