23 Miss. Code. R. 103-5.18

Current through December 10, 2024

Rule 23-103-5.18 - Income Trust Legal Forms

A. The Long Term Care Income Trust Agreement will be discussed and provided to the long term care client subject to an Income Trust.

LONG-TERM CARE INCOME TRUST

THE _______________ INCOME TRUST

WHEREAS, __________________________, hereinafter referred to as the Settlor, now has a monthly income that exceeds the current Medicaid income limits, and;

WHEREAS, the total monthly income received by Settlor is not sufficient to pay for expenses associated with long-term care services and related services, and;

WHEREAS, Settlor's other assets have been exhausted by Settlor's long-term care expenses, and;

WHEREAS, the principal purpose of this Trust is to receive all income payments due Settlor in excess of the Settlor's cost of care, including Social Security benefits, retirement benefits, interest, dividends, or other income. The Settlor's cost of care will be determined by the daily rate that Medicaid pays the nursing facility in which the Settlor resides. If the rate for the facility is less than the Settlor's income, the excess income will be used to fund the income trust. If the rate for the facility is more than the Settlor's income, the Settlor's total income, less authorized deductions, will be paid to the nursing facility. Any income in excess of the Settlor's cost of care will be retained as part of the Trust.

WITNESSETH:

This _________________________ Income Trust Agreement is entered into between _____________________, "Settlor", and ______________, "Trustee", who agree as follows:

(A) The Trustee shall place all income in excess of the Settlor's cost of care into the Trust, and the Trustee shall hold such income under the following terms and conditions:

(1) Trustee shall retain the income in excess of the Settler's cost of care in the Income Trust Account.

(2) At the time of each review of the Settlor's Medicaid eligibility (at least annually) while this trust is in existence, if the Settlor's income exceeds the cost of care, the Division of Medicaid will notify the Trustee of the amount that should be accumulated in the trust. The Trustee will then be requested to make payment of this amount to the Division of Medicaid up to the total amount expended by the Division of Medicaid on behalf of the Settlor that has not previously been repaid to Medicaid. Failure to make the requested payments may result in the loss of Medicaid eligibility for the Settlor.

(3) This trust will terminate upon the death of the Settlor; when the Settlor's Medicaid eligibility is terminated; when the Settlor's income no longer exceeds the current Medicaid income limits; or when the trust is otherwise terminated. At that time, any income amounts accumulated in the trust shall be paid over to the Division of Medicaid, State of Mississippi, up to the total amount expended by the Division of Medicaid on behalf of the Settlor that has not previously been repaid to Medicaid

(B) When requested, the Trustee shall furnish to the Division of Medicaid, State of Mississippi, an annual accounting to show all receipts and disbursements of the trust during the prior calendar year.

(C) The Trustee shall maintain the trust funds on deposit in a federally insured banking institution.

No Trustee shall receive a Trustee's fee for services rendered to the trust, however, reasonable bank charges will be allowed. The Trustee shall give written notice to the Division of Medicaid, State of Mississippi when the Settlor dies or when the trust is otherwise terminated.

(F) The provisions of this Trust shall be interpreted under the laws of the State of Mississippi.

The effective date of this trust shall be __________________________________.

IN WITNESS WHEREOF, this ____________________________ Income Trust Agreement has been executed on this the _____ day of __________, 20___.

___________________________________

Trustee

___________________________________

Settlor

STATE OF _________________

COUNTY OF _______________

Personally appeared before me, the undersigned authority in and for said county and state, on the ______ day of ______, 20___, within my jurisdiction, the within named ____________________, who acknowledged that (he) (she) executed the above and foregoing instrument.

___________________________

(NOTARY PUBLIC)

MY COMMISSION EXPIRES:

STATE OF _________________

COUNTY OF _______________

Personally appeared before me, the undersigned authority in and for said county and state, on the _____ day of __________, 20___, within my jurisdiction, the within named ________________, who acknowledged that (he) (she) (they) executed the above and foregoing instrument.

____________________________

(NOTARY PUBLIC)

MY COMMISSION EXPIRES:

TRUSTEE INFORMATION:

NAME: ____________________ SSN: ____________________

TELEPHONE NUMBER: ____________________

ADDRESS: ________________________________

________________________________

RELATIONSHIP TO SETTLOR: ____________________

(Rev 6/08)

B. The Long Term Care Income Trust Help Sheet will be discussed and provided to the long term care subject to an Income Trust.

INCOME TRUST HELP SHEET

Section 1917 (d) of the Social Security Act (42 U.S.C. § 1396 p (d) (4)) defines certain provisions that qualify as an exception for the purpose of an individual qualifying for Medicaid benefits. One such exception is an "Income Trust". This type of trust, established for the benefit of an individual in a nursing facility, must meet the following requirements.

1. The purpose of the trust is to allow an individual with excess income who has exhausted all available resources to become eligible for Medicaid. The trust may be used only for income belonging to the individual. No resources (assets) may be used to establish or augment the trust. Inclusion of resources voids the trust exception.

2. Funds subject to the trust are all income due the individual from all sources such as Social Security, pension benefits, interest and any and all other types/sources of income.

3. Income Trusts, once accepted by Medicaid, cannot be modified without Medicaid's approval. Trusts must specify that the trust will terminate at the individual's death, when Medicaid eligibility is terminated, when the trust is no longer necessary or in the event the trust is otherwise terminated. Trusts may need to be terminated prior to an individual's death due to changes in the client's income or changes in Medicaid policy regarding how certain income must be counted or in the event the individual is discharged from the nursing facility.

4. If the income of the Settlor is less than Settlor's cost of care at the nursing facility, all income of the Settlor, less authorized deductions, must be paid directly to the nursing facility. In that case no funds will be retained in the Trust. If the income of the Settlor exceeds the cost of care at the nursing facility, the Trust must retain the income in excess of the cost of care.

5. At the dissolution or termination of the trust, the death of the Settlor, loss of the Settlor's Medicaid eligibility or in the event that the Settlor's income no longer exceeds the current Medicaid income limits, the trust agreement must provide that all amounts remaining in the trust up to an amount equal to the total medical assistance paid by Medicaid on behalf of the individual that has not previously been repaid will be paid to the Division of Medicaid.

6. In addition the trust agreement must provide that at the time of each review of the Settlor's Medicaid eligibility (at least annually) while this trust is in existence, when notified by Medicaid, the Trustee must pay to the Division of Medicaid the amount that should be accumulated in the trust up to the amount expended by the Division of Medicaid on behalf of the Settlor that has not previously been repaid. Failure to make the requested payments may result in the loss of Medicaid eligibility for the Settlor.

7. The trust agreement must provide for an accounting to be sent to the Division of Medicaid when requested to show all receipts and disbursements of the trust during the prior calendar year when requested by Medicaid.

8. No fees are allowed to be paid to the Trustee for their service. In the event funds are retained in the trust, administrative fees are limited to $10 per month and are intended to cover any bank charges required to maintain the trust account.

9. Any disbursements not approved by Medicaid or provided for by the trust agreement will result in a loss of the trust exemption.

10. The trust instrument must specify an effective date. Unless the applicant is requesting retroactive eligibility of up to 90 days (which will require that the applicant have the funds necessary to fund the trust for that period) the effective date will be the date of execution. If a retroactive date is being sought the effective date will be determined through consultation with the Medicaid Regional Office. In that case the Regional Office should be consulted to determine the effective date prior to execution of the agreement.

11. Medicaid requires that the trust document be filed in the records of the Chancery Clerk. An Income Trust is a very simple trust that accomplishes the specific goal of receiving income and disbursing it for the sole purpose of allowing an individual in a nursing facility with income in excess of Medicaid income limits to qualify for Medicaid. It is not intended to be a complex fiduciary trust. For more information, attorneys drafting an Income Trust may contact the Division of Medicaid's Legal Unit at (601) 359-6050.

C. The Home and Community Based Services Waiver (HCBS) Income Trust Agreement will be discussed and provided to the HCBS client subject to an Income Trust.

HOME AND COMMUNITY BASED SERVICES WAIVER (HCBS) INCOME TRUST

THE _______________ INCOME TRUST

WHEREAS, __________________________, hereinafter referred to as the Settlor, now has a monthly income that exceeds the current Medicaid income limits, and;

WHEREAS, Settlor's other assets have been exhausted by the expenses of the Settlor's care, and; WHEREAS, the principal purpose of this Trust is to receive all income payments due Settlor, including Social Security benefits, retirement benefits, interest, dividends, or other income, and to allow the Trustee to expend for the benefit of the Settlor each month an amount equal to no more than $1.00 less than the then current Medicaid limit, with any excess income to be retained as a part of the Trust. WITNESSETH:

This _________________________ Income Trust Agreement is entered into between _____________________, "Settlor", and ______________, "Trustee", who agree as follows:

(A) The Trustee shall place all income due the Settlor into the Trust, and the Trustee shall hold such income under the following terms and conditions:

(1) Trustee shall distribute to the Settlor, or for Settlor's benefit, any amounts allowed by the Division of Medicaid, but the total amount distributed each month shall not exceed an amount equal to $1.00 less than the then current Medicaid income limit.

(2) At the time of each review of the Settlor's Medicaid eligibility (at least annually) while this trust is in existence, the Division of Medicaid will notify the Trustee of the amount that should be accumulated in the trust. The Trustee will then be requested to make payment of this amount to the Division of Medicaid up to the total amount expended by the Division of Medicaid on behalf of the Settlor that has not previously been repaid to Medicaid. Failure to make the requested payments may result in the loss of Medicaid eligibility for the Settlor.

(3) This trust will terminate upon the death of the Settlor; when the Settlor's Medicaid eligibility is terminated; when the Settlor's income no longer exceeds the current Medicaid income limits; or when the trust is otherwise terminated. At that time, any income amounts accumulated but undistributed shall be paid over to the Division of Medicaid, State of Mississippi, up to the total amount expended by the Division of Medicaid on behalf of the Settlor that has not previously been repaid to Medicaid.

(C) The Trustee shall maintain the trust funds on deposit in a federally insured banking institution. No Trustee shall receive a Trustee's fee for services rendered to the trust, however, reasonable bank charges will be allowed. The Trustee shall give written notice to the Division of Medicaid, State of Mississippi when the Settlor dies or when the trust is otherwise terminated.

(F) The provisions of this Trust shall be interpreted under the laws of the State of Mississippi.

The effective date of this trust shall be _______________________________.

IN WITNESS WHEREOF, this ____________________________ Income Trust Agreement has been executed on this the _____ day of __________, 20___.

___________________________________

Trustee

___________________________________

Settlor

STATE OF _________________

COUNTY OF _______________

___________________________

(NOTARY PUBLIC)

MY COMMISSION EXPIRES:

STATE OF _________________

COUNTY OF _______________

____________________________

(NOTARY PUBLIC)

MY COMMISSION EXPIRES:

TRUSTEE INFORMATION:

NAME: ____________________ SSN: ____________________

TELEPHONE NUMBER: ____________________

ADDRESS: ________________________________

________________________________

RELATIONSHIP TO SETTLOR: ____________________

D. The Home and Community Based Services Waiver (HCBS) Income Trust help Sheet will be discussed and provided to the HCBS client subject to an Income Trust.

INCOME TRUST HELP SHEET

Section 1917 (d) of the Social Security Act (42 U.S.C. § 1396 p (d) (4)) defines certain provisions that qualify as an exception for the purpose of an individual qualifying for Medicaid benefits. One such exception is an "Income Trust". This type of trust, established for the benefit of an individual participating in a Home and Community Based Services (HCBS) waiver, must meet the following requirements.

1. the purpose of the trust is to allow an individual with excess income who has exhausted all available resources to become eligible for Medicaid. The trust must be composed only of income belonging to the individual. No resources may be used to establish or augment the trust. Inclusion of resources voids the trust exception.

2. The trust must be composed only of income due the individual from all sources such as Social Security, pension benefits, interest and any and all other types/sources of income. The individual's right to receive income should not be transferred to the trust; instead, the individual must first receive the income and then place it into the Income Trust.

3. Income Trusts, once qualified, cannot be modified without the approval of the Division of Medicaid. Trusts must specify that the trust will terminate at the individual's death, when Medicaid eligibility is terminated, when the trust is no longer necessary or in the event the trust is otherwise terminated. Trusts may need to be terminated prior to an individual's death due to changes in the client's income or changes in Medicaid policy regarding how certain income must be counted or in the event the individual is discharged from the nursing facility.

4. The Trust must distribute to the Settlor, or for his/her benefit, an amount equal to not more than $1 less than the then current Medicaid income limit as approved by Medicaid. The trust should not specify the amount of the individual's income as this amount may change each year and the amount to be released from the trust will change to an amount equal to $1 less than the current Medicaid income limit.

8. No fees are allowed to be paid to the Trustee for their service. Administrative fees are limited to $10 per month intended to cover any bank charges required to maintain the trust account.

9. Any disbursements not approved by Medicaid or provided for by the trust agreement will result in a loss of the trust exemption.

11. Medicaid requires that the trust document be filed in the records of the Chancery Clerk.

An Income Trust is a very simple trust that accomplishes the specific goal of receiving income and disbursing it for the sole purpose of allowing an individual participating in a Home and Community Based Services (HCBS) waiver with income in excess of Medicaid income limits to qualify for Medicaid. It is not intended to be a complex fiduciary trust. For more information, attorneys drafting an Income Trust may contact the Division of Medicaid's Legal Unit at (601) 359-6050.

23 Miss. Code. R. 103-5.18

USC §1396p(d)(4); Social Security Act §1917(d); Miss. Code Ann. § 43-13-121.1 (Rev. 2005).