752-9          TRUST FUNDS

A trust fund is created when a person transfers real or personal property to a trustee to be distributed at a later date, together with any income the property generates, to a designated beneficiary.  The property that is held in trust is protected from both the person who established the trust and the designated beneficiary until the condition of the trust has been fulfilled.

If the person who established the trust is also the sole beneficiary of the trust and is not legally incapacitated, he can terminate the trust at any time even if the purpose for which it is established is not fulfilled.  Trusts set up in the fashion will be considered available resources.  They will also be considered countable resources, if the applicant is not legally incapacitated and is the legally responsible natural or adoptive parent of the children for whom assistance is being sought.

All other trust situations not noted above must be individually examined to determine if they are available and if they are exempt or countable.  Examination is done by viewing the trust documents and contacting the persons who establish the trust or who serve as trustees.  These other trust will be considered available and countable resources if:

1. The conditions of the trust grant the power to terminate or modify the trust and release the property to the applicant and/or the Temporary Assistance children; and 

2. That power to so modify or terminate is granted solely to one or both of the following persons:

1. The natural or adoptive applying parent of the children; and/or 

2. Another relative or non-related person who can be contacted and who states a willingness to modify or terminate the trust.

3. All trusts determined to be countable must have their value verified by obtaining a copy of the trust document and other related documents necessary to determine the net worth of the trust.

Funds held in trust by the State for children in the legal custody of OCSOffice of Children's Services are not available to meet the needs of the child for whom they are held, nor to any family with whom the child lives.  The interest that accrues on the balance held in trust is similarly unavailable.  Such funds become available, and are subject to treatment as countable resources, only when they are actually released to the child or to the child’s parent or legal guardian.

Upon release, the funds from the trust are converted from an unavailable to an available resource.  Deposits of dividend payments and postings of accrued interest into these accounts do not usually generate income to the client; the only circumstances under which such deposits or interest are treated as available income is when they are posted to the account in the same month that the funds are released to the child, parent, or legal guardian.

Funds held in PFDPermanent Fund Dividend trusts may be released by OCSOffice of Children's Services upon the child’s release from legal custody, or by court order.  The amounts and dates of such a release must be verified and documented in the case record.