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Aged, Blind and Disabled Manual Section: Financial Eligibility Requirements Policy Manual Number: 110.055 Chapter: ABD Trusts

May 1, 2026 Division of TennCare 6 2. A parent; 3. A grandparent; 4. A legal guardian; or 5. The court. ii. Established with assets of the disabled individual; iii. Established and managed by a non-profit association with a separate account maintained for each trust beneficiary, but multiple trust accounts are pooled for investment purposes and management of funds; and iv. Provides that upon the death of the disabled individual, any amount remaining in the account that is not retained by the trust will be paid to TennCare, up to the total amount of medical assistance paid on behalf of the individual during his lifetime. Pooled trust established or modified by individuals age 65 or older must be evaluated for a potential transfer of assets. See the Transfer of Assets and Penalty Periods policy. g. Income-Producing Trusts (Applies to trusts created on or after 8/11/1993) i. If a trust fund is producing regular income for the beneficiary and the terms of the trust specify that the beneficiary does not have access to the trust principal or income, that such access is limited to the trustee or court, and the trust does not contain any of the beneficiary’s own assets, then the value of the trust is an excluded asset. Any payments the individual receives from the trust are considered unearned income. ii. Dividends, interest, rents and other income generated by a trust fund, unless otherwise excluded, that can be paid to or for the benefit of the beneficiary are considered countable income to the beneficiary in the month they become available, regardless of whether the income is actually paid out to the beneficiary. iii. Income earned by a trust that can be distributed, but is not distributed to the beneficiary and is instead retained in the trust becomes a countable resource to the beneficiary in the months following the month the income was available for distribution. iv. Funds withdrawn from the principal of an inaccessible or excluded trust, unless otherwise excluded, are considered countable income in the month received. v. Funds withdrawn from the principal of an accessible or countable trust fund are excluded as income because an accessible trust fund is a countable resource. Money cannot be considered as income and a resource in the same month. vi. If an individual is receiving regular payments from an inaccessible trust fund, and the trustee has the discretion to use the trust principal for the beneficiary’s support and