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Aged, Blind and Disabled; Section: Financial Eligibility Requirements; Policy Manual Number: 110.055; Chapter: ABD TRUSTS Legal Authority: Social Security Act § 1917(d); 42 USC 1396p(d); State Medicaid Manual § 3259; Tenn. Code Ann. § 35-15-813(a)(2); Tenn. Comp. R. & Regs. 1200-13-20-.06 1. Overview A trust is a right of funds or property held by an individual (the trustee) for the benefit of another (the beneficiary) or for self-benefit. A trust is composed of the initial amount used to create the trust (the principal) and any income (usually interest) it may produce. The trustee holds legal title to the trust and manages it for the benefit or use of the beneficiary. Determine whether a trust is a countable or excluded resource when an Eligibility Determination Group (EDG) member is either the trust’s trustee or beneficiary. 2. Definitions Beneficiary: The person for whose benefit the trust is created. Discretionary Trust: The trustee has discretion to use the trust for the beneficiary’s needs as he deems appropriate. The beneficiary has no control over the trust. Grantor/Trustor: The person who creates a trust, including a court or administrative body with legal authority to act in place of, on behalf of, or at the request or direction of the individual or spouse. Grantor Trust: A trust in which the grantor of the trust is the sole beneficiary of the trust (i.e., the grantor establishes a trust for himself). Legal Instrument or Device Similar to a Trust: Any financial instrument that resembles a trust which includes, but is not limited to: escrow accounts, pension funds, annuities, and other similar entities managed by an individual or entity with fiduciary responsibilities. Mandatory Trust: Requires the trustee to pay to or for the beneficiary’s benefit, the trust’s earnings and/or principal at certain times in specified amounts or for a specified type of care. The trustee has no discretion on distribution from the trust. Totten Trust: A tentative trust in which the grantor is trustee of her own funds for the benefit of another. The trustee or grantor can revoke the trust at any time. If the trustee dies before revoking the