Page 72

Title 8: Medicaid Page 68 Iowa Department of Health and Human Services Employees’ Manual Chapter D: Resources Trusts Revised September 13, 2024 Trusts Established After August 10, 1993 Irrevocable Trusts Legal reference: 441 IAC 75.24(2)“b” If the applicant or member or that person’s spouse establishes an irrevocable trust after August 10, 1993, which names the applicant or member as a beneficiary, determine what payments are allowed from the trust. If payment could be made to or for the benefit of the applicant or member (as beneficiary) for any purpose, count the portion of the principal from which that payment could be made as a resource. Also count any income earned on the principal from which payment could be made. Payments from the trust principal or income to or for the benefit of the applicant or member (beneficiary) are countable income in the period of intended use and a countable resource the following month. Payments from trust principal or income for any other purpose are a transfer of assets for less than fair market value. Determine the period of ineligibility according to Penalties for Transferring Assets. Any portion of the trust or any income on the principal from which no payment could be made to the applicant or member (beneficiary) under any circumstances is a transfer of assets for less than fair market value. The transfer occurred on the later of the date the trust was established or the date on which payment to the beneficiary was no longer available. Determine the value of the transfer by including the amount of any payments made from the trust after the date of foreclosure. Determine a period of ineligibility according to Penalties for Transferring Assets. Payments made on behalf of the beneficiary are countable income in the month the payment is made despite the purpose of the payment. FIP and SSI rules do not apply to irrevocable trusts established with an applicant’s or a member’s own assets after August 10, 1993.