In the case of an irrevocable trust where the assets of the individual (or the individual’s
spouse) were transferred along with the assets of another individual(s), these provisions
apply to the portion of the trust attributable to the assets of the individual (or
spouse). Thus, in determining income to the trust, you must prorate any amounts of
income, based on the proportion of the individual's assets in the trust.
EXAMPLE: Jimmy is an adult with cerebral palsy. Their grandparents left $75,000 in trust
for Jimmy in their wills. Recently (after 01/01/00), Jimmy won an employment discrimination
lawsuit and received a $1,500 judgment, which went into the trust that their grandparents
established. The $1,500 of Jimmy's funds are subject to the provisions for an irrevocable
trust and could be a resource if payment could be made to or for Jimmy's benefit.
For treatment of irrevocable trusts, see SI 01120.201D.2. in this section. The $75,000 deposited by Jimmy's grandparents is not subject to
these provisions and is not a resource. For third-party trusts, see SI 01120.200.
In determining income to the trust, we must prorate the income in proportion to the
percentage of funds placed in the trust by Jimmy. For income of a trust, see SI 01120.201J in this section. Since this is an irrevocable trust, we will count 1.96% ($1,500/$76,500)
of the trust earnings as income and not count 98.04% ($75,000/$76,500) of the earnings.
Disbursements from or additions to the trust may require recalculation of the percentages.