Community Fund cannot provide tax advice, but you will receive tax-related documents from Community Fund and our Trustee as follows: First, before distributing the remaining trust funds to any individuals or charities named in the Joinder Agreement, Community Fund will send a blank W-9 form to each individual or charity. Please complete and sign the form and return it to Community Fund’s Administrative Office as promptly as possible. This is required for tax purposes, and we cannot distribute any funds until all signed W-9 forms have been submitted. Second, after the distribution checks are issued, you can expect to receive a K-1 tax document for the year in which the distribution was made. All tax documents are expected to be generated and mailed by March 15 for the prior calendar year, so you should receive the tax document by March 31. However, the timing of tax documents may differ for remainder distributions issued during the first 65 days of a calendar year (January 1 – March 6). At the discretion of our Trustee, those distributions may be treated as if made during the prior calendar year for tax purposes. This means that you could receive both a distribution check and a tax document between January 1 and March 31 of the same year. After you receive your K-1 tax document, if you have questions about whether you owe any taxes, please contact a tax preparer or attorney for assistance. Community Fund cannot tell you how much is owed or provide any other tax advice.
Community Fund strongly recommends preneed funeral planning and submitting distribution requests before a Beneficiary’s death when possible. In certain circumstances, the trust may be able to pay for items after a Beneficiary’s death. However, this depends on the type of trust and may require approval from the State of Ohio and any other state in which the Beneficiary received Medicaid benefits. Only the Designated Advocate can request post-death distributions. The Designated Advocate should use our standard Distribution Request form and must submit all post-death distributions together in a single packet. We cannot accept multiple packets. Due to the state approval requirement, tax obligations, and other factors, the time frame for processing post-death distribution requests is typically longer than the time frame for processing traditional distribution requests during the Beneficiary’s lifetime.
It can take as little as 2 months or more than 6 months to distribute and close a trust. The time frame depends on the type of trust, the Joinder Agreement instructions, and other factors such as court supervision. Community Fund works actively on wrapping up all items and meeting its legal obligations to the state, the IRS or state taxing authority, and any remainder distributees. If the trust has a Medicaid payback obligation, the state’s final Medicaid claim may not be available until more than 5 months after the Beneficiary’s date of death. In addition, tax payments may need to be calculated and distributed before other distributions are made. Furthermore, Community Fund may be waiting on distribution requests, refund checks, W-9 forms, and approvals from various parties in order to process post-death distributions, returns of unused funds, and remainder distributions.
Yes, if the Beneficiary of an active trust dies, please notify our office immediately by phone and provide us with an original, certified death certificate as soon as possible. We require an original death certificate and cannot close the trust based on a copy. The death certificate should be mailed to our Administrative Office, Attn: Deceased Administration. If the sender requests, we will return the original death certificate to the sender once we are done processing it.
If the Beneficiary dies, Community Fund is legally required to distribute the remaining funds according to the instructions in the trust documents (Joinder Agreement) and then close the trust with a zero balance. Depending on the type of trust and the Joinder Agreement instructions, the trust may be required to pay the remainder to Medicaid or to designated individuals or charities, or the funds may be retained by Community Fund or one of its partner nonprofit organizations.