The department determines how trusts affect eligibility for medical programs.
The department disregards trusts established, on or before April 6, 1986, for the sole benefit of a client who lives in an intermediate care facility for the mentally retarded (ICMR).
For trusts established on or before August 10, 1993 the department counts the following:
If the trust was established by the client, client's spouse, or the legal guardian, the maximum amount of money (payments) allowed to be distributed under the terms of the trust is considered available income to the client if all of the following conditions apply:
The client could be the beneficiary of all or part of the payments from the trust;
The distribution of payments is determined by one or more of the trustees; and
The trustees are allowed discretion in distributing payments to the client.
If an irrevocable trust doesn't meet the conditions under subsection (3)(a) then it is considered either:
An unavailable resource, if the client established the trust for a beneficiary other than the client or the client's spouse; or
An available resource in the amount of the trust's assets that:
The client could access; or
The trustee distributes as actual payments to the client and the department applies the transfer of assets rules of WAC 388-513-1363, 388-513-1364 or 388-513-1365.
If a revocable trust doesn't meet the description under subsection (3)(a):
The full amount of the trust is an available resource of the client if the trust was established by:
(A) The client;
(B) The client's spouse, and the client lived with the spouse; or
(C) A person other than the client or the client's spouse only to the extent the client had access to the assets of the trust.
Only the amount of money actually paid to the client from the trust is an available resource when the trust was established by:
The client's spouse, and the client did not live with the spouse; or
A person other than the client or the client's spouse; and
Payments were distributed by a trustee of the trust.
The department considers the funds a resource, not income.
For trusts established on or after August 11, 1993:
The department considers a trust as if it were established by the client when:
The assets of the trust, as defined under WAC 388-470-0005, are at least partially from the client;
The trust is not established by will; and
The trust was established by:
The client or the client's spouse;
A person, including a court or administrative body, with legal authority to act in place of, or on behalf of, the client or the client's spouse; or
A person, including a court or administrative body, acting at the direction of or upon the request of the client or the client's spouse.
Only the assets contributed to the trust by the client are available to the client when part of the trust assets were contributed by any other person.
The department does not consider:
(i) The purpose for establishing a trust;
(ii) Whether the trustees have, or exercise, any discretion under the terms of the trust;
(iii) Restrictions on when or whether distributions may be made from the trust; or
(iv) Restrictions on the use of distributions from the trust.
For a revocable trust established as described under subsection (4)(a) of this section:
The full amount of the trust is an available resource of the client;
Payments from the trust to or for the benefit of the client are income of the client; and
Any payments from the trust, other than payments described under subsection (4)(d)(ii), are considered a transfer of client assets.
For an irrevocable trust established as described under subsection (4)(a) of this section:
Any part of the trust from which payment can be made to or for the benefit of the client is an available resource. When payment is made from such irrevocable trusts, we will consider the payments as:
Income to the client when payment is to or for the client's benefit; or
The transfer of an asset when payment is made to any person for any purpose other than the client's benefit;
A trust from which a payment cannot be made to or for the client's benefit is a transfer of assets. For such a trust, the transfer of assets is effective the date:
The trust is established; or
The client is prevented from receiving benefit, if this is after the trust is established.
The value of the trust includes any payments made from the trust after the effective date of the transfer.
For trusts established on or after August 1, 2003:
The department considers a trust as if it were established by the client when:
The assets of the trust, as defined under WAC 388-470-0005, are at least partially from the client or the client's spouse;
The trust is not established by will; and
The trust was established by:
The client or the client's spouse;
A person, including a court or administrative body, with legal authority to act in place of, or on behalf of, the client or the client's spouse; or
A person, including a court or administrative body, acting at the direction of or upon the request of the client or the client's spouse.
Only the assets contributed other than by will to the trust by either the client or the client's spouse are available to the client or the client's spouse when part of the trust assets were contributed by persons other than the client or the client's spouse.
The department does not consider:
The purpose for establishing a trust;
Whether the trustees have, or exercise, any discretion under the terms of the trust;
Restrictions on when or whether distributions may be made from the trust; or
Restrictions on the use of the distributions from the trust.
For a revocable trust established as described under subsection (5)(a) of this section:
The full amount of the trust is an available resource of the client;
Payments from the trust to or for the benefit of the client are income of the client; and
Any payments from the trust, other than payments described under subsection (5)(d)(ii), are considered a transfer of client assets.
For an irrevocable trust established as described under subsection (5)(a) of this section:
Any part of the trust from which payment can be made to or for the benefit of the client or the client's spouse is an available resource. When payment is made from such irrevocable trusts, the department will consider the payment as:
Income to the client or the client's spouse when payment is to or for the benefit of either the client or the client's spouse; or
The transfer of an asset when payment is made to any person for any purpose other than the benefit of the client or the client's spouse;
A trust from which a payment cannot be made to or for the benefit of the client or client's spouse is a transfer of assets. For such a trust, the transfer of assets is effective the date:
The trust is established; or
The client or client's spouse is prevented from receiving benefit, if this is after the trust is established.
The value of the trust includes any payments made from the trust after the effective date of the transfer.
Trusts established on or after August 11, 1993 are not considered available resources if they contain the assets of either:
A person sixty-four years of age or younger who is disabled as defined by SSI criteria (as described in WAC 388-475-0050) and the trust:
Is established for the sole benefit of this person by their parent, grandparent, legal guardian, or a court; and
Stipulates that the state will receive all amounts remaining in the trust upon the death of the client, up to the amount of Medicaid spent on the client's behalf; or
A person regardless of age, who is disabled as defined by SSI criteria (as described in WAC 388-475-0050), and the trust meets the following criteria:
It is irrevocable;
It is established and managed by a nonprofit association;
A separate account is maintained for each beneficiary of the trust but for purposes of investment and management of funds the trust pools the funds in these accounts;
Accounts in the trust are established solely for the benefit of the disabled individual as defined by the SSI program;
Accounts in the trust are established by:
The individual;
The individual's spouse, where the spouse is acting in the place of or on behalf of the individual;
The individual's parent, grandparent, legal guardian;
A person, including a court or administrative body, with legal authority to act in place of or on behalf of the individual or the individual's spouse; or
A person, including a court or administrative body, acting at the direction or upon the request of the individual or the individual's spouse.
It stipulates that either:
The state will receive all amounts remaining in the client's separate account upon the death of the client, up to the amount of Medicaid spent on the client's behalf; or
The funds will remain in the trust to benefit other disabled beneficiaries of the trust.
Trusts established on or after August 1, 2003 are not considered available resources if they contain the assets of either:
A person sixty-four years of age or younger who is disabled as defined by SSI criteria (as described in WAC 388-475-0050) and the trust:
Is irrevocable;
Is established for the sole benefit of this person by their parent, grandparent, legal guardian, or a court; and
Stipulates that the state will receive all amounts remaining in the trust upon the death of the client, the end of the disability, or the termination of the trust, whichever comes first, up to the amount of Medicaid spent on the client's behalf; or
A person regardless of age, who is disabled as defined by SSI criteria (as described in WAC 388-475-0050), and the trust meets the following criteria:
It is irrevocable;
It is established and managed by a nonprofit association;
A separate account is maintained for each beneficiary of the trust but for purposes of investment and management of funds the trust pools the funds in these accounts;
Accounts in the trust are established solely for the benefit of the disabled individual as defined by the SSI program;
Accounts in the trust are established by:
The individual;
The individual's spouse, where the spouse is acting in the place of or on behalf of the individual;
The individual's parent, grandparent, legal guardian;
A person, including a court or administrative body, with legal authority to act in place of or on behalf of the individual or the individual's spouse; or
A person, including a court or administrative body, acting at the direction or upon the request of the individual or the individual's spouse.
It stipulates that either:
The state will receive all amounts remaining in the client's separate account upon the death of the client, the end of the disability, or the termination of the trust, whichever comes first, up to the amount of Medicaid spent on the client's behalf; or
The funds will remain in the trust to benefit other disabled beneficiaries of the trust.
Trusts described in subsection (6)(a) and (7)(a) continue to be considered an unavailable resource even after the individual becomes age sixty-five. However, additional transfers made to the trust after the individual reaches age sixty-five would be considered an available resource and would be subject to a transfer penalty.
The department does not apply a penalty period to transfers into a trust described in subsections (6)(b) and (7)(b) if the trust is established for the benefit of a disabled individual under age sixty-five as described in WAC 388-513-1363 and 388-513-1364 and the transfer is made to the trust before the individual reaches age sixty-five.
The department considers any payment from a trust to the client to be unearned income. Except for trusts described in subsection (6), the department considers any payment to or for the benefit of either the client or client's spouse as described in subsections (4)(e) and (5)(e) to be unearned income.
The department will only count income received by the client from trusts and not the principal, if:
The beneficiary has no control over the trust; and
It was established with funds of someone other than the client, spouse or legally responsible person.
This section does not apply when a client establishes that undue hardship exists.
A trust is created through a legal instrument. When a trust is created, the ownership of an asset is transferred from a person or entity to the trust. The department includes in this definition any other legal instrument similar to a trust.
Once the trust is established and the assets are transferred into the trust, the original owner, or trustor (grantor), no longer has legal authority over those assets. The only person who has legal authority of the trust’s assets is the trustee.
A trust gives the trustee legal authority over assets placed into trust, but a trustee’s authority to use those assets is limited. A trustee cannot use the assets for their own benefit or for the benefit of some other entity; they can only use the assets to benefit another person named in the trust as the beneficiary.
There must be a separation between the person with legal authority to administer the assets (the trustee) and the person who benefits from use of the assets (the beneficiary). To be a valid trust for medical programs, the trustee cannot also be the beneficiary.
If a trust is set up so the trustee is also the beneficiary, the assets are free of the conditions of the trust. For our purposes, it is as if the trust does not exist. We would apply our regular resource and income rules to the assets within the trust to determine how to count them for eligibility purposes.
In considering distributions from trusts, remember that distributions do not need to be only in cash. For example, a distribution of 1/10th of a piece of property also has a value and must be considered. When you know the value of the entire piece of property, you can determine the value of the part that was distributed.
A trust may allow for reasonable costs to the trustee for management of the trust and/or investment of trust funds.
A trust can be established but funded at a later date. Use the subsection associated with the date the trust was established, not when it was funded.
Living Trusts
A “living trust” is a term used to describe a trust that is created and comes into force during the trustor’s (settlor’s, grantor’s) lifetime.
There is no special status given to assets placed into a living trust. Workers will need to read the trust and determine what rules in this WAC to apply, just as they would for any other trust.
Frequently, the term “living trust” is used to describe a trust in which the trustor receives benefit from the profits of the trust during their lifetime. Generally, this type of trust is used to avoid probate because the trustor transfers ownership of the assets into the trust and the assets are then owned by the trust.
Testamentary Trusts
A testamentary trust is one that is set up by a will and goes into effect when the trustor dies.
A client has no control over the establishment of a testamentary trust, so the department counts only the income received.
EXAMPLE
Uncle Joe died last week and left his estate of $50,000 in a testamentary trust to Billy. Billy finds out about this at the reading of the will. According to the trust set up by Uncle Joe, Billy will receive $500 per month until the funds are used up. The department will count only the $500 per month income that Billy receives. He does not control the $50,000 left to him in the trust.
However, assets that are willed to a client, but are not willed through a trust, and the client then uses them to establish a trust are considered to be a resource of the client. The client has control over the assets.
EXAMPLE
Uncle Joe died last week and left $50,000 to Billy. Billy puts the money into a trust so that he will not spend it all right away. The trust is managed by his bank and gives him $500 per month income. Billy had control of the $50,000 and chose to put it into a trust. We count the entire trust amount of $50,000 as an available resource.
Sole Benefit Trusts
Asset transfers into trusts for the “sole benefit” of an individual are described in the following
WAC 388-513-1363 (2) (f) for asset transfers on or after 5/1/06.
WAC 388-513-1365 (4) for asset transfers made between 3/1/97 and 3/31/03.
The establishment of a trust is considered to be for the sole benefit of a person, if the trust:
Is established by a legal document that makes the transfer irrevocable;
Provides that only the primary beneficiary may receive benefit from the trust during the primary beneficiary’s lifetime except “pooled trusts”; and
Provides that all trust assets must be spent during the primary beneficiary’s actuarial life expectancy based on the annuity tables found in the EA-Z Manual, Long Term Care Appendix 5, except a special needs trust or a pooled trust.
NOTE:
Special needs trusts and pooled trusts contain stipulations that DSHS can recover from the remaining assets up to the amount that was spent on Medicaid services. In addition, a pooled trust can have an alternate stipulation; it can state that the funds can remain in the trust to benefit the other trust beneficiaries.
While there can be many types of sole benefit trusts, the three types most often encountered are:
Sole benefit trust with the client’s spouse as the beneficiary;
Special needs trust, for disabled individuals under age 65; and
Pooled trust, for disabled individuals of any age.
Frequently, the term “sole benefit trust” is used to describe a trust established for the community spouse of an institutionalized client. Generally, the community spouse is not disabled or is over age 65. Frequently, community resources were used to establish the trust as a way to shelter assets in order for one of the spouses to qualify for Long Term Care assistance.
If the community spouse is disabled, a spousal sole benefit trust can meet the criteria for a special needs trust or a pooled trust. Carefully read the trust to determine which set of rules to use for the trust.
Special Needs Trusts
The department uses the term “special needs trust” to describe a type of sole benefit trust; however, that term is not found in WAC. This type of trust is established for disabled individuals who are under age 65. The rules about how to count special needs trusts are found in WAC 388-561-0100 (6)(a) and (7)(a).
The primary purpose of a special needs trust is to ensure funds are available to provide goods and services not covered by Medicaid for a disabled person such as medical treatment, equipment, or supplemental care. In addition, the trust may pay for the individual’s socialization activities such as outings and vacations.
A special needs trust established by the client does not meet the criteria in WAC 388-561-0100 (6)(a) or (7)(a). We will count the trust as an available resource unless it is set up as a pooled trust. A pooled trust must be managed by a non-profit association and contains a separate account for the client.
If assets are added to a special needs trust after the beneficiary turns age 65, those assets are considered available to the client. If the assets originally belonged to the client, it is an asset transfer and a penalty must be considered.
Unlike other sole benefit trusts, a special needs trust does not need to pay out within the beneficiary’s actuarial lifetime. This is because the trust contains language that states DSHS can recover Medicaid expenses out of the remaining assets when the client dies. For trusts established on or after 8/1/03, this provision has been expanded to include anytime the trust terminates, when the client’s disability ends, and when the client dies.
Payments from a special needs trust directly to the beneficiary are considered unearned income.
EXAMPLE
A client has a special needs trust. The client is going on a trip and the trustee deposits $500 from the trust into the client’s checking account so the client can buy an airline ticket. This $500 is considered unearned income in the month that it is deposited into the checking account.
Payments from a special needs trust for the benefit of the beneficiary, but not paid directly to the beneficiary, are not counted as income or a transfer.
EXAMPLE
A client has a special needs trust. The client is going on a trip. The trustee uses $500 from the trust and purchases an airline ticket for the client directly from the airline. This $500 is not considered income because it was paid directly to the vendor, not given to the client. It is not a transfer because it was used for the client’s benefit.
Pooled Trusts
The department uses the term “pooled trust” to describe a type of sole benefit trust; however, that term is not found in WAC. These trusts are established for disabled individuals of any age. The rules about how to count pooled trusts are found in WAC 388-561-0100 (6)(b) and (7)(b).
The purpose of a pooled trust is to ensure funds are available to provide goods and services not covered by Medicaid for a disabled person. Frequently, the trust pays for medical treatment, equipment, or supplemental care that is not covered by Medicaid. In addition, the trust may pay for the individual’s socialization activities such as outings and vacations.
A pooled trust does not need to pay out within the beneficiary’s actuarial lifetime. This is because the trust contains language that allows one of the following:
DSHS to recover Medicaid expenses out of the remaining assets when the client dies. Effective with pooled trusts established on or after 8/1/03, DSHS can recover Medicaid expenses when the trust terminates, when the client’s disability ends, or when the client dies; or
The remaining assets stay in the trust to benefit other trust beneficiaries.
Payments from a pooled trust directly to the beneficiary are considered unearned income.
Payments from a pooled trust for the benefit of the beneficiary, but not paid directly to the beneficiary, are not counted as income or a transfer.
If a client’s assets are added to a pooled trust after the beneficiary turns age 65, the addition is considered an asset transfer and a penalty must be considered.
If family members orthird party individuals wish to add assets to an aged (over 65) client’s pooled trust it is not considered an asset transfer. It would be more beneficial to establish and fund a separate discretionary trust for the client that would not be subject to a Medicaid payback.
Examples of pooled trusts:
Life Opportunities Trust
Lifetime Advocacy Plus Pooled Asset Trust
Pooled trusts as defined by WAC 388-561-0100 (7)(b) may be set up as a Life Opportunities Trust or Lifetime Advocacy Plus Pooled Asset Trust. These are 2 examples of pooled trusts.
TRUSTS CONTAINING ASSETS OF THE CLIENT OR THE CLIENT’S SPOUSE
Trusts Established on or After 8/1/03:
For trusts established on or after 8/1/03, a significant change has been added to the WAC for trusts that have a client’s spouse as a beneficiary. Trusts belonging to the community spouse will now be subject to the same rules as those where the client is the beneficiary.
EXAMPLE
Subsection (5):
Mary is a community spouse. In August 2003, Mary and her husband used community assets to create an irrevocable, sole benefit trust for Mary. Their son Jack is the trustee. The terms of the trust stipulate that the assets must be disbursed to Mary within her lifetime. Therefore, the assets within the trust are considered an available resource and are not subject to an asset transfer penalty. All distributions made to or for Mary’s benefit are considered income in the month the distribution is made.
Trusts Established From 8/11/93 and 7/31/03:
For any trust established after 8/11/93 and before 8/1/03, an irrevocable trust belonging to a community spouse is an unavailable resource. Disbursements made to or for the spouse’s benefit are unearned income.
EXAMPLE
Subsection (4)
Mary is a community spouse. In January 2002, Mary and her husband used community assets to create an irrevocable, sole benefit trust for Mary. Their son Jack is the trustee. The terms of the trust stipulate that the assets must be disbursed to Mary within her lifetime. Because the trust is irrevocable and Mary has no control over the assets, the trust is an unavailable resource. Because the trust meets the criteria of a sole-benefit trust, the assets transferred into it are not subject to a transfer penalty. All distributions made to or for Mary’s benefit are considered income in the month the distribution is made.
Trusts Established on or Before 8/10/93:
EXAMPLE
Subsection (3)(a)
In 1990, Patti’s husband established an irrevocable trust for her in case of his death. He died in 1992, leaving her Uncle John as trustee. According to the terms of the trust Uncle John has discretion to distribute up to $20,000 per year to Patti if he feels she needs it. Uncle John thinks that Patti wastes her money and decides he will allow her $400 per month from the trust.Patti has been to the doctor and was told that she needs an operation. She cannot afford it and has applied for Medicaid for herself and her 2 children. Even though Uncle John refuses to give Patti the money, the department must consider a resource available to Patti in the amount of $20,000 less $400 per month payments that have been paid out so far this year. This is because of the way the trust was worded.
EXAMPLE
Subsection (3)(b)
In 1992, Mark and Darci established a $100,000 irrevocable trust for Darci’s sister, Martha, payable beginning in the year 2000 at $20,000 per year to help Martha with college expenses. Now, Mark needs medical help due to a car accident and he has no medical or car insurance to help pay for his care. The department considers the entire trust is an unavailable resource to Mark and Darci.
EXAMPLE
Same situation as Example 1 Subsection (3)(b) except there is a clause in the above trust that states Mark and/or Darci could access up to $25,000 of the trust in case of hardship. Now the department must consider a $25,000 available resource when determining eligibility for medical, depending on whether Mark’s current need meets the definition of hardship in the trust.
EXAMPLE
Subsection (3)(c)(i)
David and Stella were married in 1989 and separated in 1992. They haven’t lived together since 1992; however, they are still legally married. Each spouse keeps one of the 2 children. At the time of the marriage, Stella set up a revocable trust with David as beneficiary, giving him $200 per month income and $100,000 at age 65. David now needs surgery and has applied for medical benefits. The department must consider the full amount of the trust as an available resource to David because he and Stella were living together at the time the trust was set up.
EXAMPLE
Subsection (3)(c)(ii)
Same situation as in the previous example (Subsection (3)(d)(i)), except Stella set up the trust in 1992 after she and David separated, making $10,000 available to David in January of each year as a type of support for him and their child. In this case, only the actual amount paid to David, the $10,000, is available to him. If it has been paid to him already this year and has been spent, the department counts nothing the rest of this year. If it has not been paid yet or David still has the distribution, the department must count it as a resource.
The differences between Subsections 3(c)(i) and 3 (c)(ii) revolve around who set up the trust and the circumstances at that time.
The trust tables below provide information about the more common trusts. However, it does not cover all possible trust scenarios. In addition, the information in the tables presumes that the trustee and the beneficiary are not the same person or entity.
Trusts Established on or After 8/1/03
Trust Type and Comments
Whose Funds
Beneficiary
Available Resource
Asset Transfer
Income
Testamentary
Deceased Person
Client
No
No
Yes - Payments actually made
Trust Established by Client or Spouse
Revocable
Client
Spouse
Someone legally acting on behalf of client or spouse
Someone acting at the direction of the client or spouse
Client or
Spouse
Yes - full amount of trust
Only the assets contributed by the client or spouse
Yes - payments made to or for the benefit of anyone who is not the client or the client's spouse
Yes - payment to or for the benefit of the client or spouse
Trusts Established by Client or Spouse
Irrevocable
Client
Spouse
Someone legally acting on behalf of client or spouse
Someone acting at the direction of client or spouse
Client or
Spouse
Yes - Any part from which payments can be made to/for client or spouse
Yes - Any part of the corpus from which payment cannot be made
Yes - Payments made to or for the benefit of anyone who is not the client or the client's spouse
Yes - payments to or for the benefit of the client or spouse
Special Needs Trusts
Stipulates DSHS recoupment at trust termination, end of disability or death
Client funds when trust established by parent, court, legal guardian or grandparent
Parent
Court
Grandparent
Legal Guardian
Disabled client age 64 or younger
No
Except funds added to trust after client turns age 65
Yes - assets added to the trust after the client turns age 65
Yes - payments made directly to the beneficiary
No - payments made to 3rd party for benefit of the beneficiary
Pooled Trusts
Stipulates DSHS recoupment at trust termination, end of disability or death
Or funds remain in the trust to benefit remaining beneficiaries when trust terminates
Non-Profit agency is trustee, separate accounts for each beneficiary
Client
Spouse
Someone legally acting on behalf of client or spouse
Someone acting at the direction of client or spouse
Parent
Grandparent
Legal Guardian
Disabled client of any age
No
Any funds added to the trust after client turns age 65 are not available but are an asset transfer
Yes - assets added to the trust after the client turns age 65.
Yes - payments made directly to the beneficiary
No - Payments made to 3rd party for benefit of the beneficiary
Spousal Sole Benefit Trusts
Irrevocable
Client
Spouse
Spouse
Yes - trust assets are an available resource
Yes - Any part of the corpus from which payment cannot be made
Yes - Payments to or for the benefit of anyone other than the client's spouse
Yes - any distribution paid directly to the spouse or to a 3rd party to benefit the spouse
Trust Established From 8/11/93 to 7/31/03
Trust Type and Comments
Whose Funds
Beneficiary
Available Resource
Asset Transfer
Income
Testamentary
Deceased Person
Client
No
No
Yes - Payments actually made
Trust Established by Client or Spouse
Revocable
Client
Spouse
Someone legally acting on behalf of client or spouse
Someone acting at the direction of the client or spouse
Client
Yes - full amount of trust
Only the assets contributed by the client or spouse
Yes - payments to or for the benefit of someone other than the client
Yes - payment to or for the benefit of the client or spouse
Trusts Established by Client or Spouse
Irrevocable
Client
Spouse
Someone legally acting on behalf of client or spouse
Someone acting at the direction of client or spouse
Client
Yes - Any part from which payments can be made to/for client
Yes - Any part of the trust corpus from which payment cannot be made
Yes - payments made to or for the benefit of someone other than the client
Yes - payments to or for the benefit of the client
Special Needs Trusts
Stipulates DSHS recoupment
Client fund when trust established by parent, court, grandparent or legal guardian.
Parent
Court
Grandparent
Legal Guardian
Disabled client age 65 or younger
No
Except funds added to trust
Yes - assets added to the trust after the client turns age 65
Yes - payments made directly to the beneficiary
No - payments made to 3rd party for benefit of the beneficiary
Pooled Trusts
Stipulates DSHS recoupment at death
Or funds remain in the trust to benefit remaining beneficiaries when trust terminates
Non-Profit agency is trustee, separate accounts for each beneficiary
Client
Spouse
Someone legally acting on behalf of client or spouse
Someone acting at the direction of client or spouse
Parent
Grandparent
Legal Guardian
Disabled client of any age
No
Any funds added to the trust after client turns age 65 are not available but are an asset transfer
Yes - assets added to the trust after the client turns age 65.
Yes - payments made directly to the beneficiary
No - Payments made to 3rd party for benefit of the beneficiary
Spousal Sole Benefit Trusts
Irrevocable
Client
Spouse
Spouse
No - trust assets are an available resource
Yes - Any part of the trust that will pay out beyond the spouse's actuarial life expectancy
Yes - Any part of the trust that will not pay out
Yes - Payments made that benefit someone other than the spouse
Yes - any distribution paid directly to the spouse or to a 3rd party to benefit the spouse
Trust Establishment prior to 8/11/93
Trust Type and Comments
Whose Funds
Beneficiary
Available Resource
Asset Transfer
Income
Testamentary
Deceased Person
Client
No
No
Yes - Payments actually made
Revocable
or
Irrevocable
Client
Spouse
Legal Guardian
Client, at least partially
Yes - the largest amount allowed by the trust
Yes - The amount of the assets that are not available that were put into the trust by the client or the client's spouse
Yes - payment allowed to be made
No - Whatever is not allowed to be distributed is unavailable
Irrevocable/Sole Benefit
Client
Someone other than the client or spouse or disabled child or disabled person under age 65
Yes
No
No
Irrevocable/Sole Benefit
Client can access some of the funds
Client
Someone other than client or spouse or disabled child or disabled person under age 65
Yes - amount client has access to
Yes - the amount that is not available
Yes - Amount actually distributed by the trustee to the client
Revocable
Client
Spouse if living with client
Other person to the extent client has access to the funds
Client
Spouse
Yes - Full amount of the trust
No
No
Revocable/Sole Benefit
Spouse if not living with client
Other person if distributed by a trustee
Client
Yes - Amount of money actually paid to client
No
No
Established on or before 4/6/86
Sole Benefit For Client in ICFMR
N/A
Client
No
No
No
Completely Disregard
WORKER RESPONSIBILITIES
Obtain a copy of the trust and/or supporting documents listing the investments and distributions from the client, trustee, or attorney.
Review the documents to determine:
The type of trust;
The date the trust was established;
Whose assets were used to create the trust;
Who is the beneficiary;
The value of the trust when it was created;
What disbursements can be made from the trust principal or proceeds; and
Any special provisions.
Verify:
The current value of the trust;
The actual disbursement amounts paid from the trust;
The dates of each disbursement; and
To whom the disbursements were paid.
QUESTIONS TO CONSIDER WHEN REVIEWING A TRUST
Is it a valid trust?
Whose assets were used to create the trust, or who is the Trustor?
Who will manage the trust, or who is the Trustee?
Who will benefit from the trust, or who is the beneficiary?
Is it a sole benefit, special needs or pooled trust?
Who established the trust?
The client;
The client’s spouse;
The client’s parent;
The client’s grandparent,
A court; or
Someone else?
Is the beneficiary disabled?
Is the beneficiary age 64 or younger?
What is the beneficiary’s relationship to the LTC applicant or recipient?
Is the beneficiary the client or the client’s spouse?
Do you need to consider a transfer of asset?
Is the trust revocable or is it irrevocable?
What assets make up the corpus, or principal?
Did the assets all come from the client, or were some of them from another person? If so, whom?
What disbursements can be made and can they come from all or only a portion of the corpus?
What disbursements have already been made?
If a disbursement has been made, what was the date it was paid, the amount that was paid, who was paid, and was it for the benefit of the beneficiary?
