KFMAM Manual - 11/22/2009

03000

                                                                                                  05000

04000: Resources -

04010 - The maximum allowable nonexempt resources of all members of the assistance family group shall not exceed two thousand dollars ($2000) for one person and three thousand dollars ($3000) for two or more persons who are in the family group (excluding SSI recipients).

In determining MA eligibility, the $2000/$3000 standards are applicable where a countable trust arrangement exists in accordance KEESM 5620. For MA CM, a $2000 resource standard is applicable when a countable trust exists.

04020 Family Medical and Medicaid Provisions -

4021 Medicaid Provisions - A revocable or irrevocable trust shall be regarded as an available asset and/or income if the following conditions are met.

4021.01 - For revocable trusts, the value of the trust shall be considered a resource available to the client. Payments from the trust to or for the benefit of the client shall be considered as income.

4021.02 - For irrevocable trusts established by a client after August 10, 1993:

(1) - if there are any circumstances under which payment can be made to or for the benefit of the client, the portion of the trust from which payments can be made shall be considered an available resource. Payments made from the trust to or for the benefit of the client shall be considered as income. Payments made from the trust for any other purpose shall be considered under the transfer provisions of KEESM 5720.

(2) - If payment to the client cannot be made under any circumstances, the creation of the trust shall be considered as a transfer for less than fair market value under the provisions of KEESM 5720 based on the date of establishment of the trust or, if later, the date payment to the client was restricted or foreclosed. If only a portion of the trust is made unavailable in this way, that portion shall be regarded as a transfer.

A client shall be considered to have established a trust if assets of the client were used to form all or part of the trust and if established, other than by will, by the individual, the client's spouse, or any other person or entity, including a court or administrative body, with the legal authority to act for or on behalf of the client or spouse or acting at the direction or upon request of such person. In addition, the provisions of this subsection apply without regard to the purposes for which the trust was established, whether the trustees have or exercise any discretion under the trust, any restrictions on when or whether distributions may be made from the trust, or any restrictions on the use of distributions from the trust. If the trust includes assets of any other person or persons, these provisions shall apply only to the portion of the trust attributable to the assets of the individual.

4021.03 - For irrevocable trusts established with the client's own assets on or prior to August 10, 1993, the trust shall be considered available up to the maximum value of the funds which may be made available under the terms of the trust on behalf of the client if: (1) that client is a beneficiary; and (2) the trustees are permitted to exercise any discretion with respect to distribution to the client. The trust may be established by the client, the client's spouse, a legal guardian (including a parent), or a legal representative who is acting on behalf of the client. The amount from the trust that shall be considered as an available resource is the amount that could be distributed but was not within a base period (e.g., within a month for AM purposes or over a 6-month base period for MS cases). Any amount actually distributed shall be regarded as income. Any portion of the trust which is unavailable to the individual or which is not used for the benefit of the individual shall be considered a transfer of property for less than fair market value under the provisions of KEESM 5720.

NOTE: This provision shall not be applicable to trusts established prior to April 7, 1986 if the applicant/recipient is a mentally retarded individual who is residing in an intermediate care facility for the mentally retarded and the trust is solely for the benefit of the individual.

4021.04 - For all other irrevocable trusts not meeting the criteria of items 4021.02 and 4021.03 above (e.g., with no assets of the applicant/recipient such as a gifted trust or trust established by will), the trust shall be considered in terms of its availability to the individual per the guidelines of KEESM 5200.

04030 Exempted Trusts -

4030 Exempted Trusts - For trusts established after August 10, 1993, the following shall not be considered available as a resource for purposes of determining eligibility.

4030.01 - A trust containing the assets of an individual under age 65 who meets the disability criteria of KEESM 2662 and which is established for the benefit of such individual by the individual's parent, grandparent, conservator, or legal guardian, or by a court. This exemption continues to apply even though the person reaches age 65 and older. As long as the trust was established before age 65, the exemption is applicable. A trust established by the disabled individual or his or her spouse is not exempt under this provision.

4030.02 - A trust containing the assets of an individual who meets the disability criteria of KEESM 2662 if such trust is established by a nonprofit association, a separate account is maintained for each beneficiary of the trust, and the trust is established solely for the benefit of the individual by the individual, parent, spouse, grandparent, legal guardian, or a court.

Payments made from such trusts shall also be exempt unless made available directly to the individual or to the individual’s representative, including, but not limited to, a guardian, a conservator, representative payee, or person holding a power of attorney.

In the above instances, the trust must have a provision whereby any funds that remain in the trust upon the death of the client be provided to the State in an amount up to the amount of medical assistance paid out on that person's behalf. Otherwise, the trust must be considered. In the above instances, there are no exemptions applicable to trusts established on or prior to August 10, 1993 or to trusts established with assets other than the individual's.

4030.03 - A trust established as an Individual Development Account (IDA) for a TAF recipient or a participant in the Assets for Independence Demonstration Program (AFIA). See 5500 for the guidelines of an allowable IDA.