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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:
Are established and managed by a non-profit
association. The
pooled trust can contain funds that hold accounts funded by third parties
for the benefit of the disabled person's own assets or income.
Have separate accounts, within each fund,
which are maintained for each beneficiary or the trust, but for purposes
of investment and management of funds, the trust pools these accounts.
There may
be a separate fund with accounts that include or benefit persons who do
not have a disability.
Contain accounts with the funds of disabled
individuals (based upon SSI and Medicaid rules) that are established solely
for their benefit by a parent, grandparent, or legal guardian of such
individuals, by such individuals, or by a court. If
the account includes a residential dwelling, the individual must reside
in that dwelling, but a spouse, caregiver or housemate can also live there
with the MA applicant/recipient.
Repay MA to the extent that amounts remaining
upon death are not retained by the trust.
This requirement can be satisfied when the individual trust account contains liquid assets and has a balance by returning that amount to the MA program after subtracting a reasonable amount for administrative costs.
This requirement can also be satisfied when the pooled trust account includes real property, and the real property is retained by the pooled trust so long as the property continues to be used by another MA recipient who is disabled (as established under SSI rules) or elderly (age 65 years or older). In addition, if the account contains liquid assets that had been used to help maintain the real property, the account funds may be retained to continue to maintain the housing that will be used by another MA recipient.
This page last updated in Release Number : 05-03
Release Date: 08-29-05
Effective Date: 08-29-05
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