I have a client who is a disabled child who was awarded funds at birth from a lawsuit. In order to maintain medicaid they have been instructed to transfer all assets to a special needs trust. One of the assets is an annuity where 500,000 was originally invested and has grown to 770,000.
My question is when the annuity goes from being owned by the child and instead is owned by the special needs trust, will that cause a taxable event. Please note that the beneficiary of the annuity remains the same just the owner is changing from the child to the child's special needs trust.
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Orest Baransky BA
Orest P Baransky CPA PC
Commack NY
631-499-6167
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