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TITLE 16 HEALTH AND SAFETY DELAWARE ADMINISTRATIVE CODE 51 The Delaware Department of Health and Social Services (DHSS), in order to comply with the Social Security Act Section 1917 (c) (1) as amended by the Omnibus Budget Reconciliation Act of 1993 (OBRA ‘93) has established policies and procedures for treating trusts in eligibility determinations and Post eligibility treatment. 20400.1 Definitions of Terms Found in a Trust Document Trust For the purpose of eligibility requirements, a trust is a legal document in which a person (grantor, trustor) transfers any item of value (property, money) to another person or organization (trustee) with the intention that it is held, managed, or administered by the trustee for the benefit of the grantor or certain named individuals (beneficiaries). The trust must be valid under State law and confirmed by a valid trust instrument or agreement. A trustee has a responsibility to hold or manage the trust and income for the benefit of the beneficiaries. The term "trust" also includes any legal instrument or device that is similar to a trust. It does not cover trusts established by wills. Trustee An individual, individuals or entity (such as an insurance company or bank) that manages a trust or similar device and has absolute responsibilities for the trust. Grantor (Trustor) A grantor is any individual who creates a trust. For eligibility requirements, the term "grantor" includes: - The individual - The individual's spouse - A person, including a court or administrative body, with legal authority to act in place of or on behalf of the individual’s or the individual's spouse - A person, including a court or administrative body, acting at the direction or upon the request of the individual, or the individuals spouse Individual For the purpose of Medicaid eligibility requirements, an individual is one who establishes a trust and who is an applicant for or receives Medicaid. An individual is considered to have established a trust if his or her assets were used to form part or all of the trust; and if the trust was not established by a will. Income See Section 20200 for explanation of income and how income is treated in eligibility determinations Resource Any cash or other liquid assets or any real or personal property that an individual owns and could convert to cash to be used for his/her support and maintenance. Beneficiary A person who gains or has an advantage or profits from the existence of a trust. A beneficiary does not hold legal title to trust property but does have an equitable ownership interest in the trust. Payment A payment from a trust is any disbursal (money, property) from the trust principal or from income generated by the trust that benefits the person receiving the disbursal. Annuity The right to receive fixed periodic payments either for life or a term of years. Assets Assets include all income and resources of the individual and of the individual’s spouse. Income is considered assets that are current. Resources are assets that have accumulated. 20400.2 Effective Date This section applies to all trusts established on or after August 11, 1993. It is based on the Omnibus Budget Reconciliation Act of 1993 (OBRA 93) rules. Treatment of trusts established prior to August 11,1993 would use pre-OBRA rules. 20400.3 Application of Trust Eligibility Policy These instructions apply to eligibility determination for all individuals including cash assistance recipients and others who are otherwise automatically eligible and whose income and resources are not ordinarily measured against an independent Medicaid eligibility standard. Any trust that meets the basic definition of a trust can be considered in determining eligibility for Medicaid. The characteristic of each trust determines the eligibility of the trust under Medicaid rules. In order to be eligible, trusts must state that upon the death of the individual any funds remaining in the trust will be paid to the State agency, up to the amount of Medicaid benefits paid on the individual's behalf. If an individual has resided in more than one State and has received Medicaid benefits from each state, any funds remaining in the trust are distributed to each State based on the States proportionate share of the total amount of Medicaid benefits paid by all the states. 20400.4 Revocable Trusts For the purpose of eligibility a trust is considered to be revocable if under State law it can be terminated by the grantor, if the trust states that it can be changed or terminated by a court, or if the trust states that it can be terminated if some action is taken by the grantor. For example, a trust may state that it is irrevocable but it may require a trustee to terminate the trust and give all funds to the grantor if the grantor leaves a nursing facility and returns home. 20400.4.1 Treatment of Revocable Trusts The entire body of the trust is a resource to the individual. All payments from the trust to the individual are considered income to the individual if the payment benefits the individual. However, if payments are made from the trust