ü
The trust must be irrevocable.
ü
Trust distributions must be for the sole benefit of the
beneficiary.
ü
Trust distributions must be made only for the
beneficiary's health care, education, comfort, support
or expenditures directly related to these purposes.
ü
The trust must require an annual accounting of itemized
income and expenditures and include the Division of
Recoveries and Financial Services, 201 West Preston
Street, Baltimore Maryland 21201, as a recipient of a
copy of the annual accounting.
ü
The trust must not violate common principles of sound
trust management. The following is a non-exclusive list
of such principles:
Ø
Trustees may not have an interest in property of the
trust or ability to use the trust for their own
benefit.
Ø
Investments should be limited to prudent investments.
Ø
No trust property should be held as an on-going
business or enterprise or held as investments (stocks
or shares) in new or untried enterprises. [This is
per se non-prudent.]
Ø
Trustees may not self-deal by selling or buying trust
property to or from themselves
Ø
Trustees may not loan trust funds to themselves.
ü
The trust must require that any leases or mortgages the
trust may hold must contain a provision that they either
terminate or become due and payable upon the death of
the beneficiary.
ü
Trusts must include a statement that the beneficiary is
disabled as defined in 1614(a)(3) of the Social
Security Act.
ü
The trust corpus may not be added to after the
beneficiary reaches the age of 65.
ü
Compensation to the trustee must be limited in
accordance with Md. Est. & Trusts Code Ann., 14-103.
ü
Trusts must be managed in accordance with Md. Est. &
Trusts Code Ann., 15-502.
ü
The trust cannot permit disbursements to be paid to
Medical Assistance providers as additional compensation
for their services. This includes payments for the
differentials in cost between housing and shelter for
shared and private rooms. Such additional compensation
is prohibited by Medical Assistance law and regulation.
The trust should therefore include the following
language:
ü
The only real property in which the trust may invest is
one home property to be used as a residence by the
beneficiary and to be titled in the name of the trust.
ü
The trust may not make unsecured loans.
ü
Family members may not be compensated for caring for the
beneficiary, accompanying the beneficiary on travel,
providing companionship for the beneficiary, or for
serving as trustees.
ü
The trust may not pay the funeral expenses of the
beneficiary. The trust may include language, however,
enabling the purchase of an irrevocable burial contract.
ü
If the trust purchases a life insurance policy, the
trust must be the only beneficiary.
ü
Trust funds may not be used to purchase gifts for family
and friends of the beneficiary.
ü
Trust assets may not be used to purchase an annuity on
the life of the beneficiary that might make payments
that in some circumstances extend beyond the
beneficiary's death unless that annuity provides that in
the event of the death of beneficiary, the annuity
payments shall by paid to the State of Maryland until
the Medical Assistance Program's claims are completely
paid.
ü
All property valued at more than $500 must be titled in
the name of the trust. Please note, however, that the
trustee must be able to account for all trust property.
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