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Verification
Written Trusts
Obtain the trust documents and any other verification that substantiates investments and distributions.
A trust document typically has an attachment (Schedule A) that itemizes all the property to be placed in the trust. The property listed on Schedule A is not actually held in the trust until the items are actually transferred into the name of the trust.
Oral Trusts
Oral trusts are rare, however they can be valid providing certain conditions are met. Obtain written affidavits and other documents which substantiate any investments and distributions. Affidavits must be dated and signed under penalty of perjury and must specify the terms of the oral agreement. Affidavits may be obtained from the individual or spouse, or any other person who knows the terms of the trust agreement, for example brothers, sisters, stock brokers, ministers, etc.
Real property cannot be held in an oral trust. When an oral trust is held in a financial institution, determine if the property is available. Additional documentation may be required to clarify the terms of an oral trust.
Exempt Income or Property Held in Trust
Exempt assets that are transferred into a trust, such as a principal residence, remain exempt. Placement of an exempt asset in a trust does not change the exempt nature of the asset.
For example, a couple transfers their home into a family trust. One spouse resides in LTC, the other spouse resides in the home. The home is exempt from MC purposes, regardless of the fact that it is included in the trust.
Related Topics
Trusts: Similar Legal Devices (SLD)
Identifying Characteristic of Trusts