42 U.S.C. § 1396p
(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.]
