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Community Trust I

Community Trust I is a “third-party” trust; that is, the funds are contributed by a parent, grandparent, relative or friend for the use of a person with a disability.

The beneficiary may access the funds while remaining eligible for government benefits, so long as the funds are not used for food, shelter or medical expenses covered by Medicaid.

At the end of the beneficiary’s lifetime, any funds remaining in his or her trust sub-account go to the AHRC New York City Foundation to further its mission.

There are no fees for establishing a Community Trust I account, and no trustee fees are charged. There is an administrative fee of 1 percent of the balance in each sub-account on December 31st of each year. Wilmington Trust, which is the custodian and investment manager of the trust, charges fees amounting to approximately 1 percent annually. There are also small charges for insurance and tax preparation.

A trust sub-account may be established with a minimum of $10,000, or a sub-account may be the beneficiary of a life insurance policy or will.


FAQ

Questions and Answers about the AHRC New York City Foundation Community Trust I for Persons with Disabilities:

What is the AHRC New York City Foundation Community Trust I for Persons with Disabilities?

The AHRC NYC Foundation Community Trust allows you to provide financial resources for a loved one who has a developmental disability, without affecting that person’s eligibility for government benefits. A parent, relative or any other person may establish an account within the Trust and designate a disabled loved one as beneficiary. Income and principal in that account are available to the beneficiary for expenditures not covered by government benefits.

What types of expenditures may be made with funds from the Trust?

Funds from the trust may be used for your loved one’s care, comfort, welfare, education or training, so long as these expenditures are over and above benefits provided by government sources. Examples include a vacation, computer, special medical equipment, or clothing.

How will my loved one access these funds?

Your loved one’s parent, guardian or advocate will request a disbursement from the Trust for a particular purpose. The Trustees are legally bound to act in the best interest of your loved one and to ensure that disbursements from the Trust do not affect your loved one’s government entitlements.

Who are the Trustees of the AHRC New York City Foundation Community Trust for Persons with Disabilities?

The five current Trustees include the Chairman of the AHRC New York City Foundation Board and four Foundation Board members.

How are the funds in the AHRC Foundation Community Trust invested?

The funds are invested at Wilmington Trust in accordance with the Community Trust’s investment policy, which is established by the Trustees.

What happens to funds remaining in the account at the end of my loved one’s lifetime?

When a beneficiary dies, funds remaining in his or her account are withdrawn from the Trust and given to the AHRC New York City Foundation to benefit programs and services for children and adults who have developmental disabilities.

Will I receive a tax deduction when I establish an account in the AHRC Foundation Community Trust?

No. Because the funds are for the benefit of a particular individual with developmental disabilities, a distribution to the AHRC Foundation Community Trust does not constitute a charitable contribution for tax purposes. If you wish to make a tax-deductible gift to the AHRC New York City Foundation, there are other options available, and you may contact the Foundation for more information.

How do I establish an account within the AHRC Foundation Community Trust?

Please email snt@ahrcnyc.org. You will be provided with a sponsor agreement, which allows you to establish a trust account by making an initial contribution of at least $10,000. Your contribution may be in cash, or it may be in the form of securities, annuities or life insurance policies.

May I add to the account in the future?

Yes, you may add to the account at any time and in any amount.

Should I contribute to the AHRC Foundation Community Trust, or should I establish my own special needs trust for a loved one?

This decision depends upon your particular circumstances and should be made in consultation with your legal and financial advisers. Many families trust the AHRC New York City Foundation and find that the Foundation’s Community Trust meets their needs and is convenient and cost-effective. Many financial institutions have minimum financial requirements to establish a trust, usually at least $100,000. The AHRC Foundation Community Trust can accommodate families that wish to contribute $10,000 or more.

Also, many families do not have an individual to designate as trustee to carry out the fiduciary responsibilities associated with a trust.

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