(Revised 4/1/11 ML #3263)
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IM 5235
(N.D.A.C. Sections 75-02-02.1-31 and 75-02-02.1-31.1)
- A trust is an arrangement whereby a person known as the "grantor" or "trustor" gives assets to another person known as the "trustee" with instructions to use the assets for the benefit of a third person known as the "beneficiary". The positions of grantor, trustee, and beneficiary occur in all trusts, but it is not uncommon for a single trust to involve more than one grantor, trustee, or beneficiary. It is also not uncommon for a grantor to establish a trust in which the grantor is also a beneficiary or the trustee is also a beneficiary. The assets placed in trust are called the "principal" or "corpus".
- A trust includes any legal instrument or device, whether or not written, which is similar to a trust. An unwritten trust may arise anytime someone gives property to another with instructions to use the property in a particular way, or anytime someone keeps for his own use property that belongs to another. When this happens, the individual who owned the property is both the grantor and the beneficiary of an unwritten express or implied trust.
- Trusts may, or may not, make income or assets available to an applicant or recipient. Also, when an applicant or recipient creates a trust, assets put into the trust may be a disqualifying transfer. A thorough review of each trust is necessary to determine its effect, if any, on eligibility. Send trusts to the Legal Advisory Unit for review. When trusts are submitted for review, include all appropriate information so the trust may be reviewed in a timely manner. When requesting a review of a trust document:
- Send the complete trust agreement (signed, dated, and notarized) and all pages and attachments;
- If the trust is unwritten, describe the circumstances that you believe created the trust in a letter;
- Provide verification of the value of each asset owned by the trust, when each asset was transferred to the trust, and who transferred the assets to the trust;
- Identify who is applying for which benefits (e.g. Medicaid nursing care, Medicaid no-nursing care, etc.);
- Provide any other documents or information you think may be relevant (like schedules, powers of attorney, financial statements, etc.); and
- Complete and include the Trust Review Document available on the DHS County Intranet website under the "Medicaid-Healthy Steps/Hard Cards/Trust" folder.
- Applicant as trustee.
An applicant or recipient who is a trustee has the legal ownership of trust property and the legal powers to distribute income or trust assets which are described in the trust. However, those powers may be exercised only on behalf of trust beneficiaries. If the trustee or other members of the Medicaid unit are not also beneficiaries or grantors to whom trust income or assets are treated as available, trust assets are not available to the trustee.
