The Oklahoma Bar Journal February 2024

headstones and grave openings and closings; assets in a (d)(4)(A) or (d)(4)(C) trust; assets in a third party trust; and money in an Achieving a Better Life Experience (ABLE) account. 11 Regardless of age, there is a $2,000 cap on countable assets. The assets of a parent who lives with a child are deemed to the child when determining asset eligibility. 12 Trusts 42 U.S.C. §1396p(d)(4)(A). Assets of a trust are countable assets if the trust was established by or for a disabled person and funded with their assets. 13 There are two exceptions. The first is that the assets of a trust comply ing with 42 U.S.C. §1396p(d)(4) (A) are not countable for SSI or Medicaid. 14 A (d)(4)(A) trust must be established for the benefit of a person under 65 who is dis abled, as determined by the SSA; be established by the disabled person, their parent, grandparent, guardian or a court; contain only assets owned by the disabled beneficiary; be irrevocable; be unamendable without the agree ment of the Department of Human Services (DHS) or the Oklahoma Health Care Authority (OHCA); and the trust’s assets and income must be used for the sole benefit of the disabled beneficiary. Money left in the trust at the beneficiary’s death goes to pay back Medicaid for all expenditures made during the person’s life. Theoretically, a family or charity can receive assets of a (d)(4)(A) or (d)(4)(C) trust (see below) after Medicaid has been reimbursed, but this happens very rarely. Almost without exception, Medicaid’s reimbursement claim is more than trust assets remain ing at the beneficiary’s death. 15

A person with disabilities who receives SSI and/ or Medicaid should never directly inherit money. If they inherit, the only way they can stay on benefits is to establish a (d)(4)(A) or (d)(4)(C) trust, which will almost never be able to be passed on to family or charity when the beneficiary dies.

A (d)(4)(A) trust can have an indi vidual or corporate trustee. If the trustee of a (d)(4)(A) trust gives the beneficiary cash or makes payments for items that count as income, the SSI payment is reduced accordingly. Therefore, it is in the beneficiary’s best interest to pay for “income” items with their SSI payment and for the (d)(4)(A) trust to pay for items that are not treated as income. A thing to keep in mind when drafting a (d)(4)(A) trust is that the beneficiary may outlive the trustee, or the trustee may decline to serve. Therefore, include a provision in the trust that allows the assets of the trust to be paid over to a (d)(4)(C) trust. Also, drafting should include a provision that trust assets can be deposited in an ABLE account. 42 U.S.C. §1396p(d)(4)(C). The second exception to counting a self funded trust as an asset is found at 42 U.S.C. §1396p(d)(4)(C), known as a “pooled trust.” 16 It is created and operated by a nonprofit, which forms a master trust. The nonprofit accounts for individuals’ money separately but pools the money for investment.

Joinder agreements are executed to establish an individual account, which are supplied by the trust. An account must be established by the disabled individual, their parent, grandparent, guardian or a court. 17 The person who establishes the individual account appoints someone close to the beneficiary to advise the trustee on disburse ments. When the beneficiary dies, the nonprofit may retain up to 30% of what remains in the trust, and the rest goes to repay Medicaid. 18 Like a (d)(4)(A) trust, if the trustee of a (d)(4)(C) trust gives the benefi ciary cash or makes payments for items that count as income, then the SSI payment is reduced accordingly. Therefore, it is in the beneficiary’s best interest to pay for “income” items with their SSI payment and for the (d)(4)(C) trust to pay for items not treated as income. Third-party trusts. A third party trust is established by some one other than the beneficiary or their spouse and funded with assets the beneficiary never had the right to have in their hands. 19 Assets of

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

18 | FEBRUARY 2024

THE OKLAHOMA BAR JOURNAL