Be Careful With (d)(4)(A) SNT Distributions

Federal Court Rules on Section 8 Eligibility

A Federal Court in Massachusetts recently ruled that a woman was ineligible for Section 8 housing assistance because she received over $60,000 worth of expenditures from her (d)(4)(A) Trust.

This is another example of where 1st Person SNTs walk a tight rope.  How much is too much?  I think that people have got to vigilant and aware of the rules when they use money from an SNT.  Trustees can’t just be handing out money left and right from these trusts without being cognizant of what the impact is going to be on their beneficiary. The very point of these trusts is to keep benefits, what good are they if the money is going to be blown anyway and the beneficiary loses their benefits.

On the other hand, what makes housing so special? Should HUD be counting trust distributions as income?  I know that they do, but should they?  Should 1st and 3rd Person SNTs be treated the same by HUD or should 1st Persons be exempt?  Personally and professionally, I think counting distributions from a 1st Person SNT is a bad rule.  The point of the law is to protect benefits, so let’s protect benefits, housing included.