Eligibility Online Manual

M805 Determining Treatment of Resources Within Trusts

Purpose:  This section will assist in determining how to treat resources within trusts.


Current Policy Effective Date:  November 1, 2015

Date Last Reviewed:  September 18, 2015

Previous Policy:  July 1, 2007

POL M805:  DETERMINING TREATMENT OF RESOURCES WITHIN TRUSTS 

1.    Trusts Established by Client or Others May Be Considered Client Established

The client will be considered to have established a trust if any of the individuals listed below established a trust using the client’s resources:

2.    Trust Establishment Purpose May Be Irrelevant

The purpose for which a trust is established is irrelevant except in the case of a trust established in any of the following circumstances:

3.    Revocable Trusts and Payments Are Considered Assets or Income

The entire amount of the trust must be considered as an available resource.

Any payments from the trust to or for the client must be counted as income.

Payments from the trust for any other purpose must be considered an uncompensated transfer of resources.

4.    Irrevocable Trusts and Payments Are Considered Assets or Income

Any possible distributions to or for the client must be considered countable resources

Payments from the trust to or for the client must be considered countable income.

Payments from the trust for any other purpose must be considered an uncompensated transfer of resources.

If a trust was established during the 60-month look-back period, any part of the trust that cannot be paid out under any circumstance must be considered an uncompensated transfer of resources.

If any part of the trust is available until a specific date or event occurs, the date the trust becomes unavailable must be considered as the date of the uncompensated transfer for consideration of the 60-month look-back period.

5.    Resources Are Not Counted When State Is Residual Beneficiary

Resources must not be counted and transfer penalties must not be developed for trusts where the State is named the residual beneficiary. This means the State is entitled up to the amount of medical expenditures made on behalf of the individual.

6.    Trusts for Disabled Individuals May Be Special Needs Trusts

A trust for a disabled individual must meet both the following criteria to be considered a special needs trust:

7.    Pooled Trusts May Be Special Needs Trusts

A pooled trust must meet all of the following criteria to be considered a special needs trust:

8.    Income Trusts (Miller Trusts) May Be Special Needs Trusts

An Income Trust (Miller Trust) must meet all of the following criteria to be considered a special needs trust:

Reference:

Defining Requirement:  20 CFR 416, Subpart L

                                  42 CFR 435, Subpart G

Clarifying Information:

The Omnibus Reconciliation Act (OBRA) of 1993 Changed How Assets in Trusts Affect Eligibility.

Worker Responsibilities:

Approving Income Trusts (Miller Trusts)

1. Compare established trust to model in the Miller Trust form.

2. Forward trusts not according to model to WDH for approval.

3. Approve if trust set up according to model.

4. Distribute copy of model trust upon request.

5. Mail copy of approved trust to WDH along with verification showing bank account has been established and power of attorney.