An official State of Texas website.
Revision 09-4; Effective December 1, 2009
Under both pre-DRA and post-DRA transfer of assets policies in determining whether an asset was transferred for the sole benefit of a spouse, child or disabled individual, there must be a written instrument of transfer, such as a trust document, that legally binds the parties to a specified course of action and clearly sets out the conditions under which the transfer was made, as well as who can benefit from the transfer. The instrument or document must provide for the spending of the funds for the benefit of the individual on a basis that is actuarially sound based on the life expectancy of the individual. When the instrument or document does not so provide, there can be no exemption from the penalty.
Note: Trusts created under exception trusts policy are exempt from the actuarially sound distribution provisions of this requirement.