| Transfers from trusts…..read on:
CLIENT QUESTION:
Good afternoon Mr. Davidow – Always appreciate your insight and guidance! May a trustee under a Medicaid Irrevocable Trust have full discretion to distribute trust principal during the Grantor’s lifetime to the Grantor’s descendants (the remaindermen) or is the trustee bound to use the health, education, maintenance, and support (HEMS) standard? Many thanks as always! You’re the best.
MY RESPONSE:
The question is what is the correct standard (or guidance) a trustee has to follow when distributing assets from the trust to the beneficiaries during the life of the Grantor?
Full discretion means there is no standard, that is, the trustee can do whatever they want. The HEMS standard means the trustee can only distribute if the money is for the beneficiary’s health, education, maintenance, or support…but not general happiness.
The answer is that you must read the trust to see what the standard is in the trust. However, all of my Medicaid Irrevocable Trusts say that the trustee has FULL DISCRETION, but MUST receive the consent of the Grantor before any such distribution. |
