PM 07-02-15-a: Trusts Established on or After 08/11/93

WAG 07-02-15-a

Revocable Trusts

Revocable trusts can be revoked.

Resources held in a revocable trust are an available resource.

Transfers from resources held in a revocable trust are subject to resource transfer policy, see Transfer of Resource policy.

Irrevocable Trusts

Irrevocable trusts cannot be revoked.

Some irrevocable trusts permit withdrawals to be made from the resources held in the trust.

Withdrawals Permitted by the Irrevocable Trust

Resources held in an irrevocable trust that permits withdrawals are an available resource.

Transfers from resources held in an irrevocable trust that permits withdrawals are subject to resource transfer policy, see Transfer of Resource Policy.

Withdrawals Not Permitted by the Irrevocable Trust

Resources added to an irrevocable trust that does not permit withdrawals are subject to the resource transfer policy, see Transfer of Resource Policy.

The date of transfer is the date the trust was established and the resource(s) are added to the trust or the date resources are added to the trust after the trust is established.

Revocable-Irrevocable Trust Resource(s) in IES

A trust is an arrangement that allows a third party to hold resources on behalf of beneficiaries. A trust is funded with a person's real and personal property. Resources held in a trust may or may not be considered as available to compare to the resource limit. The terms of the trust establish if resources used to fund the trust are countable or not.

Revocable Trusts and Irrevocable Trusts that Permit Withdrawals

Resources held in a revocable trust and an irrevocable trusts that permit withdrawals are available resources.

Enter the resource type and amount (savings, checking, homestead, etc) in IES. Document in case comments the name of the trust and the resource(s) held in the trust.

Example: Jane Abcd has an active medical case. She also has a checking account that is held in the Jane Abcd revocable trust. The FCRC sends a copy of the trust to HFS OIG LTC-ADI. HFS OIG LTC-ADI reviews the trust and notifies the FCRC that the resources held in the trust are available. The FCRC enters the checking account as a liquid resource in IES. Do not enter the balance of the checking account on the trust page. Document in case comments that Jane has a checking account and it is held in the Jane Abcd revocable trust.

Irrevocable Trusts that Do Not Permit Withdrawals

When the terms of a trust do not allow withdrawals from the resources held in the trust, the resource is not available to count towards the resource limit. Enter the resource type and amount in IES, mark the resource as inaccessible. Document in case comments the name of the trust and the resource(s) held in the trust.

For persons applying for or receiving NH, SLP or DoA Home and Community Based Services (HCBS) waiver services

A resource becomes unavailable when the resource is transferred to a trust and the trust does not allow withdrawals from the trust. When a person receives LTC services and the person has a resource that becomes unavailable, the resource is subject to resource transfer policy. The date of transfer is the date the trust is established and the resource is added to the trust or the date resources are added to the trust after the trust is established.

Enter the resource type and amount (savings, checking, real property) in IES and complete resource transfer fields. Document in case comments the name of the trust and the resource(s) held in the trust.

Example 1: Paul has an active medical case. Paul also has an irrevocable trust that does not permit withdrawals from the resources held in the trust. Paul does not live in a NH, SLP or receive DoA HCBS waiver services. The FCRC sends a copy of the trust to HFS OIG LTC-ADI. HFS OIG LTC-ADI reviews the trust and notifies the FCRC that the resources held in the trust are not available. The FCRC enters the resource(s) on the appropriate resource page(s) in IES and marks the resource(s) as inaccessible. The FCRC does not enter the balance of the resource(s) held in the trust on the trust page. Document in case comments the irrevocable trust that does not permit withdrawals and the resources held in the trust.

Example 2: Bill is applying for medical benefits because he moved to a NH. Bill has an irrevocable trust that does not permit withdrawals from the resources held in the trust. The trust was established 6 months prior to Bill applying for medical benefits. At the time the trust was established Bill funded the trust with 2 CD's (valued at $10,000 each) and an investment account (valued at $50,000). The LTC hub sends a copy of the trust to HFS OIG LTC-ADI. HFS OIG LTC-ADI reviews the trust and notifies the LTC hub that the resources held in the trust are not available. The LTC hub applies PM 07-02-20-c and determines that the transfer of resources to the trust made the resources inaccessible for Bill to use towards his cost of care in the nursing home and therefore the transfer is unallowable. The LTC hub enters the resource(s) and completes the resource transfer page(s) in IES for each resource held in the trust. The FCRC does not enter the balance of the resource(s) held in the trust on the trust page. Document in case comments the name of the irrevocable trust, note that the trust does not permit withdrawals, and the resources held in the trust.