Speicial Care Trust ?

Typically called a “Special Needs Trust” or “Supplemental Needs Trust,” such trusts are usually established with money from someone other than the individual who is applying for Medicaid. If the individual him- or herself wishes to transfer their own assets to such a trust, the assets will be countable for Medicaid eligibility purposes unless (i) the individual is under age 65 and (ii) the trust contains a payback provision to reimburse the Medicaid program following the death of the individual and (iii) the trust is set up by the individuals’ parent, grandparent, legal guardian, or court.

If the trust does not meet the above requirements, the transfer of money into the trust will be deemed a gift and subject to the five-year lookback period, IF there is no access by the individual to the principal of the trust. On the other hand, if there are ANY circumstances under which the principal of the trust can be distributed back to the person who set up the trust, then 100% of the trust will be deemed an available asset for Medicaid purposes, and the transfer into the trust will NOT be a gift.