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COMBINED MEDICAID 402-3 Trust Funds Supersedes: CMA 402-3 (03/01/2017)

Reference: CFR 435.601; Social Security Act §1917; 42 U.S.C. 1396p(d) for trusts established after 8/11/93 or 42 U.S.C. 1396a(k) for trusts established prior to 8/11/93.

Overview: A trust and the income it generates may be countable or excluded depending on the trust creation date, the source of assets used to fund the trust, the nature of the trust, and other factors. All trusts must be evaluated to determine their availability for the household’s support and maintenance.

Exclusions listed in this section do not apply to property the filing and/or assistance unit does not own. This includes, but is not limited to property owned by or held in:

1. A trust of any kind (whether or not any filing/assistance unit member is a trust beneficiary or a trustor), 2. A corporation of any kind (whether or not any filing/assistance unit member is a corporate shareholder), 3. A partnership of any kind (whether or not any filing/assistance unit member is a partner), 4. A limited liability company of any kind (whether or not any filing/assistance unit member is a member of the company) 5. Any other legal entity, instrument, device or arrangement of any kind confirming the filing or assistance unit does not own the property.

NOTE: Property placed into a trust is not personally owned; it is owned by the trust. Therefore, personal resource exclusions (i.e., home and surrounding property, etc.) listed in CMA 402-1 cannot be used to reduce the trust value.

SUPPORT AGREEMENTS:

If any filing unit member has a written agreement stating that another person, entity or corporation agrees to support the household or household member (e.g., family farm corporation, communal living, fraternal organization, etc.), the agreement must be evaluated to determine if it meets:

1. the legal definition of a trust; 2. ownership; 3. accessibility; and 4. value

ACCESSIBILITY:

If the client verifies that only a portion of the trust is available to them, only that portion is counted. If this is not verified, the full trust value is considered available to each trust beneficiary. A trust may be designated as revocable or irrevocable.

A revocable trust is a trust that can be modified or terminated by the grantor, or someone else, according to the terms of the trust. An irrevocable trust is a trust that cannot be modified or terminated by the grantor or (in most cases) anyone else. A trust which is called irrevocable but which