Food stamp eligibility saved; trust payments not “income”

In a recent decision by the New Hampshire Supreme Court, the Court ruled that trust payments to third party vendors were not countable as “income” to the trust beneficiary for purposes of determining her eligibility for food stamps. Petition of Kelly Hagenbuch.

The federal food stamp program (called SNAP in New Jersey) is available to individuals who meet certain income and asset limits. Kelly Hagenbuch was a recipient of food stamps in New Hampshire. She was also the beneficiary of an irrevocable trust that had been established for her sole benefit. Kelly had no right, title or power over the distributions, and could not compel a distribution under any circumstances. The Trustee made payments from the trust to various third parties for such things as administration expenses and taxes. These payments were considered to be payments to third party vendors, which are normally excluded from “income” under the program’s rules. In reviewing the trust, the agency determined that the trust’s distributions should be treated as “income” to Kelly, and terminated her benefits, as the income would disqualify her from receipt of benefits. Kelly sought court review.  The New Hampshire Supreme Court held that these vendor payments did not count as her income because the trust funds were not “owed to” her — in other words, that she had no right to compel the payments. Petition of Kelly Hagenbuch.

Call us to review your existing trusts and advise you on eligibility for benefits programs … 732-382-6070

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2 thoughts on “Food stamp eligibility saved; trust payments not “income”

  1. Hi Linda
    Can you help us – My mother is 93 she is getting food stamps now for a few years – NJSLMB sent us a letter because she had to recertify for food stamps – They are now asking about her funeral Trust – Originally – I think my mother thought it was an irrevocable trust (we did too) – I don’t know where her original paperwork is that she used to qualify for food stamps – but now I found paperwork that the Funeral Trust account she has is a Revocable account worth now $6,500.00 (Originally bought in 2006 for $3,000.00) – will NJSLMB disqualify her for food stamps or even worse fine her because she made this mistake – and has this money. My mom recently suffered a heart attack is now hospitalized and going into a rehab (hopefully)
    – I don’t know what to do – my mother really has no other money to speak of – only income is SS which is $794.00 per month. and we children help my mother with her bills at about $150.00 per month- I am afraid if I tell them now it is a Revocable Trust they will fine or worse sue her. What can we do
    I have tried to find out the rules about this but they are so vague- I have tried to get someone on the phone but it is impossible with waiting time up to a few hrs – please help – we want to keep this money in the Funeral Trust for her
    thank you – appreciate any advice

  2. Hi,

    We recommend that you contact an attorney for specific advice in your case. You can reach our office at 732 382 6070.

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