Purchasing a vehicle from a pooled special needs trust

Often we receive requests from a beneficiary to purchase a car with the funds from their pooled trust account. We generally do not have an issue with approving such requests. However,  when a beneficiary requests that we purchase a vehicle in someone other than a beneficiary’s name, we have a sole benefit problem. There are many legitimate reasons why one would want to purchase a vehicle for the beneficiary but in another person’s name. Most commonly is when a beneficiary is unable to drive but still needs transportation. So how does the pooled trust purchase a vehicle in someone other than the beneficiary’s name without violating the sole benefit requirement? Social Security has recently provided us with some guidance. In Emergency Message 14026, Social Security released a “Trust Training Fact Guide” which states the following:

“If the trust purchases durable items, e.g., a car or house, either the beneficiary or the trust must be the owner (a car title may show the trust as a lien holder).
  If the trust fails to name the beneficiary or trust as owner, this might constitute a transfer of resources that could affect eligibility for SSI, or result in a loss of the Medicaid exception. 
 For the home, the beneficiary is considered to be living in his/her own home based on having an ‘equitable ownership’ and cannot ‘rent.’”

So, in order for a vehicle to be purchased from a beneficiary’s pooled trust account in the name of someone other than the beneficiary, the Trust must obtain a lien on the title. This allows the trust to maintain enough “ownership” of the asset as to not violate sole benefit rule. Then the only remaining issue is whether the purchase of a vehicle is a wise use of trust funds, and if so, how much is reasonable to spend.

Kole J. Long
Elder Law Attorney
Co-Trustee, Guardian Trusts


Popular posts from this blog

2019 Social Security and Medicaid Income and Asset Limits

Stimulus Checks - Will They Effect your Benefits?