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Appendix A-6 Page 1 of 2 Revised 10/01/2025 DIVISION OF MEDICAID SPECIAL NEEDS TRUST GUIDELINES Medicaid’s guidelines for payments and distributions from a Special Needs Trust are listed below. Medicaid will use these guidelines in its review of the annual accounting for the trust. The Medicaid eligibility of the beneficiary of the trust may be affected if these guidelines are not followed. 1. Payments for medical expenses that are not paid by Medicaid are allowed to be made from the trust. 2. Gifts must not be made from the trust. 3. Compensation paid to a family member from the trust for services rendered as trustee must be reasonable under the circumstances. 4. Compensation paid to a family member from the trust for services rendered as a caregiver to the beneficiary must be reasonable under the circumstances and not exceed rates charged by agencies in the geographic area for the same or similar services. For a parent, the services must be over and above normal parental responsibilities. 5. Medicaid will allow the purchase of residential real property by the trust if the residence serves as the beneficiary’s place of residence. The trust must be the owner of any real property purchased by the trust. Additions or improvements to existing property owned by another individual will be allowed if made for the benefit of the beneficiary. The trust must have a lien on the property for the cost of the additions or improvements. 6. If the trust beneficiary is an SSI recipient, the payment of ad valorem taxes and/or insurance premiums and payment of utilities will produce In Kind Support and Maintenance (ISM) for the beneficiary that will reduce their SSI benefits and must be reported to Medicaid. 7. Medicaid will allow the purchase of a vehicle by the trust only if it is the only household vehicle or is specially equipped to allow the beneficiary to operate the vehicle or to be transported in the vehicle. If the vehicle will be used for anyone other than the beneficiary, all expenses relating to the vehicle must be prorated between the trust and anyone other than the beneficiary that uses the vehicle. If the vehicle is placed in the name of anyone other than the beneficiary, the trust must have a lien on the vehicle title. 8. Payments for vacations and other non-medical trips for the beneficiary must be reasonable under the circumstances and considering the size of the trust.