Medicaid Policy
Medicaid Policy
Contact DHHS Policy Specialist for Previous Policy
Use the policy in 512-2 through 512-2.4 when the trust was established by the individual on or after August 11, 1993. The basic definition of a trust is found in 512. An individual is considered to have established a trust if any assets of the individual (or spouse), regardless of how little, were transferred to a trust other than by a will.
If the trust contains assets of the individual or spouse, and assets of other individuals, apply these policies only to the portion of the trust consisting of the assets of the individual and spouse. Thus, income earned by the trust would be prorated based on the percentage of the assets attributable to each person whose assets are held in the trust.
To see a summary about trusts and transfers see the Trust Table. If you cannot decide whether the trust is available, follow the procedure for having a trust reviewed. (See 594 if the trust is for funeral/burial arrangements.)
Apply these rules regardless of:
The purpose for which the trust was established,
Whether or not the trustees have or use any discretion for the use of the trust,
Any restrictions on when or whether distributions can be made from the trust, or
Any restrictions on the use of distributions from the trust, or
Any clause or requirement in the trust that attempts to protect the trust from being considered under the Medicaid rules in section 512-2, no matter how specifically it refers to Medicaid or other public assistance programs.
In the following sections, the term "assets" when talking about trusts and possible transfers includes both resources and income the individual or individual's spouse own or that would have become the individual's or spouse's resources or income but for actions taken to direct the assets elsewhere.