Case: A Special Needs Trust (SNT) exists that is irrevocable. The trust is it's own entity and it has it's own TIN #. The trust exists to someday provide money for a disabled person who is the beneficiary of the trust for things that social security money does not provide; i.e. a handicap van for transportation. The SNT holds title to a Variable Live Insurance (VUL) policy. The VUL premiums are funded by 2 sources:
1. Tax free money (no 1099 is sent or received) that is given by the State to be used for the purposes of the disabled person ($200 mth) and
2. Gift money by friends and family for special occasionslikebirthdays (approx $200 a yr).
The above-desc money is deposited in an interest free checking account where it sits until it is automatically withdrawn monthly by the VUL