I. INTRODUCTION
On April 6, 2007, claimant D~’s (D~) legal guardian executed a J~ Agreement (P~) establishing
an account for P~ in the Jewish Family & Children’s Services of Southern Arizona Pooled
Trust (JFCS Trust). On November 15, 2012, claimant J~ (J~) also executed a Joinder
Agreement (L~) establishing an account for himself in the JFCS Trust.
On November 25, 2013, JFCS and Secured Futures, Inc. (Secured Futures) entered into
an Agreement (Trustee Agreement) under which Secured Futures became a co-trustee of
the JFCS Trust effective January 31, 2014 and JFCS resigned as co-trustee effective
February 1, 2014. Trustee Agreement, ¶¶ 1, 2.
Under the Trustee Agreement, Secured Futures, as successor trustee, “shall operate
the [the JFCS Trust] in accordance with the provisions therein and in accordance with”
the Secured Futures Pooled Special Needs Trust (SF Trust). Trustee Agreement, ¶ 3.
In the event of a conflict between the JFCS Trust and the SF Trust, the JFCS Trust
“shall govern and control.” Trustee Agreement, ¶ 3. The Trustee Agreement states that
“[u]pon JFCS’s resignation as Co-Trustee, the Beneficiaries shall become beneficiaries
of the [SF Trust]” but does not require those beneficiaries to execute Joinder Agreements
for the SF Trust. Trustee Agreement, ¶ 4.
P~ and L~ did not execute Joinder Agreements for the SF Trust.
II. QUESTION
The P~ and L~ trust accounts are not excepted from resource counting under § 1917(d)(4)(C)
of the Act. Specifically, the accounts are subject to the terms of the JFCS Trust,
which does not provide for reimbursement to all states that provided medical assistance to the respective beneficiaries during their
lifetimes.
III. SHORT ANSWER
The P~ and J~ trust accounts are not excepted from resource counting under § 1917(d)(4)(C)
of the Act. Specifically, the accounts are subject to the terms of the JFCS Trust,
which does not provide for reimbursement to all states that provided medical assistance to the respective beneficiaries during their
lifetimes.
IV. RELEVANT TRUST PROVISIONS
A. JFCS Trust
The Jewish Family & Children’s Services of Southern Arizona, Inc. (JFCS) established
the JFCS Trust on January XX, 2005. On November XX, 2007, JFCS amended and restated
the trust.
Article II, Trustee, states that JFCS, a non-profit association, is the trustee of the JFCS Trust. JFCS
Trust, Art. II.
Article III, Beneficiary, provides that beneficiaries are disabled individuals who have accounts with the
trust; an individual is eligible to participate in the trust if the Social Security
Administration (SSA) has determined he or she is disabled or if the Trustee finds
that the individual is disabled as defined in the Social Security Act. JFCS Trust,
Art. III.
Article V, Irrevocability and Amendment, provides that the trust is irrevocable, although it may be amended by the trustee
if necessary to carry out the purposes of the trust or to comply with the requirements
of federal or state law to accomplish the purposes of the trust. JFCS Trust, Art.
V.
Article VI, Trust Property, states that each beneficiary shall have a separate sub-account solely for his/her
benefit. JFCS Trust, Art. VI.A, C & D. To join the trust, a beneficiary (or parent,
grandparent or legal guardian) must sign a Joinder Agreement (Joinder). JFCS Trust,
Art. VI.B. The Trustee may pool individual sub-accounts for investment and management
purposes. JFCS Trust, Art. VI.C. Trust property may not be refunded or withdrawn by
the beneficiary or donor once accepted by the trustee and deposited into the trust.
JFCS Trust, Art. VI.E (stating “such property transferred shall become irrevocably
part of the trust”).
Article VIII, Distributions, addresses how sub-account assets may be used. It provides that the trustee may,
in its sole discretion, distribute sub-account income or principal for the beneficiary’s
supplemental needs but not for his/her primary support or to supplant or replace public
assistance benefits. JFCS Trust, Art. VIII.A-D. Sub-account distributions are to be
made to or for the benefit of the beneficiary – and no other persons – during his/her
lifetime. JFCS Trust, Art. VIII.E. Distributions may also be made to pay trustee compensation,
expenses, and taxes. JFCS Trust, Art. VIII.F.1-3.
Article IX, Distributions Upon the Death of a Beneficiary, addresses disposition of sub-account assets when a beneficiary dies. It provides
that, upon the death of a beneficiary, any amounts remaining in his/her sub-account
will be retained by the trust in a general account as “surplus trust property” to
be used (1) for the benefit of other beneficiaries, or (2) to aid, provide housing,
or provide supplemental support services to persons who are indigent and disabled
as defined in the Social Security Act. JFCS Trust, Art. IX.A. To the extent the trust
does not retain any amounts in the deceased beneficiary’s sub-account, the trustee
will “pay to the State (AHCCCS) from such remaining amounts in the account an amount
equal to the total amount of medical assistance paid on behalf of the beneficiary
under the State’s plan under 42 U.S.C. § 1396(a) et seq.” JFCS Trust, Art. IX.B.
Article XI, Spendthrift Provision, prevents beneficiaries from demanding or directing payment of trust principal or
income. It also provides that beneficiaries’ interests shall not be subject to transfer,
assignment, or creditors’ claims. JFCS Trust, Art. XI.
Article XII, Construction and Interpretation, states that the trust shall be construed and interpreted in accordance with Arizona
State law. JFCS Trust, Art. XII.A. If a beneficiary moves from Arizona to another
State and qualifies for SSI or Medicaid benefits in such other State, “references
to Arizona or to State in this trust shall also apply to the other State, but the
rights of the State of Arizona (AHCCCS) as a remainder beneficiary after the death
of any individual beneficiary shall be retained.” JFCS Trust, Art. XII.B.
B. SF Trust
Secured Futures established the SF Trust on May 30, 2008. Secured Futures amended
and restated the SF Trust on February 27, 2009.
Article One defines “beneficiary” as a disabled person within the meaning of 42 U.S.C.
§ 1382c(a)(3) (Social Security Act § 1614(a)(4)) who has a “Beneficiary Trust Share”
account, which is defined as the share or portion of the trust held for the individual
beneficiary. [2]
Article Two, Purpose and Establishment of the Trust, states that the trust’s purpose is to hold the funds of disabled persons for their
supplemental needs. SF Trust, Art. Two, § 2.1. Beneficiaries’ funds may be combined
for investment and administration purposes, but are deemed to be the share of, and
for the benefit of, each individual beneficiary. SF Trust, Art. Two, § 2.2. The trust
shall be effective as to any beneficiary upon execution of a Joinder by the beneficiary
or other grantor, approval of the Joinder by the trustee, and delivery to the trustee
of assets. SF Trust, Art. Two, § 2.3.
Article Five, Irrevocable Trust, states that the trust shall be irrevocable, subject to the trustee’s right to amend
the trust under limited circumstances. SF Trust, Art. Five.
Article Six, Establishment, Administration and Disposition of Beneficiary
Trust Shares, covers the creation of an individual sub-account, its administration, and its disposition
upon the death of the beneficiary, as follows:
Establishment: A beneficiary trust share is created upon the execution of a Joinder by the beneficiary
(or other grantor), the trustee’s acceptance of the Joinder, and delivery to the trustee
of assets for the sub-account. SF Trust, Art. Six, § 6.1.
Administration: The sub-account is to be used for the beneficiary’s supplemental needs during his/her
lifetime and shall not supplant or replace government benefits. SF Trust, Art. Six,
§ 6.2. All sub-account deposits are irrevocable and non-refundable. SF Trust, Art.
Six, § 6.4. The trustee has discretion in making distributions for the beneficiary’s
benefit; disbursements may not be assigned or compelled by a beneficiary and sub-account
assets may not be made available to his/her creditors. SF Trust, Art. Six, §§ 6.2,
6.6, 6.7.
Disposition upon the death of the beneficiary: Upon the death of the beneficiary, any amounts remaining in his/her sub-account
shall be used, in the trustee’s discretion, (1) for the benefit of other beneficiaries
of the SF Trust, or (2) to provide disabled persons with equipment, medication or
services. SF Trust, Art. Six, § 6.12. To the extent sub-account funds are not retained
by the trust, such funds shall be used to “repay the Medical Assistance paid by all
states on behalf of the Beneficiary under the State Plan under Title XIX of the Social
Security Act after allowable administrative expenses and taxes are paid.” SF Trust,
Art. Six, § 6.13. After repayment of the medical expenses and payment of expenses
and taxes, any funds remaining will be paid to beneficiaries named in the Joinder.
Article Seven, Trustee to Trustee Transfers, addresses the early termination of a beneficiary’s sub-account if the trustee believes
either that it cannot fulfill its fiduciary duties to a beneficiary or that the sub-account
may become liable for a beneficiary’s basic maintenance and support. SF Trust, Art.
Seven, § 7.1. Under such circumstances, the trustee has discretion to transfer the
subaccount to (1) a comparable non-profit pooled trust organized under 42 U.S.C. §
1396p(d)(4)(C), [3] or (2) a private special needs trust organized under 42 U.S.C. § 1396p(d)(4)(A).
SF Trust, Art. Seven, § 7.1(a) & (b).
Article Nine, Termination of the Trust during the Beneficiary’s
Lifetime, permits the trustee to terminate the trust if it becomes impossible or impracticable
to meet the trust’s objectives due to changes in the law or other unforeseen situations.
SF Trust, Art. Nine, § 9.1. Under such circumstances, the trustee may terminate the
trust agreement and transfer the sub-accounts to another pooled trust or individual
special needs trust as provided in Article Seven. SF Trust, Art. Nine, § 9.1. Any
funds not transferred to another trust will be used to repay the medical assistance
paid by all States on behalf of the beneficiary and any amounts remaining will be
distributed to the beneficiary. SF Trust, Art. Nine, § 9.2.
C. Arizona Amendment to the SF Trust
On August 24, 2012, Secured Futures further amended the trust to conform with certain
provisions of Arizona State law through the Arizona Amended Secured Futures Pooled
Special Trust Agreement (Arizona Amendment).
Paragraph 2 states that the SF Trust shall comply with certain provisions of Arizona
law. The Arizona Amendment controls if there are conflicts between Arizona law and
the trust. Ariz. Amend., ¶ 2.
Paragraph 3 states that the Arizona State Medicaid agency shall be the primary beneficiary
of the sub-account if the trust is terminated before or upon the death of the trust
beneficiary. Ariz. Amend., ¶ 3.
Paragraph 7 states that the trust share account established for a beneficiary “shall
be for the benefit of the trust beneficiary.” Ariz. Amend., ¶ 7.
The Arizona Amendment ratified and reaffirmed the SF Trust in all other respects and
stated it shall remain in full force and effect.
V. RELEVANT AUTHORITIES
A. Social Security Act
When determining eligibility for SSI, a trust established after January 1, 2000 with
an individual’s assets for his or her own benefit is considered a resource under §§
1613 and 1917 of the Act. Social Security Act §§ 1613(e), 1917(d). A trust established
with the assets of a disabled individual that is part of a pooled trust may be exempted
and not counted as a resource under certain circumstances. Social Security Act §§
1613(e)(5), 1917(d)(4)(C). To meet this exception: (1) the trust must be managed by
a non-profit association; (2) a separate account must be maintained for each beneficiary
of the trust; (3) accounts in the trust must be established for the sole benefit of
the beneficiaries by a parent, grandparent, legal guardian, by the beneficiaries themselves,
or by a court; and (4) upon the beneficiary’s death, the trust must pay the State
from any remaining trust balance the total amount of medical assistance paid on behalf
of the deceased beneficiary during his or her lifetime. Social Security Act § 1917(d)(4)(C).
B. Program Operations Manual System (POMS)
Additional guidance is provided in Program Operations Manual System (POMS) SI 01120.201 (Trusts Established with the Assets of an Individual on or after 1/1/00) and POMS
SI 01120.203 (Exceptions to Counting Trusts Established on or after 1/1/00). As a general rule,
a trust established after January 1, 2000, with the assets of an individual, for his
or her own benefit – even if irrevocable – must be counted as a resource. POMS SI 01120.201. Consistent with the Act, however, POMS recognizes there are exceptions, including
trusts established to meet the needs of disabled individuals under § 1917(d)(4)(C)
of the Act. See POMS SI 01120.201, SI 01120.203.
To satisfy the pooled trust exception, the trust must be established by an organization
that has been established and certified under a State nonprofit statute. POMS SI 01120.203.B.2.c; see Social Security Act § 1917(d)(4)(C)(i). The trust also must maintain a separate account
for each trust beneficiary, although the funds may be pooled for investment and management
purposes. POMS SI 01120.203.B.2.d; see Social Security Act § 1917(d)(4)(C)(ii).
POMS also explains that “the trust must contain specific language that provides that,
to the extent that amounts remaining in the individual’s account upon death of the
individual are not retained by the trust, the trust pays to the State(s) from such
remaining amounts in the account an amount equal to the total amount of medical assistance
paid on behalf of the individual under the State Medicaid plan(s).” POMS SI 01120.203.B.2.g; see Social Security Act § 1917(d)(4)(C)(iv). Further, the trust must provide reimbursement
to any State(s) that may have provided medical assistance under the State Medicaid
plan(s) and payback may not be limited to any particular State(s) or period of time,
such as after establishment of the trust. POMS SI 01120.203.B.2.g.
The agency has interpreted “the sole benefit” requirement of § 1917(d)(4)(C) of the
Act to mean the trust cannot benefit anyone but that individual from the time of the
trust’s establishment through the remainder of the individual’s life. POMS SI 001120.201.F.2.a;
see Social Security Act § 1917(d)(4)(C)(iii). Therefore, aside from payments for goods
or services for the trust beneficiary and reasonable administrative expenses, the
trust must not (1) provide a benefit to any other individual or entity during the
disabled individual’s lifetime, or (2) allow for termination of a trust account prior
to the individual’s death and payment of the assets to another individual or entity.
POMS SI 01120.203.B.2.e. Thus, if the trust contains an early termination clause, it might not be excepted
as a resource. See POMS SI 01120.203.B.2.e.
POMS SI 01120.199.F (Early Termination Provisions and Trusts) provides additional guidance as to when
an early termination clause renders a trust a countable resource. Trusts established
with the resources of an individual that contain an early termination clause are not
to be counted as a resource if: (1) the State is designated to receive all amounts
remaining in the trust at the time of termination up to the total amount of medical
services paid on behalf of the beneficiary by the State, (2) after reimbursement to
the State, all remaining funds are to be distributed to the beneficiary with the exception
of certain specified expenses, and (3) the beneficiary does not have the power to
terminate the trust. POMS SI 01120.199.F. 1. For a pooled trust established under § 1917(d)(4)(C) of the Act, the trust
need not meet the above criteria to be excepted as a resource if the early termination
clause (1) “solely allows for transfer of the beneficiary’s assets from one [pooled]
trust to another [pooled] trust,” and (2) contains specific language precluding disbursements
other than to the secondary trust (or for the payment of taxes or reasonable administrative
expenses). POMS SI 01120.199.F.2.
VI. ANALYSIS
As discussed in part A below, it appears that the JFCS Trust is the operative trust
for P~ and L~, with Secured Futures serving as trustee; the provisions of the JFCS
Trust are discussed in part B of this section.
A. The JFCS Trust Is the Operative Trust for P~ and L~
The Trustee Agreement made Secured Futures the successor trustee of the JFCS Trust
through a two-step process: Secured Futures became a co-trustee with JFCS, and JFCS
then resigned. Trustee Agreement, ¶¶ 1, 2. The Trustee Agreement directs Secured Futures
to operate the JFCS Trust in accordance with the provisions of both the JFCS Trust
and the SF Trust; in the event conflicts arise between the terms of the two trusts,
the JFCS Trust “shall govern and control.” Trustee Agreement, ¶ 3.
Although the Trustee Agreement states that the beneficiaries of the JFCS Trust “shall
become beneficiaries of the [SF Trust]” (Trustee Agreement, ¶ 4), the agreement does
not terminate the JFCS Trust. [4] Instead, it provides that Secured Futures, as successor trustee, will operate the
JFCS Trust in accordance with its terms as well as the terms of the SF Trust. Trustee
Agreement, ¶ 3. Paragraph 3 therefore appears to impose additional obligations on
Secured Futures in how it operates the JFCS Trust (i.e., by requiring compliance with
any terms of the SF Trust that are not in the JFCS Trust), but provides that the JFCS
Trust controls and any conflicts between the two trusts are resolved in favor of the
JFCS Trust. Trustee Agreement, ¶ 3.
Further, the Trustee Agreement does not provide any mechanism for transitioning the
beneficiaries of the JFCS Trust into the SF Trust. See Trustee Agreement, ¶ 4 (stating “the Beneficiaries shall become beneficiaries of the
[SF Trust]”). For example, the SF Trust requires beneficiaries to sign a Joinder and
the trustee to accept the Joinder before an individual may participate in the trust,
but the Trustee Agreement does not require beneficiaries of the JFCS Trust to execute
Joinders for the SF Trust. [5] See SF Trust, Art. Six, § 6.1.
Accordingly, under the Trustee Agreement, the JFCS Trust is the operative trust for
P~ and L~: the JFCS Trust was not terminated, Secured Futures was named its successor
trustee, the terms of the JFCS Trust are controlling, and P~ and L~ have not executed
Joinders for the SF Trust.
B. The JFCS Trust Meets Some, But Not All, of the Requirements to Be
Excepted from Resource Counting
As discussed above in part A of this section, the JFCS Trust is the operative trust
for P~ and L~. The trust, however, does not satisfy all of the requirements to be
excepted from resource counting. [6]
1. The JFCS Trust Is for the Sole Benefit of the
Beneficiaries.
Sub-accounts within the JFCS Trust are for the sole benefit of the beneficiaries as
required under the Act, POMS SI 01120.201.F, and POMS SI 01120.203.B.2.e. Article VI of the JFCS Trust states that “a sub-account shall be established
solely for the benefit of each qualified individual beneficiary.” JFCS Trust, Art.
VI.B. Further, distributions from trust sub-accounts are to be made only to or for
the benefit of that beneficiary during his/her lifetime and may not be made to any
other persons, such as family or dependents. JFCS Trust Art. VIII.C & E. [7] Finally, a beneficiary may not demand or direct payment from the trust and, further,
beneficiaries’ interests are not subject to transfer, assignment, or creditors’ claims.
JFCS Trust, Art. XI. Moerover, the JFCS Trust does not contain any provisions permitting
the early termination of the trust and, therefore, POMS SI 001120.199.F is inapplicable.
Under these provisions, the trust will not benefit anyone but the beneficiary during
his/her lifetime. See POMS SI 01120.201.F.2.
2. Upon the Death of the Beneficiary, the JFCS Trust Does Not Require
Reimbursement to All States for Medical Assistance to the Beneficiary During
His/Her Lifetime, to the Extent Amounts in the Beneficiary’s Account Are Not
Retained by the Trust.
Article IX of the JFCS Trust provides that, upon the death of a beneficiary, any amounts
remaining in his/her sub-account will be retained by the trust in a general account
to be used for the benefit of other trust beneficiaries or persons who are indigent
and disabled. JFCS Trust, Art. IX.A. However, to the extent the trust does not retain
amounts remaining in a deceased beneficiary’s sub-account, the trustee will “pay to
the State (AHCCCS) from such remaining amounts in the account an amount equal to the
total amount of medical assistance paid on behalf of the beneficiary under the State’s
plan.” JFCS Trust, Art. IX.B. This provision therefore provides reimbursement only
to Arizona’s Medicaid agency, AHCCCS, and not all States that may have provided medical
assistance under a State Medicaid plan. See
POMS SI 01120.203.B.2.g.
The JFCS Trust does provide, in Article XII, that if a beneficiary moves from Arizona
to another State and qualifies for benefits in such other State, “references to Arizona
or to State in this trust shall also apply to the other State, but the rights of the
State of Arizona (AHCCCS) as a remainder beneficiary after the death of any individual
beneficiary shall be retained.” JFCS Trust, Art. XII.B. However, this provision would
only result in reimbursement of States to which the beneficiary moved after he/she
left Arizona; it does not ensure that States which provided medical assistance before
the beneficiary enrolled in the JFCS Trust in Arizona are paid back. See JFCS Trust, Art. XII.B; POMS SI 01120.203.B.2.g (providing that reimbursement for medical assistance cannot be limited to particular
State(s) or periods of time, such as after establishment of the trust).
The JFCS Trust therefore does not satisfy § 1917(d)(4)(C)(iv) of the Act and POMS
SI 01120.203.B.2.g since it does not ensure that, to the extent the trust does not retain amounts
remaining in a beneficiary’s sub-account upon his/her death, all States are reimbursed
from any trust balance for the total amount of medical assistance paid on behalf of
the beneficiary during his or her lifetime. Instead, it effectively limits Medicaid
reimbursement to Arizona and those States to which the beneficiary moves after residing
in Arizona. See JFCS Trust, Arts. IX.B & XII.B.
C. The SF Trust Meets Some, But Not All, of the Requirements to Be Excepted
from Resource Counting
Even if the SF Trust (as amended by the Arizona Amendment) were deemed applicable
here, it similarly meets some, but not all, of the requirements to be excepted from
resource counting. [8] 1. The SF Trust Does Not Satisfy the Requirement that the Trust be for the Sole Benefit
of the Beneficiaries.
The early termination provisions of the SF Trust do not fully comply with the requirements
of POMS SI 001120.199.F and, therefore, the trust is not for the sole benefit of the
beneficiary as required under the Act.
(a) Early Termination Provisions – Article Seven
Article Seven permits early termination of a beneficiary’s sub-account if the trustee
believes that it cannot fulfill its fiduciary duties to a beneficiary or that the
sub-account may become liable for a beneficiary’s basic maintenance and support. SF
Trust, Art. Seven, § 7.1. This provision allows the trustee to transfer the beneficiary’s
sub-account to either (1) a comparable non-profit pooled trust organized under 42
U.S.C. § 1396p(d)(4)(C), or (2) a private special needs trust organized under 42 U.S.C.
§ 1396p(d)(4)(A). SF Trust, Art. Seven, § 7.1(a) & (b).
This early termination provision is problematic for two reasons. First, under § 7.1(a),
the subaccount may be transferred to another pooled trust but there is no limiting
language as required under POMS SI 01120.199.F.2. See
Article Seven, § 7.1(a). Second, under § 7.1(b), the subaccount may be transferred
to a private trust established under § 1917(d)(4)(A), which does not comply with the requirement
that the sub-account be transferred to a pooled trust established under § 1917(d)(4)(C).
[9] [10] SF Trust, Art. Nine, § 9.1. This section of Article Nine therefore does not satisfy
the requirements of POMS SI 01120.199.F.2 for the same reasons discussed above in connection with Article Seven’s early
termination provisions.
2. Upon the Death of the Beneficiary, the SF Trust Does Not Require Reimbursement
to All States for Medical Assistance to the Beneficiary During His/Her Lifetime, to
the Extent Amounts in the Beneficiary’s Account Are Not Retained by the Trust.
The Arizona Amendment controls over any conflicting provisions of the SF Trust (Ariz.
Amend., ¶ 2). Under its terms, “the Arizona State Medicaid agency shall be the primary
beneficiary” of the sub-account if the trust is terminated before or upon the death
of the trust beneficiary; it does not ensure that all States which provided medical assistance to the beneficiary are repaid. See Ariz. Amend., ¶ 3; POMS SI 01120.199.F.1. The Arizona Amendment only provides reimbursement to Arizona’s Medicaid agency,
not all States that may have provided medical assistance under a State Medicaid plan.
See Ariz. Amend., ¶ 3; POMS SI 01120.203.B.2.g. Accordingly, the SF Trust as modified by the Arizona Amendment does not satisfy
the requirements set forth in § 1917(d)(4)(C)(iv) of the Act and POMS SI 01120.203.B.2.g.
VII. CONCLUSION
The JFCS Trust is the operative trust for P~ and L~. As currently drafted, it does
not meet all of the requirements to be excepted from resource counting under the Act
with respect to the Medicaid payback requirement. Specifically, upon the beneficiary’s
death, the trust does not require reimbursement to all State(s) that provided medical
assistance during the beneficiary’s lifetime. See Social Security Act § 1917(d)(4)(C)(iv). This deficiency could be addressed by amending
Article IX of the JFCS trust to provide language that, to the extent the JFCS Trust
does not retain the amounts remaining in a deceased beneficiary’s sub-account, the
trustee will pay to the State(s) an amount equal to the total amount of medical assistance
paid on behalf of the individual under the State Medicaid plan(s). In other words,
if the JFCS Trust chooses to amend, the amended language should clearly provide for
reimbursement to all states that paid medical assistance on behalf of the beneficiary
during his or her lifetime and not limit reimbursement to any state. In addition,
while not controlling for P~ or L~, we note that the SF Trust (as modified by the
Arizona Amendment) also fails to meet the Medicaid payback or “sole benefit” requirements
of § 1917(d)(4)(C). These deficiencies could be addressed by revisions to the Arizona
Amendment. With respect to Medicaid payback, the trust could revise paragraph 3 of
the Arizona Amendment to provide for reimbursement to all states that provided medical
assistance during the beneficiary’s lifetime, rather than solely providing for reimbursement
to the Arizona State Medicaid agency. See POMS SI 01120.203.B.2.g. With respect to “sole benefit,” Article Seven, § 7.1(a) could be revised to
include specific limiting language ensuring that early termination does not result
in disbursements to any individual or entity other than to the second pooled trust
or to pay for allowable administrative expenses. See POMS SI 01120.199.F.2. Likewise, Article Seven, § 7.1(b) should be deleted so that sub-accounts may
only be transferred to pooled trusts pursuant to Article Seven, § 7.1(a), and not
private trusts. See POMS SI 01120.199.F.2. With respect to the early termination provision of Article Nine, § 9.2, the
language could be revised to provide for distribution solely to the beneficiary after
reimbursement to the State(s) and payment of administrative expenses. See POMS SI 01120.199.F.1.