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Medical Services Policy Manual, Section H

H-300 Transfer of Resources

H 304 Transfers to Trusts

b. Trust Established by Other(s) for Client 1) Consideration of Trust Principal - If the applicant, as beneficiary of the trust, has no access to the trust principal, it is not considered a resource to him. If the trust agreement provides for regular payments from the principal to the beneficiary, they are considered to be income in the month of their receipt and, if retained, to be a resource in the month(s) following. When the beneficiary of the trust has direct access to the principal of a trust it is considered as a resource and withdrawals are not considered as income. 2) Consideration of Interest Income from Trust Principal - When the beneficiary has legal access to the income from the trust principal, it is considered to be income as it becomes available, whether used or not. If not used, the amount will become a resource in themonth(s) following its availability. When the beneficiary has no right to the interest income from the trust principal and it is added to the principal, it is not income to the beneficiary, and only the trust payments made to the beneficiary are considered to be income. If retained, the payment(s) will be considered a resource in the month(s) following. If the trustee exercises authority over the use of trust payments, the payments are still considered to be income to the beneficiary whether received direct or “in-kind”.

TRUSTS ESTABLISHED 8/11/93 AND LATER 1. General Provisions All transfers to trusts established August 11, 1993, or later are governed by the terms of OBRA 1993 which, as federal law, supersedes Act 1228 and other applicable policy previously considered. The consideration of trusts established August 11, 1993, or later is as follows: a. An individual shall be considered to have established a trust if assets of the individual were used to form all or part of the corpus of the trust and if any of the following individuals established such trust, other than by will: 1) The individual; 2) The individual’s spouse;