*** The Health Care Programs Manual (HCPM) has been replaced by the Minnesota Health Care Programs Eligibility Policy Manual (EPM) as of June 1, 2016. Please refer to the EPM for current health care program policy information. ***
Effective: May 1, 2010 |
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19.25.35.05 - Identifying Types of Trusts |
Archived: June 1, 2016 (Previous Versions) |
A trust may be established for a variety of reasons, including:
l To transfer assets to heirs without the need to go through a probate court.
l To make a relative or other individual (such as a disabled individual) the beneficiary of a trust to provide for the individual’s future support needs.
l To allow certain income and assets to be disregarded for MHCP eligibility purposes. Examples: Special Needs Trust and Pooled Trusts.
Determining How to Treat a Trust.
Third Party Established and Funded Trusts.
Determining How to Treat a Trust
Treatment of a trust varies depending on the type of trust. Factors used to determine how to treat a trust include:
l When the trust was established;
l Who established the trust; and
l Whose income or resources were used to fund the trust.
The following information provides general guidelines to help identify the type of trust to evaluate .
A trust is probably a Client-Funded Trust if it is:
n established on or after August 11, 1993;
n not established by will; and
n funded with the income and/or assets of the MA client and/or client’s spouse.
A trust is probably a Medicaid Qualifying Trust (MQT) if it is:
n established before August 11, 1993; and
n funded with the income and/or assets of the MA client or the client’s spouse.
A trust is probably a Special Needs Trust if all of the following criteria are met:
n It was established on or after August 11, 1993;
n The trust was established solely for the benefit of a disabled individual who met SSA disability criteria when the trust was established;
n The disabled individual was under age 65 when the trust was established;
n It is funded in whole or in part with the income or assets of the disabled individual; and
n It was not established by will.
A trust is probably a Pooled Trust if all of the following criteria are met:
n It was established on or after August 11, 1993;
n The trust is managed by a non-profit organization;
n The sub-accounts in the trust are established solely for the benefit of disabled individuals according to SSA disability criteria;
n The sub-account is funded in whole or in part with the income or assets of the disabled individual; and
n It was not established by will.
Third Party Established and Funded Trusts
A trust is probably established and funded by a third party if all of the following criteria are met:
n Funded by a third party grantor during the third party’s life or upon the third party grantor’s death; and
n The trust does not meet all of the guidelines listed above for a Supplemental Needs Trusts.
A trust is probably a Supplemental Needs Trust if all of the following criteria are met:
n It is funded by a third party grantor during the third party’s life or upon the third party grantor’s death;
n The lifetime beneficiary was a person with a disability at the time the trust was established; and
n The purpose of the trust is to supplement government benefits the beneficiary receives but not supplant (replace) government benefits.
A trust is probably a Zebley trust if it:
n Was established on or after 1990;
n Is funded with payment made to the client by SSA pursuant to the United States Supreme Court Decision, Sullivan v. Zebley, 493 U.S. 521,110 S.Ct. 885 (1990).