F-6200, Medicaid-Qualifying Trust

Revision 09-4; Effective December 1, 2009

A Medicaid-qualifying trust (MQT) is one that the person, his spouse, guardian or anyone holding his power of attorney establishes using the person's money. The person is the beneficiary of a Medicaid-qualifying trust. A Medicaid-qualifying trust is one that was established between June 1, 1986, and Aug. 10, 1993. Trusts which meet the MQT definition and were established prior to June 1, 1986, are treated as standard inter vivos trusts.

Note: Public Law 103-66 (OBRA '93) revised policy for trusts established using the person's money on or after Aug. 11, 1993.

For Medicaid-qualifying trusts established before that date, continue using the policy in this section. If provisions for a change in the trust were included in the document before Aug. 11, 1993, use the policy governing Medicaid-qualifying trusts for the change. If the trust was amended on or after Aug. 11, 1993, apply the policy in F-6300, Trusts (Aug. 11, 1993, and After).

Public Law 99-272 states that distributions from Medicaid-qualifying trusts are considered available to the person whether or not distributions are actually made. The amount available is the maximum amount the trustee could disburse if he used his full discretion under terms of the trust. If distribution is not made, the maximum amount the trustee may distribute if he used his full discretion under terms of the trust is considered an available resource. If trusts do not specify an amount for distribution, and if the trustee has access to and use of the principal or the income from the trust, then the entire amount is considered an available resource that may be used for the person's benefit.

Examples:

  • The trustee has the discretion to distribute the corpus of the trust, which is property worth $6,000. The corpus, therefore, is a $6,000 countable resource.
  • The person established an irrevocable Medicaid-qualifying trust before Aug. 11, 1993. The trustee has discretion only to distribute $100 monthly from the income earned by the trust but chooses not to do so. The corpus is not a countable resource; however, the person's other countable resources are increased by $100 every month. If necessary, schedule a special review to monitor eligibility.

F-6210 Zebley Cases

Revision 09-4; Effective December 1, 2009

A Medicaid-qualifying trust established for a minor child using the lump sum payment received in settlement of Zebley vs. Sullivan is excluded from all consideration of eligibility under undue hardship provisions. Undue hardship exists because the person would otherwise be forced to spend the settlement funds on services now covered by Medicaid when the funds will be needed once the person reaches majority. A trust established using Zebley settlement funds is excluded under undue hardship policy, even when the trust is set up on or after Aug. 11, 1993.

Zebley funds may be used to establish pooled trusts detailed in F-6700, Exception Trusts.