What is a Qualified Disability Trust?

The legal authority to create a Qualified Disability Trust (QDisT) falls under §642(b)(2)(C) of the Internal Revenue Code. To qualify as a QDisT, the trust must meet the following criteria:

According to a report published by the U.S. Department of Health and Human Services’ Administration on Aging, nearly 17 percent of the population is comprised of Americans ages 65 and over. The number of older Americans drastically increased in just ten years, rising 36 percent from 39.6 million in 2009, to 54.1 million in 2019.

"Per stirpes," "by representation," and "per capita at each generation" are all descriptors that tell the reader how to allocate a gift among a person's descendants. They are not shorthand for contingent beneficiary provisions. (While this discussion applies to all three, I will use per stirpes for the rest of this blog.)