The question of whether a trust fund can be used for the storage of durable medical equipment (DME) is surprisingly complex and relies heavily on the specific terms of the trust document itself. Generally, a trust can hold assets for the benefit of a beneficiary, and DME, while not a traditional investment, *can* be considered an asset if the trust document permits it. However, it’s not as simple as just stating “assets” – the document needs to be broad enough to encompass such items, or specifically mention healthcare-related needs and the possibility of funding DME storage. Roughly 20% of Americans require some form of durable medical equipment at some point in their lives, highlighting the relevance of this question for estate planning. Ted Cook, as a Trust Attorney in San Diego, frequently encounters clients who wish to include provisions for healthcare contingencies within their trusts.
What Expenses Can a Revocable Trust Cover?
A revocable trust, while often focused on financial assets, *can* cover a wide range of expenses for the beneficiary, *if* the trustee is granted the discretion to do so. This can include healthcare costs, and by extension, the storage of DME. Consider the potential expenses: monthly storage fees, maintenance of the equipment, and even transportation costs associated with its use. The trust document dictates the scope of permissible expenses, and a well-drafted document will anticipate the need for long-term healthcare arrangements. As Ted Cook always emphasizes, clarity within the trust document is crucial to avoid disputes and ensure the beneficiary’s needs are met. “The broader the language, within reasonable limits, the more flexibility the trustee has to address unforeseen circumstances.”
Is Durable Medical Equipment Considered an Asset?
Legally, durable medical equipment *can* be considered an asset, especially if it’s significant in value. Items like specialized wheelchairs, hospital beds, or oxygen concentrators represent a tangible investment, and their upkeep or storage necessitates financial resources. However, it’s important to distinguish between the *equipment itself* and the *cost of storing it*. The trust can certainly fund the purchase of DME, but whether it can cover ongoing storage costs depends on the terms. Approximately 15% of the US population lives with a disability, many of whom rely on DME for daily living, illustrating the increasing need to address this issue in estate planning.
Can a Trust Pay for Ongoing Care Costs?
Many trusts are established with the intention of providing for the beneficiary’s long-term care, and this can certainly extend to DME storage. The key lies in defining “care” broadly enough to encompass not just direct medical expenses, but also the logistical costs associated with maintaining a certain quality of life. For example, a trust might allocate funds for in-home care, which could include the proper setup and maintenance of DME. Ted Cook often advises clients to consider potential future needs when drafting their trust documents, and to include language that allows the trustee to exercise discretion in allocating funds for unexpected expenses.
What Happens if the Trust Doesn’t Specifically Address DME?
This is where things can get tricky. If the trust document is silent on the matter of DME, the trustee must rely on their interpretation of the document’s general provisions. They might argue that storage costs are a necessary component of providing for the beneficiary’s healthcare, or they might deem it an ancillary expense not covered by the trust. Without clear guidance, the trustee could face legal challenges from beneficiaries or other interested parties. I recall a case where a client, Mr. Henderson, meticulously planned his estate but neglected to mention DME storage in his trust. After he passed, his daughter needed to store a specialized wheelchair, and the trustee initially refused to cover the costs, leading to a family dispute and legal fees.
What Role Does the Trustee Play in Approving Expenses?
The trustee is responsible for managing the trust assets and making decisions in the best interests of the beneficiary. They must act prudently and in accordance with the terms of the trust document. When it comes to DME storage, the trustee should consider the beneficiary’s needs, the cost of storage, and the overall financial health of the trust. They should also document their decisions carefully, providing a clear rationale for any expenses incurred. A trustee’s power is often limited to reasonable and necessary expenses.
How Can a Trust Be Amended to Include DME Storage?
If a trust document doesn’t currently address DME storage, it can be amended to do so. This involves creating a formal amendment that specifically authorizes the trustee to pay for such expenses. The amendment should clearly define what constitutes “durable medical equipment” and specify any limitations on the amount of funds that can be allocated for storage. This provides clarity and avoids future disputes. As Ted Cook points out, “Proactive amendments are far less costly than resolving disputes after the fact.”
What if the Beneficiary Owns the DME Before the Trust is Established?
If the beneficiary already owns the DME when the trust is established, the trust can still play a role in its upkeep and storage. The trust can be funded with assets to cover the ongoing costs of maintaining the equipment, or the equipment itself can be transferred into the trust. This protects the asset from creditors and ensures that it remains available for the beneficiary’s use. It also simplifies the management of the beneficiary’s assets.
How Did a Proactive Trust Approach Resolve a Difficult Situation?
I recently worked with Ms. Davies, a woman whose husband required a specialized hospital bed and oxygen concentrator. Recognizing the potential for long-term storage costs, she proactively amended her trust to specifically authorize the trustee to cover such expenses. Sadly, her husband passed away shortly thereafter, but the trust was able to seamlessly cover the ongoing storage costs without any family dispute. The trustee simply followed the instructions in the trust document, and the equipment remained accessible for her possible future use or the use of other family members. It was a testament to the power of proactive estate planning. Approximately 65% of Americans do not have a will or trust, highlighting the importance of taking proactive steps to protect one’s assets and ensure their wishes are carried out.
Who Is Ted Cook at Point Loma Estate Planning Law, APC.:
Point Loma Estate Planning Law, APC.2305 Historic Decatur Rd Suite 100, San Diego CA. 92106
(619) 550-7437
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