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Wisconsin Department of Health and Family Services |
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Wisconsin Department of Health and Family Services |
A trust is any arrangement in which a person (the "grantor") transfers property to another person with the intention that the person (the "trustee") hold, manage, or administer the property for the benefit of the grantor or of someone designated by the grantor (the "beneficiary").
The term “trust” includes any legal instrument or device or arrangement, which, even though not called a trust under state law, has the same attributes as a trust. That is, the grantor transfers property to the trustee and the grantor's intention is that the trustee hold, manage, or administer the property for the benefit of the grantor or of the beneficiary.
The grantor can be:
The MA client.
His/her spouse.
A person, including a court or an administrative body, with legal authority to act in place of or on behalf of the client or the client’s spouse. This includes a power of attorney or a guardian.
A person, including a court or an administrative body, acting at the direction or upon the request of the client or the client’s spouse. This includes relatives, friends, volunteers or authorized representatives.
The trust principal is the amount placed in trust by the grantor plus any trust earnings paid into the trust and left to accumulate.
A revocable trust is a trust which can be revoked, canceled or modified by the grantor or by a court. A trust which is called irrevocable, but which will terminate if some action is taken by the grantor, is considered a revocable trust.
The trust principal of a revocable trust is an available asset.
An irrevocable trust is a trust that cannot, in any way, be revoked by the grantor.
The trust principal of an irrevocable trust is not an available asset.
Note: If the grantor is an institutionalized person , or some-one acting on behalf of an institutionalized person, setting up an irrevocable trust may be a divestment (4.7.13.2) and (4.7.13.3).
If the Special Needs Trust is an irrevocable trust, follow the policy outlined in 4.5.6.3. Disregard special needs trusts whose sole beneficiary is under age 65 and totally and permanently disabled (under SSI program rules) if it meets these conditions:
The trust must be established for the sole benefit
of the disabled person by his/her parent, grandparent, legal guardian
or a court, and
Contain a provision that, upon the death of the beneficiary, the Wisconsin MA program will receive all amounts remaining in the trust not in excess of the total amount of MA paid on behalf of the beneficiary.
The exception continues after the person turns 65, provided s/he continues to be disabled. However, a grantor cannot add to the trust after the beneficiary turns 65. Anything added to the trust after the beneficiary turns 65 is a divestment. Money added before the beneficiary turns 65 is not a divestment
Disregard pooled trusts for disabled persons. They must meet the following conditions:
Established and managed by a non-profit association.
A separate account is maintained for each beneficiary. For purposes of investment and management, the funds from separate accounts may be pooled together.
The sole beneficiaries are persons determined disabled under SSI program rules.
Contain a provision stating that upon the death of the beneficiary the trust will use remaining funds in the account to reimburse the Wisconsin MA program.
This page last updated in Release Number : 02-03
Release Date: 07-01-02
Effective Date: 07-01-02
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