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Title 8: Medicaid Page 52 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Trust Definitions Policy on trusts is organized as follows:  Definitions of the basic terms used in describing trusts.  How to evaluate a trust, depending on a client’s roles in relation to the trust.  Treatment of assets in a trust, including a comparison of the major kinds of trusts.  More information on specific kinds of trusts. Trusts established with assets owned by the beneficiary are treated differently depending on whether they are revocable or irrevocable and whether they were established after August 10, 1993. Irrevocable trusts established on or before August 10, 1993, are known as “Medicaid qualifying trusts.” Certain kinds of irrevocable trusts established after August 10, 1993, provide that the assets go to reimburse the state for the member’s Medicaid expenses after the member’s death. Trusts that are subject to different treatment because of these provisions are:  Medical assistance income (MAIT) trusts.  Special needs trusts for persons under 65.  Special needs trusts with no age limit. Trust Definitions A trust is an arrangement whereby one or more persons (the trustees) hold property for the benefit of one or more others (the beneficiaries). Trusts include two types of assets:  Trust principal is the property placed in trust by the grantor that the trustee holds, subject to the rights of the beneficiary, plus any trust earnings paid into the trust and left to accumulate the month following the month of receipt.  Trust earnings or income are amounts earned by trust principal, such as interest, dividends, royalties, or rents. These amounts are unearned income to the beneficiary if the beneficiary is legally able to use them for personal support and maintenance. A trust can be established by a written document, including a will. A trust can also be established by a verbal understanding between the grantor and the trustee when the property has been transferred to the trustee.