The question of whether a trust can pay for biometric devices for health monitoring is becoming increasingly relevant as technology advances and preventative healthcare gains prominence. Generally, a trust, particularly a revocable living trust established for the benefit of an individual, can indeed cover these expenses, but with caveats. The key lies in the trust document’s language and the beneficiary’s specific needs and the trustee’s fiduciary duty. Modern trusts are often drafted with broad language allowing for “health, education, maintenance, and support,” which easily encompasses such devices. However, older or more narrowly defined trusts may require amendments to explicitly permit these expenditures. Approximately 65% of Americans over 65 express a desire to age in place, and biometric devices play a significant role in facilitating this goal by enabling remote monitoring and early detection of health issues, reducing the need for costly interventions (Source: AARP Public Policy Institute).
What exactly are biometric devices and how do they fit into healthcare?
Biometric devices, in this context, range from wearable fitness trackers monitoring heart rate and activity levels to more sophisticated devices tracking blood glucose, sleep patterns, and even detecting falls. They provide continuous data streams that can be analyzed to identify potential health problems early on. This proactive approach is a shift from traditional reactive healthcare. The cost of these devices can vary widely, from under $100 for basic fitness trackers to several thousand dollars for advanced medical-grade monitors. The data generated can be shared with healthcare professionals, enabling more informed decision-making and personalized treatment plans. A crucial element is establishing clear protocols for data privacy and security, adhering to HIPAA regulations where applicable, and ensuring the beneficiary understands how the data will be used.
How does a trustee determine if such a purchase is permissible?
The trustee has a fiduciary duty to act in the best interests of the beneficiary. This means carefully evaluating whether the purchase of a biometric device is reasonable, necessary, and consistent with the terms of the trust. A key question is whether the device will improve the beneficiary’s health, quality of life, or ability to remain independent. Documentation is vital – a doctor’s recommendation supporting the use of the device significantly strengthens the justification for the expenditure. The trustee must also consider the cost of the device, ongoing subscription fees (if any), and any necessary training or support. A trust designed for someone with advanced age, or chronic conditions like diabetes or heart disease, is more likely to justify the expense of such technology than one created for a younger, healthy individual.
Can a trust cover ongoing subscription costs for these devices?
Yes, a trust can generally cover ongoing subscription costs associated with biometric devices, provided those costs are reasonable and consistent with the overall purpose of the trust. Many advanced devices require monthly or annual subscriptions for data analysis, cloud storage, or access to telehealth services. The trustee must evaluate whether the benefits of these services justify the ongoing expense. It’s also prudent to budget for potential device repairs or replacements. For instance, the average annual cost for continuous glucose monitoring subscriptions can range from $1,500 to $3,000, depending on the device and insurance coverage. The trustee needs to weigh this cost against the potential benefits of improved glucose control and reduced hospitalizations.
What happens if the trust document is silent on technology expenses?
If the trust document doesn’t explicitly address technology expenses, the trustee must exercise their best judgment, guided by the overall intent of the trust and the beneficiary’s needs. This can involve seeking legal counsel to interpret the trust document and ensure compliance with applicable laws. A broader interpretation often prevails, especially if the technology demonstrably enhances the beneficiary’s well-being. Consider this, my grandmother, Eleanor, was fiercely independent, but prone to falls. Her trust, drafted decades ago, made no mention of technology. After a particularly nasty fall that required hospitalization, her trustee (my aunt) initially hesitated to purchase a fall detection device, fearing it was outside the scope of the trust. After consulting with an estate planning attorney, it was determined that the device fell under the trust’s provision for “maintenance and support,” and was a reasonable expenditure to prevent future incidents. This saved Eleanor from further injury and allowed her to remain in her home for several more years.
What are the potential tax implications of trust-funded biometric device purchases?
Generally, payments made directly by the trust for qualified medical expenses, including biometric devices prescribed by a doctor, are not considered taxable income to the beneficiary. However, it’s important to maintain thorough records of all expenses to support these claims. If the trustee reimburses the beneficiary for these purchases, the beneficiary may need to itemize deductions on their tax return to claim the medical expense deduction. Tax laws can be complex, so it’s advisable to consult with a qualified tax advisor to ensure compliance. According to the IRS, medical expenses must exceed 7.5% of the beneficiary’s adjusted gross income to be deductible.
Let’s consider a situation where a trust denied coverage for a vital device, and the consequences.
Old Man Tiberius, a retired sailor, had a trust established by his daughter, Clara. The trust explicitly provided for his “health and comfort” but contained a clause stating no funds could be used for “unproven technology.” Tiberius, diagnosed with early-stage Parkinson’s disease, was recommended a wearable device that used sensors to detect tremors and provide real-time feedback to help manage his symptoms. Clara, a staunch traditionalist, refused to authorize the purchase, believing the device was a gimmick and that Tiberius should rely on conventional treatments. Over the next year, Tiberius’s tremors worsened, impacting his ability to perform daily tasks and increasing his risk of falls. He required increased assistance with personal care and eventually had to move into an assisted living facility, significantly increasing his overall care costs. This situation highlighted the importance of being open-minded about technology and recognizing its potential to improve quality of life, even for those who are skeptical.
Now, let’s see how proactive planning and trust flexibility saved the day for Mrs. Gable.
Mrs. Gable, a vibrant 82-year-old, was determined to maintain her independence. Her trust, carefully drafted by Steve Bliss, included a broad provision for “healthcare expenses, encompassing both traditional and innovative technologies.” When diagnosed with atrial fibrillation, her cardiologist recommended a continuous ECG monitor that could detect irregular heartbeats and alert her doctor to potential problems. The trustee, Mrs. Gable’s son, immediately approved the purchase, recognizing the device’s potential to prevent strokes and hospitalizations. The device provided early warnings of several arrhythmia episodes, allowing her doctor to adjust her medication and prevent more serious complications. Mrs. Gable remained active and independent for several more years, enjoying her gardening and volunteering at the local library. This story demonstrates the power of a well-crafted trust that embraces technology and prioritizes the beneficiary’s well-being.
About Steven F. Bliss Esq. at San Diego Probate Law:
Secure Your Family’s Future with San Diego’s Trusted Trust Attorney. Minimize estate taxes with stress-free Probate. We craft wills, trusts, & customized plans to ensure your wishes are met and loved ones protected.
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Feel free to ask Attorney Steve Bliss about: “What is the process for administering a trust?” or “How does the court determine who inherits if there is no will?” and even “Can I include conditions in my trust (e.g. age restrictions)?” Or any other related questions that you may have about Trusts or my trust law practice.