Nursing Home Litigation Generally, Medical Assistance counts a trust as an asset when
calculating eligibility.16 However, federal law governing Medicaid
programs exempts certain special needs trusts from the asset calculation. Tere are four types of federal special needs trusts that can be created by or for an A/R.17
Te two relevant to this article are
the 42 U.S.C. § 1396p(d)(4)(A) trust and the 42 U.S.C. § 1396p(d) (4)(C) trust. Tese trusts must be created to benefit an individual with a disability.18
Under these statutes, an individual is considered
disabled if he or she “is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months.”19
Tese trusts are distinguishable from other
special needs trusts because the A/R funds the trust and is also the sole beneficiary of the trust.20 Te (d)(4)(A) trust is a trust created by someone other than the A/R with the A/R’s funds.21
legal guardian of the A/R, a court, or a person or administrative agency acting at the behest of the court creates the trust.22
Te
16 See MD. CODE REGS.10.09.24.08 Trough .08-2 (2011). 17 Te four types of exempt federal statutory trusts are the 42 U.S.C. § 1396p(d)(4)(A) “exempt pay- back trust,” 42 U.S.C. § 1396p(d)(4)(C) “pooled asset trust,” and the 42 U.S.C. § 1396p(c)(2)(B) (iii) and 42 U.S.C. § 1396p(c)(2)(B)(iv) third-party trusts. For more information on these different types of trusts see Jason Frank, Elder Law In Maryland (Matthew Bender, 2009).
18 See 42 U.S.C. § 1396p(d)(4)(A); 42 U.S.C. § 1396p(d)(4)(C). 19 See 42 U.S.C. § 1382c(a)(3). 20 See 42 U.S.C. § 1396p(d)(4)(A); 42 U.S.C. § 1396p(d)(4)(C). 21 42 U.S.C. § 1396p(d)(4)(A). 22 Id.
trust is created with the A/R’s funds and for the sole benefit of the A/R, who must be under 65 years of age and disabled.23 By comparison, the (d)(4)(C) trust, also known as the pooled asset trust, is a trust managed by a non-profit organization that collectively invests and manages funds of multiple individuals who are disabled, reducing the costs of trust administration.24
and with a separate account maintained for each A/R who is a beneficiary of the trust.25
Te accounts are established by the
A/R, a parent, grandparent, legal guardian of the A/R, or a court or administrative agency, and for the sole benefit of the A/R, who must be disabled at the time of the trust account’s creation.26 Funds in an individual’s account may be used for such
things as travel, education, hobbies and health care not covered by Medical Assistance.27
A parent, grandparent, Te trust may also pay for food and
shelter under the Presumed Maximum Value rule, and private duty nursing, particularly when the nursing home causes problems. Te pooled asset trust has complete discretion to make distributions from each beneficiary’s individual account.28 Tis discretionary power is an important part of why Medical
Assistance treats the funds as unavailable and not countable for 23 Id. 24 42 U.S.C. § 1396p(d)(4)(C). 25 Id. 26 Id. 27 First Maryland Disability Trust, Inc., available at
www.firstmdtrust.org (last visited July 14, 2011). 28 Id.
Te trust must be funded with the A/R’s funds,
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18 Trial Reporter / Fall 2011
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