WAG 07-02-15-a

The following applies if Revised textresources of the person and/or spouse were used to form all or a part of the principal and the trust is created (other than by will) by:

  • the customer;
  • the customer's spouse; or
  • any other person with legal authority to act on behalf of the person or the person's spouse.

Under this policy, a trust is a legal device, or a similar legal instrument (see NOTE), that is created with the customer's and/or spouse's Revised textresources. The person transfers resources to a trustee(s) in order that the assets be held, managed, or administered for the benefit of the person, or beneficiaries.

NOTE: The term "similar legal instrument" refers to any legal arrangement, instrument, or device used to shelter resources that meets all the criteria of a trust, but is not called a trust. Examples include but are not limited to:

  • escrow accounts;
  • pension funds;
  • investment accounts; and
  • other accounts managed by persons with fiduciary obligations.

A person with "fiduciary" obligations has the legal responsibility to manage the account for the benefit of the client.

For trusts that include resources of other persons along with resources of the customer and/or spouse, consider only the portion of the resources that are attributed to the customer and/or spouse.

The creation of a trust is a transfer of resources. For an NH, SLF, and a Medical client applying for or receiving services through the DoA Home and Community Based Services (HCBS) waiver, the creation of the trust is subject to transfer policy (see PM 07-02-20).

Trusts may be revocable or irrevocable.

Revocable Trusts

These trusts can be changed. Treat the principal and payments from the trust as follows:

  • Count the principal as an available asset; and
  • Count any payments actually made to or for the benefit of the client as income; and
  • Treat any other payments as a transfer.

Irrevocable Trusts

These trusts cannot, in any way, be changed. Some irrevocable trusts permit payments to be made and some do not. Count the principal and payments from the trust based on whether the terms of the trust permit payments from a portion of the trust as follows:

Payments Permitted by the Irrevocable Trust

  • Count the part of the principal, from which payments to or for the benefit of the client may be made, as an available resources; and
  • Count any payments actually made to or for the benefit of the client as income; and
  • Treat any other payments as a transfer.

Payments Not Permitted by the Irrevocable Trust

  • Count the part of the principal from which no payment may be made as a transfer of resources; and
  • The date of the transfer is the date the trust was created or, if later, the date payment to the person was stopped under the terms of the trust.