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What Expenses are Not Allowable?

Trusts are set up to cover the expenses of goods and services that are supplemental to the beneficiary’s basic needs (food and shelter). This means that the trust cannot be used for food or shelter costs or the trust may count as a resource to the beneficiary, which can affect eligibility for government benefits like SSI or Medicaid. Disbursements made for basic needs, or directly to the beneficiary, are countable unearned income for SSI and Medicaid eligibility and can reduce or eliminate these benefits. As a trustee, Life Plan Trust must use discretion in making distributions, keeping the beneficiary’s eligibility for government benefits and needs-based financial aid in mind.

 

Examples of prohibited expenses: *Note* The trust is unable to pay for the expenses listed below. The following listed expenses should be paid with monies received through the beneficiary’s monthly SSI income or Social Security income.

  • Cash given directly to the beneficiary for any purpose.Food or groceries
  • Restaurant meals
  • Rent or mortgage payments, cost of group home care.
  • Property taxes
  • Homeowners or condo association dues
  • Homeowners insurance if the insurance is a mortgage requirement.
  • Utilities such as electricity, gas, and water
  • Utilities hookup or connection charges
  • Heating, oil, or propane