Law Commons^™

What happens when a client's IRA (or qualified retirement plan) names a third party supplemental needs trust (SNT) as a beneficiary? From a tax perspective, the result might not be pretty. The difficulty in integrating an SNT with an IRA lies in the "see through trust" rules which must be observed in order to qualify for beneficial income tax treatment.

A "pooled trust" -- or a (d)(4)(c) trust -- is unique in several ways: (a) A pooled trust is not restricted to individuals under age 65 (although this is under challenge in certain states); (b) A pooled trust can be established by the individual himself/herself; and (c) The at-death "payback" requirement to satisfy the Medicaid lien at a beneficiary's death is stated differently than the payback requirement of a (d)(4)(A) (or "payback") trust. Trusts in other states other my own state of South Dakota have been established to qualify for the special pooled trust benefits. In 2003, I personally undertook …