Did I receive cash if it went into a trust account?

Full question:

if cash money is paid into escrow from a settlement , instructions being to wire the money at my direction, and I direct the cash into an irrevocable trust account,, did I 'receive cash' ? This is not a tax issue..It has to do with a benefit i receive from an agency that defines income as cash only. Did I actually receive the cash though it was continuously in the escrow account till it was wired to the irrevocable trust at my direction?

• Category: Trusts
• Date: 04/07/2025
• State: Washington

Answer:

If you are receiving a government benefit based on income, the answer depends on the nature of the settlement. If the settlement was not related to physical injury, the government may consider it as income for eligibility purposes. Generally, to avoid counting these funds as income, a special type of trust, like a special needs trust or Medicaid income trust, should be established.

The agency involved also matters. For Medicaid benefits, there is a five-year look-back period to review asset transfers. This means that if you transferred assets for less than fair market value, it could affect your eligibility for Medicaid. Medicaid requires that applicants lack assets to qualify for assistance, and they will investigate any asset transfers made during the look-back period.

Furthermore, if a transfer is made with the intent to avoid claims or eligibility requirements, it could be deemed a fraudulent conveyance. The Uniform Fraudulent Transfer Act defines such transfers as those made with the intent to hinder, delay, or defraud creditors, or those made without receiving equivalent value in return.

In summary, whether you 'received cash' may depend on the timing and nature of the transfer into the irrevocable trust, as well as the specific agency's definitions and regulations regarding income.