Social Security Administration Sole Benefit

SI 01120.203 B(2)(e)

e. Established for the Sole Benefit of the Individual

Under the pooled trust exception, the individual trust account must be established for the sole benefit of the disabled individual. (See SI 01120.201F.2. for a definition of sole benefit.) This exception does not apply if the account
  • provides a benefit to any other individual or entities during the disabled individual’s lifetime, or
  • allows for termination of the trust account prior to the individual’s death and payment of the corpus to another individual or entity

SI 01120.201F.2. Trust Established for the Sole Benefit of an Individual

Consider a trust established for the sole benefit of an individual if the trust benefits no one but that individual, whether at the time the trust is established or at any time for the remainder of the individual’s life. However, the trust may provide for reasonable compensation for a trustee(s) to manage the trust, as well as reasonable costs associated with investment, legal or other services rendered on behalf of the individual with regard to the trust. In defining what is reasonable compensation, consider the time and effort involved in providing the services involved, as well as the prevailing rate of compensation for similar services considering the size and complexity of the trust.
NOTE: This should not routinely be questioned unless compensation is being provided to a family member or the adjudicator has some other reason to question reasonableness of the compensation.
Do not consider a trust that provides for the trust corpus or income to be paid to or for a beneficiary other than the SSI applicant/recipient to be established for the sole benefit of the individual. However, payments to a third party that result in the receipt of goods or services by the individual are considered for the sole benefit of the individual. The following disbursements or distributions are also permitted:
  • reimbursement to the State, after the individual’s death, for medical expenses paid on the individual’s behalf (see SI 01120.203B.1.f. and SI 01120.203B.2.g.);
  • upon death of the beneficiary, retention of a certain percentage of the funds in a “pooled trust” established through the actions of a nonprofit association in accordance with the trust agreement (see SI 01120.203B.2.); and
  • transfer of the remaining trust corpus to a residual trust beneficiary after the individual’s death.

 

You can view the original article on the SSA website here: https://secure.ssa.gov/apps10/poms.nsf/lnx/0501120203#b
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