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If the principal of a trust includes assets of the applicant/member or spouse, and the assets of any other person or persons, apply the policies in SECTION 16.6.3 REVOCABLE TRUSTS and SECTION 16.6.4 IRREVOCABLE TRUSTS to the portion of the trust attributable to the assets of the applicant/member or spouse. 16.6.2 Trust Principal The trust principal is the amount placed in trust by the grantor plus any trust earnings paid into the trust and left to accumulate. 16.6.3 Revocable Trusts A Revocable Trust is a trust which can be revoked, canceled or modified by the grantor or by a court. A trust which is called irrevocable, but which will terminate if some action is taken by the grantor, is considered a revocable trust. The trust principal of a revocable trust is an available asset. 16.6.4 Irrevocable Trusts An irrevocable trust is a trust that cannot, in any way, be revoked by the grantor. 16.6.4.1 Trust Established With Resources of a Third Party If the resources of someone other than the individual or their spouse (i.e., a third party),were used to form the principal of an irrevocable trust, the trust principal is not an available asset unless the terms of the trust permit the individual to require that the trustee distribute principal or income to him or her. 16.6.4.2 Trust Established With Resources of the Individual or Spouse If the resources of the individual or the individual’s spouse were used to form all or part of the principal of the trust, some or all of the trust principal and income may be considered a non-exempt asset, available to the individual. If there are any circumstances under which payment from the trust could be made to or for the benefit of the individual at any time no matter how distant, the portion of the principal from which, or the income on the principal from which, payment to the individual could be made shall be considered non-exempt assets, available to the individual. This treatment applies regardless of: • The purpose for which a trust is established • Whether the trustees have or exercise any discretion under the trust • Any restrictions on when or whether distributions may be made from the trust • Any restrictions on the use of distributions from the trust Example 1: Doug is a 65 year old Medicaid applicant. Several years ago, Doug transferred his life savings of $60,000 to an irrevocable trust, naming himself as the beneficiary. Doug’s brother, Jim was appointed as the trustee. Under the terms of the trust, Jim could disburse up to $10,000 annually, from either trust principal or trust income, either directly to Doug or indirectly to provide some benefit for Doug. The trustee had sole discretion as to when and how these trust disbursements would be made, but under no circumstance could they exceed $10,000 in a 12 month period. Because the entire corpus (principal of the fund) could eventually be distributed, $60,000 would be considered an available non-exempt asset for Doug’s Medicaid eligibility determination, even if the trustee decides not to make any actual disbursements.