What Can an SNT Pay for Without Affecting SSI or Medicaid?
Funds held in a properly drafted special needs trust will not a...
Read moreNo. Such a contribution does not meet the requirements of the annual tax exemption. A trust would not meet this requirement unless it complied with the rules set forth in the IRS Crummey case (to qualify for the annual exclusion, a trust must give a beneficiary certain withdrawal rights, so-called "Crummey powers"). However following those rules would disqualify or reduce the person with a disability's benefits.
Instead, you could transfer the $14,000 to an ABLE account set up for the person with a disability if that person was disabled before age 26 and no one else has made a contribution to the ABLE account. Your contribution would be tax-free.
Local Special Needs Planners in Your City
Funds held in a properly drafted special needs trust will not a...
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Low-income seniors and people with disabilities could save up to $7,500 this year through the Senior Tax Credit for the El...
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Once you begin to understand how the gift tax system really works, you may be pleasantly surprised to learn that most peop...
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