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Title 8: Medicaid Page 53 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Trust Definitions No court involvement is necessary to establish a trust. The grantor and the beneficiary can be the same person, and the grantor can be the trustee, but the trustee and the beneficiary cannot be identical. If the trustee and the beneficiary are identical, the trustee/beneficiary owns the property outright. NOTE: The trustee and the beneficiary are not identical if the state is a residuary beneficiary. The trustee and the life-time beneficiary may be the same person on a qualifying special needs or MAIT trust where the state is a residuary beneficiary. A grantor is a person who sets up a trust. A person may be a grantor if an agent or someone legally empowered to act on behalf of the person or the person’s spouse (such as a legal guardian, representative payee, person acting under a power of attorney, or conservator) establishes the trust with the person’s funds or property. The terms grantor, trustor, and settlor may be used interchangeably. A trustee is a person or entity who holds legal title to property for the use or benefit of another person. In most instances, the trustee has no legal right to revoke the trust or use the property for the trustee’s own benefit. However, if the member is a trustee and has the legal ability to revoke the trust and use the money for the member’s own benefit, the trust is a resource to the member. A beneficiary is a person who benefits from the principal or income. A beneficiary does not hold legal title to trust property but does have an equitable ownership interest in it. A trust may have more than one beneficiary. A residual or residuary beneficiary benefits from the income and principal after the primary beneficiary is no longer involved, for example, due to the death of the primary beneficiary. The residuary beneficiary receives no benefit from the trust until certain conditions are met. A Totten trust is a tentative trust in which a grantor makes himself or herself trustee of the grantor’s own funds for the benefit of another. The trustee can revoke a Totten trust at any time. Therefore, consider the principal and income of a Totten trust available to the member. Should the trustee die without revoking the trust, ownership of the money passes to the beneficiary. A conservatorship is similar to a trust. A conservatorship is always established by a court, which explicitly appoints a conservator to act on the ward’s behalf for the ward’s financial affairs. Treat a conservatorship established on or after February 9, 1994, as a trust. See Revocable Trusts and Irrevocable Trusts to determine availability and whether transfer of asset policies apply.