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Program |
Manual Section |
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ALTCS |
When a trust contains income or resources of the customer, the customer's spouse or both, as well as income or resources of other people, the customer’s ownership percentage is determined as follows:
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Step |
Action |
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1 |
Determine the equity value of all of the income or resources assigned to the trust as of the date they were added. |
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2 |
Determine who owned the resources or income before they were added to the trust. |
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3 |
Total the equity values, as of the date added to the trust, of all income or resources owned by the customer or the customer’s spouse before being added to the trust. |
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4 |
Calculate the customer’s ownership percentage by dividing the total from Step 3 by the total from Step 1. |
Example:
The customer created a trust on 8/31/2003. The resources used to form the trust corpus were $2,000 that belonged to the customer, $1,000 that belonged to the customer's spouse, and $1,000 that belonged to the customer's brother. The total value of the trust corpus is $4,000. The portion of the trust corpus contributed by the customer and spouse is $3,000.
The value of the resources added by the customer and spouse is $3,000. $3,000 divided by $4,000 = 0.75. The customer’s ownership percentage in the trust is 75%. Once the ownership percentage is determined, it remains the same unless the applicant can show that the ownership interest has changed.