When a (d)(4)(A) trust runs low on assets or is unable to find a trustee, the obvious solution is to send it to a (d)(4)(C) (pooled) trust. But there has been no Social Security Administration (SSA) policy allowing such a transfer without triggering payback requirements, although transfers from one pooled trust to another are allowed.
In an important policy change, the SSA will now allow for a transfer of the beneficiary’s assets from a (d)(4)(A) or (d)(4)(C) trust to a secondary (d)(4)(A) or (d)(4)(C) trust, or vice versa, as long as the two trusts are for the same beneficiary.
The change is contained in a new Program Operations Manual System (POMS) transmittal adjusting policies related to early termination provisions. Commenting on the news on ASNP’s member listserv, ASNP National Director Kevin Urbatsch said simply, “This is huge.”
Below is the relevant section of POMS Transmittal No. 64, 10/22/2020, section E(2)
Exception for transfers to a secondary trust upon early termination
An early termination provision in a Section 1917(d)(4)(A) special needs trust or Section 1917(d)(4)(C) pooled trust does not need to meet the above criteria if the provision allows solely for a transfer of the beneficiary’s assets to a secondary Section 1917(d)(4)(A) or Section 1917(d)(4)(C) trust of which the same individual is the beneficiary.
The early termination provision must contain specific limiting language that precludes the early termination from resulting in disbursements other than to the secondary Section 1917(d)(4)(A) or Section 1917(d)(4)(C) trust or to pay for the administrative expenses listed in SI 01120.199E.3 in this section and in SI 01120.201F.4.
Click here to read the entire POMS transmittal.