512-2.1 Revocable Trusts Established on or after August 11, 1993

Effective Date: February 1, 2025

When the individual or the individual's spouse (or guardian) or someone acting on behalf of the individual or spouse, have established a trust on or after August 11, 1993 and either one of them has the right to amend or terminate the trust, the trust is revocable. Verify the value of all assets held in the trust.

The principal of the trust is available and counts as a resource. Any income earned by the trust and paid into the trust is also an available asset.

Payments made from the trust to or for the benefit of the individual, or the individual's spouse, are income in the month received.
1. Payments made directly to the individual or spouse, or to someone who helps manage their finances such as a guardian, conservator, representative payee, or other responsible person is income in the month the payment is received.
2. Payments to a third party that provide a benefit to the individual or spouse are counted as income only if the item or service purchased would be counted as income in-kind, such as shelter for an aged, blind or disabled individual. Payments for medical expenses for the individual or spouse are never counted as income.

Payments made from the trust that do not benefit the individual or the individual’s spouse are treated as a transfer of assets for less than fair market value. Also, any changes made to the trust that restrict or limit its use for the individual or spouse may be a transfer of assets. See section 575-1 to decide if a transfer penalty applies.
A revocable trust may contain provisions that make it irrevocable upon a specific event. For example, a trust established by a married couple may say that when the first grantor dies the trust becomes irrevocable. This does not mean the trust becomes unavailable to the surviving grantor, it just means the surviving grantor cannot revoke the trust. Use the policy in 512-2.2 to determine availability if this is the case.