5621 Exempted Trusts - For trusts established after August 10, 1993, the following shall not be considered available as a resource for purposes of determining eligibility.
A trust containing the assets of an individual under age 65 who meets the disability criteria of 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.
In addition, trusts established on or after 12-13-2016 by a disabled individual meeting the requirements of this provision shall not be considered an available resource. A trust established by the disabled individual’s spouse is not exempt.
A trust containing the assets of an individual who meets the disability criteria of 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.
A trust established as an Individual Development Account (IDA) for a TANF recipient or a participant in the Assets for Independence Demonstration Program (AFIA). See 6410 for the guidelines of an allowable IDA.
5622 Hardship Provision - For irrevocable trusts established after August 10, 1993 and which are not exempted, if consideration of the trust results in ineligibility for the individual, the provisions of 5620 shall be waived if such action is necessary to avoid undue hardship. In order to grant hardship, the individual must verify that he or she has exhausted all legal remedies for gaining complete access to the principal as well as income of the trust and that all other nonexempt assets have been expended to meet living and medical expenses, including those amounts protected under the allowable resource levels. (See 5130.)
There is no hardship provision for trusts established on or before August 10, 1993.