Medicaid Trust

[Jesse]

My friend's Dad created an Irrevocable Income-Only Medicaid Trust.

Written into the trust is a Provision for Income Taxes:

Any income tax due shall be reported to all the Ultimate Beneficiaries according to their respective interests, with contribution expected from each. Any amount not timely contributed shall be withdrawn from the ultimate distribution to the non-contributing Beneficiary, with 12% annual simple interest.


This trust has been in place for several years and it appears that nothing has ever been filed. Shouldn't the trust have filed it's own tax return and issued K-1's with the income reported to each of the beneficiaries in each of these years?

There are five siblings = beneficiaries. The trustee is one of the siblings who worked w/ the lawyer and he "thought the lawyer was taking care of everything". Where does a person start? Are there other questions should I be asking?

[Jesse]

This trust has been in place for several years and it appears that nothing has ever been filed. Shouldn't the trust have filed it's own tax return and issued K-1's with the income reported to each of the beneficiaries in each of these years?

Anyone have any thoughts on this portion of my post?

[newbie]

Unless there are special rules because it is a Medicaid Trust, if the trust had income of $600 or more you must file a tax return for the trust. If it's under $600 there is no requirement to file.