How It Works
IRC is the Trustee of all of the trusts in Master Trust. Each trust established with Master Trust is a separate individual trust with its own tax identification number. The assets held in each trust can only be used for the special needs of the named beneficiary of that trust. Federal and State Fiduciary Tax Returns are filed annually and each trust is subject to taxes according to its earnings and expenses. Most of the assets held in each individual trust are pooled together for investment and management purposes.
Master Trust uses a standard Master Trust Agreement, in most cases, for all of the trusts. The Joinder Agreement, which is filled out by prospective Trustors, contains all of the personal information for the trust, such as the names of the Trustor and the Beneficiary, how distributions are to be made, and who will receive the balance of the trust's assets upon death of the beneficiary or other termination of the trust. In some cases, Master Trust will agree to act as Trustee of trusts drafted by others as long as the trust agreement meets all the qualifications to be a SNT.
Master Trust is managed by the Trust Committee. Members of the Trust Committee are familiar with the operations of regional centers, are knowledgeable about other public and private programs available to people with developmental disabilities, have experience working with people with developmental disabilities, are aware of their special needs, and are aware of what distributions can be made without jeopardizing the beneficiary’s eligibility for public benefits. Their expertise helps ensure that the beneficiary will receive the maximum benefits allowed under the law while preserving their trust funds for their special needs that are not covered by other programs.
The Trust Committee meets monthly to review and consider new trusts, to discuss and decide on disbursement requests, and to review the performance of the investment portfolio of the Master Trust Pooled Investment Fund and other assets held in trust.
When making disbursements from a trust, the Trust Committee considers a variety of factors, such as:
- Appropriateness of the requested item for the Beneficiary
- Other funding sources which could pay for the request
- Any disbursement restrictions on the trust
- Current principal balance in the trust
- Future trust income
- Future needs of the Beneficiary
- Current age and life expectancy of the Beneficiary
The Trust Committee sets, and periodically reviews, the Investment Policy for the Pooled Investment Fund. The primary investment goal of Master Trust is to minimize the risk of loss of principal while achieving modest growth. Consequently, the rate of return on trust funds will be the prevailing rate available on investments with low risk.
Master Trust is audited annually by an independent Certified Public Accountant.
Annual financial statements are provided to each Trustor and Beneficiary. These financial statements include a report of the activity for the trust, a report on the Pooled Investment Fund, and a copy of the most recent audited financial statement. For those trusts that are court supervised, Master Trust files a petition with the court for approval of the transactions and other activity during the accounting period on an annual basis or for such other term as may be ordered by the court.
Distributions upon the death of the beneficiary or other termination of the trust are designated by the Trustor on the Joinder Agreement and may be subject to liens by Federal, State, or local government agencies in accordance with applicable laws.