The customer has a revocable trust with a corpus of $300,000. Under the terms of the revocable trust, the Trustee has complete discretion in disbursing funds from the trust. Each month the Trustee disburses $100 to the customer as an allowance and $500 to a property management firm for the upkeep of the customer’s home from the income earned by the trust.
On June 15, 2015, the Trustee gives $250,000 from the trust corpus to the customer’s brother. In September 2015, the customer applies for ALTCS benefits and is approved.
The $250,000 from the trust was given away by the trustee within the 60-month look-back period, and is evaluated as a transfer with uncompensated value and a transfer penalty is imposed, beginning September 1, 2015.
NOTE Since the trust is revocable, the entire remaining value of the corpus is a counted resource. In this case the remaining $50,000 is counted. The $100 personal allowance and the $500 for upkeep of the home property are treated as counted income since they are being paid from the trust income.