(d) Treatment of trust amounts
(1) For purposes of determining an individual's eligibility
for, or amount of, benefits under a State plan under this
subchapter, subject to paragraph (4), the rules specified
in paragraph (3) shall apply to a trust established by such
individual.
(2)(A) For purposes of this subsection, an individual shall
be considered to have established a trust if assets of the
individual were used to form all or part of the corpus of
the trust and if any of the following individuals established
such trust other than by will:
(i) The individual.
(ii) The individual's spouse.
(iii) A person, including a court or administrative body,
with legal authority to act in place of or on behalf of the
individual or the individual's spouse.
(iv) A person, including any court or administrative body,
acting at the direction or upon the request of the individual
or the individual's spouse.
(B) In the case of a trust the corpus of which includes assets
of an individual (as determined under subparagraph (A)) and
assets of any other person or persons, the provisions of this
subsection shall apply to the portion of the trust attributable
to the assets of the individual.
(C) Subject to paragraph (4), this subsection shall apply
without regard to--
(i) the purposes for which a trust is established,
(ii) whether the trustees have or exercise any discretion
under the trust,
(iii) any restrictions on when or whether distributions may
be made from the trust, or
(iv) any restrictions on the use of distributions from the
trust.
(3)(A) In the case of a revocable trust--
(i) the corpus of the trust shall be considered resources
available to the individual,
(ii) payments from the trust to or for the benefit of the
individual shall be considered income of the individual, and
(iii) any other payments from the trust shall be considered
assets disposed of by the individual for purposes of subsection
(c) of this section.
(B) In the case of an irrevocable trust--
(i) if there are any circumstances under which payment from
the trust could be made to or for the benefit of the individual,
the portion of the corpus from which, or the income on the
corpus from which, payment to the individual could be made
shall be considered resources available to the individual,
and payments from that portion of the corpus or income--
(I) to or for the benefit of the individual, shall be considered
income of the individual, and
(II) for any other purpose, shall be considered a transfer
of assets by the individual subject to subsection (c) of this
section; and
(ii) any portion of the trust from which, or any income on
the corpus from which, no payment could under any circumstances
be made to the individual shall be considered, as of the date
of establishment of the trust (or, if later, the date on which
payment to the individual was foreclosed) to be assets disposed
by the individual for purposes of subsection (c) of this section,
and the value of the trust shall be determined for purposes
of such subsection by including the amount of any payments
made from such portion of the trust after such date.
(4) This subsection shall not apply to any
of the following trusts:
(A) A trust containing the assets of
an individual under age 65 who is disabled (as defined in
section 1382c(a)(3) of this title) and which is established
for the benefit of such individual by a parent, grandparent,
legal guardian of the individual, or a court if the State
will receive all amounts remaining in the trust upon the death
of such individual up to an amount equal to the total medical
assistance paid on behalf of the individual under a State
plan under this subchapter.
(B) A trust established in a
State for the benefit of an individual if--
(i) the trust is composed only of pension, Social Security,
and other income to the individual (and accumulated income
in the trust),
(ii) the State will receive all amounts remaining in the
trust upon the death of such individual up to an amount equal
to the total medical assistance paid on behalf of the individual
under a State plan under this subchapter, and
(iii) the State makes medical assistance available to individuals
described in section 1396a(a)(10)(A)(ii)(V) of this title,
but does not make such assistance available to individuals
for nursing facility services under section 1396a(a)(10)(C)
of this title.
(C)
A trust containing the assets of an individual who is disabled
(as defined in section 1382c(a)(3) of this title) that meets
the following conditions:
(i) The trust is established and managed by a nonprofit association.
(ii) A separate account is maintained for each beneficiary
of the trust, but, for purposes of investment and management
of funds, the trust pools these accounts.
(iii) Accounts in the trust are established solely for the
benefit of individuals who are disabled (as defined in section
1382c(a)(3) of this title) by the parent, grandparent, or
legal guardian of such individuals, by such individuals, or
by a court.
(iv) To the extent that amounts remaining in the beneficiary's
account upon the death of the beneficiary are not retained
by the trust, the trust pays to the State from such remaining
amounts in the account an amount equal to the total amount
of medical assistance paid on behalf of the beneficiary under
the State plan under this subchapter.
(5) The State agency shall establish procedures (in accordance
with standards specified by the Secretary) under which the
agency waives the application of this subsection with respect
to an individual if the individual establishes that such application
would work an undue hardship on the individual as determined
on the basis of criteria established by the Secretary.
(6) The term "trust" includes any legal instrument
or device that is similar to a trust but includes an annuity
only to such extent and in such manner as the Secretary specifies.
(e) Definitions
In this section, the following definitions shall
apply:
(1) The term "assets", with respect to an individual,
includes all income and resources of the individual and of
the individual's spouse, including any income or resources
which the individual or such individual's spouse is entitled
to but does not receive because of action--
(A) by the individual or such individual's spouse,
(B) by a person, including a court or administrative body,
with legal authority to act in place of or on behalf of the
individual or such individual's spouse, or
(C) by any person, including any court or administrative
body, acting at the direction or upon the request of the individual
or such individual's spouse.
(2) The term "income" has the meaning given such
term in section 1382a of this title.
(3) The term "institutionalized individual" means
an individual who is an inpatient in a nursing facility, who
is an inpatient in a medical institution and with respect
to whom payment is made based on a level of care provided
in a nursing facility, or who is described in section 1396a(a)(10)(A)(ii)(VI)
of this title.
(4) The term "noninstitutionalized individual"
means an individual receiving any of the services specified
in subsection (c)(1)(C)(ii) of this section.
(5) The term "resources" has the meaning given
such term in section 1382b of this title, without regard (in
the case of an institutionalized individual) to the exclusion
described in subsection (a)(1) of such section.
[Return to Attorney Memorandum.]
