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.
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