Texas Administrative Code
Title 1 - ADMINISTRATION
Part 15 - TEXAS HEALTH AND HUMAN SERVICES COMMISSION
Chapter 358 - MEDICAID ELIGIBILITY FOR THE ELDERLY AND PEOPLE WITH DISABILITIES
Subchapter C - FINANCIAL REQUIREMENTS
Division 2 - RESOURCES
Section 358.339 - Treatment of Trusts on and after August 11, 1993

(1) A limited partnership is a "similar legal device" to a trust. In accordance with the definition of a trust in §1917(d)(6) of the Social Security Act (RSA 1396p(d)(6)), HHSC treats a limited partnership as a trust and applies the provisions of this section to a limited partnership. The general partners of a limited partnership act as trustee, and the limited partners are the equivalent of beneficiaries of an irrevocable trust. To the extent that the general partners can make each limited partner's ownership interest available to him, that interest is a countable resource and not a transfer of assets. However, a transfer of assets has occurred to the extent that:

(2) If transfer-of-assets provisions apply, a limited partnership is not considered a trust instrument when determining the look-back period.

(1) A QIT is an irrevocable trust established for the benefit of a person or the person's spouse, or both, the corpus of which is composed only of the person's or the couple's income (including accumulated income). The trust must include a provision that the State is designated as the residuary beneficiary to receive, at the person's death, funds remaining in the trust equal to the total amount of Medicaid paid on the person's behalf.

(2) Characteristics of a QIT are as follows:

(3) A QIT is not counted as a resource.

(4) Income directed to a QIT is not counted when testing eligibility for services in an institutional setting.

(5) If the trust instrument requires that the income placed in the trust must be paid out of the trust for the person's care in an institutional setting, transfer-of-assets provisions do not apply because the person receives fair market value for the income that was placed into the trust. However, if there is no such requirement or the income is not used for the person's care, transfer-of-assets provisions apply. The income must be paid out by the end of the month after the month funds were placed in the trust to avoid application of the transfer-of-assets provisions. Transfer-of-assets provisions do not apply when the QIT provisions allow payments to or for the benefit of the person's spouse.

(6) The institutional setting co-payment amount is based on the person's total income (income directed to the trust as well as income not directed to the trust), minus the standard co-payment deductions. Costs of trust administration are not budgeted in the co-payment calculation. Transfer-of-assets provisions do not apply when legal and accounting fees necessary to maintain the trust are paid from the trust.

(7) HHSC disregards the income placed in a QIT for eligibility purposes for the first month that the person has a valid signed trust and enough income is placed in the account to reduce the remaining income below the special income limit.

(1) As provided under §1917(d) of the Social Security Act (RSA 1396p(d)(5)), this section does not apply if application of the trust provisions in this section would work an undue hardship on the person. Undue hardship exists if application of the trust provisions would:

(2) Undue hardship does not exist if a person is inconvenienced or must restrict his or her lifestyle but is not at risk of serious deprivation. Undue hardship relates to hardship to the person, not to relatives or authorized representatives of the person.

(3) Before requesting a waiver of the trust provisions on the grounds of undue hardship, a person must make reasonable efforts to recover assets placed in a trust, such as petitioning the court to dissolve the trust. HHSC determines undue hardship after receiving a request for a waiver of the trust provisions on the grounds of undue hardship. The person has the right to appeal HHSC's determination on undue hardship.