QUESTION
You asked whether the second amended and restated Declaration of Trust for the Pooled
Accounts Trust of the Arc of Midland, dated December 3, 2019, complies with the procedures
governing the Agency’s pooled trust policy.
SHORT ANSWER
For the reasons discussed below, we conclude that a self-settled sub-account in the
Trust would be considered a resource under the Social Security Act because the Trust
does not meet all of the requirements of the pooled trust exception. Specifically,
the Trust allows for (a) execution of core managerial duties by a for-profit entity,
(b) sub-accounts containing funds for multiple beneficiaries, and (c) the use of a
beneficiary’s funds for the benefit of another beneficiary. However, a third-party
sub-account in the Trust would not constitute a resource under the agency’s regular
resource rules. In the case of a comingled sub-account, the portion of the sub-account
attributable to the assets of a third party would not be considered a resource, whereas
the portion attributable to the assets of the grantor-beneficiary would be considered
a resource.
BACKGROUND
The Arc of Midland (Arc), a Michigan non-profit organization, has established the
Pooled Accounts Trust of the Arc of Midland (Arc Pooled Trust). See
About
– The Arc of Midland, https://www.thearcofmidland.org/about/ (last visited Mar. 11, 2020). The Arc Pooled Trust is intended as a pooled supplemental
needs trust to supplement, but not displace, assistance which may otherwise be available
to beneficiaries. Trust Declaration (TD) Art. I, II.5, III.1. The assets held in the
Trust and sub-accounts are not for the primary support of the beneficiaries but rather
are “to supplement their care needs only.” TD Art. III.1. A “Beneficiary” is defined
as a disabled person who meets the requirements of 42 U.S.C. § 1382c(a)(3) and is
a recipient of services and benefits under the Trust. TD Art. II.1.
In 2018, your office submitted the Declaration of Trust initially entered into on
June 24, 1999, and amended and restated on June 3, 2013, as well as a Joinder Agreement,
to our office. In an opinion dated January 25, 2019, we concluded that this version
of the Trust did not comply with SSA’s pooled trust policy. See Program Operations Manual System (POMS) PS 01825.025 (CPM-19-036). Apparently in response to our opinion, Arc amended and restated the
Trust again on December 3, 2019. Your office has submitted the second amended and
restated Declaration of Trust and updated Joinder Agreement for our review.
The Trust defines “Grantor” as the person who establishes a Trust sub-account for
the benefit of a Beneficiary, and states that a Grantor can be the Beneficiary, a
parent, grandparent, or legal guardian of the Beneficiary, or a court. TD Art. II.3.
A Beneficiary’s sub-account is established upon the execution of a Joinder Agreement
by a Grantor, subject to written acceptance of the Trustee. TD Art. V. Once a Grantor
delivers property to the Trustee and the Trustee accepts it, the Trust becomes irrevocable
and the contributed property non-refundable. Id.
“Trustee” is defined as Arc, its successor or successors, and any Co-Trustee or Co-Trustees.
TD Art. II.6. In turn, the Trust defines “Co-Trustee” as a person or entity, or both,
selected by the Trustee to assist with the management, administration, allocation,
and disbursement of Trust assets and property. Id. The Trustee may resign only with court approval, and the court will select and appoint
a successor Trustee. TD Art. XI.
Beneficiaries “have no entitlement to the income or corpus of [the] Trust, except
as the Trustee, in its complete and unfettered discretion, elects to disburse,” and
the “Trust corpus and income are not available to any Beneficiary except to the extent
of distributions made by the Trustee to a Beneficiary.” TD Art. III.1, 3. Further,
Beneficiaries are prohibited from compelling a distribution from their sub-accounts.
TD Art. III.5.
The Trust Declaration states that it shall be irrevocable, but that it may be amended
to effectuate the terms and purposes of the Trust as set forth in Article III. TD
Art. V, IX. Additionally, the Trustee, with court approval, may amend the Trust Declaration
to conform with any rules or regulations relating to 42 U.S.C. § 1396p or related
statutes, whether State or federal. TD Art. IX.
The Trust Declaration contains a paragraph pertaining to early termination of the
Trust. TD Art. X.1. Additionally, the Trust Declaration and the Joinder Agreement
each contain a paragraph regarding the distribution of trust assets upon the death
of a beneficiary. TD Art. X.2; JA at W. Those paragraphs contain Medicaid payback
provisions, under which any amounts remaining in a sub-account after the beneficiary’s
death that are not retained by the Trust must be paid to “any state” up to the “amount
equal to the total amount of medical assistance paid on behalf of the Beneficiary”
by the state. TD Art. X.2; JA at W.
The Trust Declaration contains a spendthrift provision that prohibits (1) anticipation
or assignment by any Beneficiary of any part of the Trust principal or income; and
(2) attachment or control of any part of the Trust principal or income by any creditor
of a Beneficiary, whether private or public. TD Art. III.5. The spendthrift clause
also provides that no part of the Trust, principal or income, “may be taken by any
legal or equitable process by any voluntary or involuntary creditor, including those
that have provided for the Beneficiary’s support and maintenance.” Id.
The Trust Declaration and Joinder Agreement each provide that Arc, as Trustee, is
the remainder Beneficiary of each Trust sub-account. TD Art. XIII.1.b; JA at DD.5.a.2.
The Joinder Agreement provides that if the Grantor of a sub-account intends to enroll
more than one Beneficiary under one sub-account, an additional agreement between the
Grantor and the Trustee is required. JA at DD.3.
DISCUSSION
As stated above, the Trust allows a Grantor to be a Beneficiary, a Beneficiary’s parent,
grandparent, or legal guardian, or a court, and a Trust sub-account becomes effective
upon execution of a Joinder Agreement by a Grantor. TD Art. II.3, V. In addition,
the Trust Declaration provides that the Trust Estate may include contributions in
cash or property “at any time by any grantor” in accordance with Art. V. TD Art. IV (emphasis added). The Trust Declaration and
Joinder Agreement are otherwise silent as to who may contribute assets to a sub-account.
Thus, as currently written, it appears that the Trust permits not only Beneficiaries
but also their parents, grandparents, and legal guardians to contribute assets to
a Trust sub-account.[21] Consequently, three possible types of sub-accounts exist: (1) a sub-account that
is funded solely by assets belonging to the Beneficiary (i.e., a self-settled sub-account); (2) a sub-account that is funded solely by third-party
assets; and (3) a comingled sub-account containing both third-party and Beneficiary
assets. The following discussion addresses each type separately.
I. Self-Settled Sub-Accounts
A. Statutory Resource Rules
Under the Social Security Act (Act), a trust created on or after January 1, 2000[22] , from the assets of an individual generally will be considered a resource for SSI
purposes to that individual to the extent that the trust is revocable or, in the case
of an irrevocable trust, to the extent that any payments could be made from the trust
to or for the benefit of the individual. See 42 U.S.C. § 1382b(e); POMS SI 01120.201(D). As relevant here, an exception to this rule exists for trusts that meet the criteria
of 42 U.S.C. § 1396p(d)(4)(C) (commonly known as the pooled trust exception).
In order to qualify for the pooled trust exception, the trust must contain assets
belonging to a disabled individual and satisfy the following conditions:
1. The trust is established and managed by a non-profit association.
2. The trust maintains a separate account for each beneficiary, but pools these accounts
for purposes of investment and management of funds.
3. Accounts in the trust are established solely for the benefit of the disabled individual.
4. The account is established through the actions of the individual, parent, grandparent,
legal guardian, or court.
5. To the extent that amounts remaining in the beneficiary’s account upon the death
of the beneficiary are not retained by the trust, the trust will pay to the State(s)
the amount remaining in the account up to the total amount of medical assistance paid
on behalf of the beneficiary under the State Medicaid plan(s).
See 42 U.S.C. § 1396p(d)(4)(C); POMS SI 01120.203(D)(1).
Here, although the Trust is irrevocable, a self-settled sub-account in the Trust would
be a resource, because funds held in the sub-account are to be used for the individual
Beneficiary’s benefit. TD Art. III.1-2. Accordingly, we consider whether the Trust
qualifies for the pooled trust exception. As discussed below, we do not believe the
second restated Trust Declaration satisfies all of the requirements of this exception.
As such, a self-settled sub-account in the Trust established on or after January 1,
2000, would not be excepted from resource counting.
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1. Established and Managed by a Non-Profit
Association
To satisfy the first requirement of the pooled trust exception, the trust must be
established and managed by a non-profit association. 42 U.S.C. § 1396p(d)(4)(C)(i);
POMS SI 01120.203(D)(3). A non-profit association may employ the services of a for-profit entity, but
the non-profit association must maintain ultimate managerial control over the trust.
POMS SI 01120.225(D). For example, the non-profit association must be responsible for making day-to-day
decisions regarding the health and well-being of the beneficiaries. Id. Also, a for-profit entity must not be allowed to determine whether to make discretionary
disbursements from the trust. POMS SI 01120.225(E).
Here, Arc, a non-profit association, established and manages the Arc Pooled Trust.
See TD Art. III.1. The Trust Declaration designates Arc as the Trustee. TD Art. II.6.
The Trust Declaration also states that if “a non-profit association employs the services
of a for-profit entity, the non-profit must maintain ultimate managerial control over
the trust.” TD Art. VI.8.
As Trustee, Arc is empowered to “employ any investment management service, financial
institution, or similar organization to advise it, handle all Trust investments, and
render all accounting of funds held on its behalf under custodial, agency, or other
Agreements.” TD Art. VII.17. While this could result in a for-profit entity managing
the Trust investments, that would not be inconsistent with the statement in Art. VI.8
that Arc must maintain “ultimate managerial control” over the Trust. Therefore, such
use of a for-profit entity would not violate this first requirement of the pooled
trust exception.
However, the Trust Declaration as currently written still appears to allow for the
possibility that a for-profit entity acting as a Co-Trustee could manage the Trust
or execute core managerial duties. “Co-Trustee” is defined as “a person or entity,
or both, selected by the Trustee to assist with the management, administration, allocation,
and disbursement of Trust assets and property.” TD Art. II.6. Nothing prohibits the
Trustee from selecting a for-profit entity as a Co-Trustee.[23]
Significantly, the Trust Declaration provides that “Trustee” shall include any Co-Trustee
or Co-Trustees. TD Art. II.6. As such, a Co-Trustee, which could be a for-profit entity,
would hold the same powers as the Trustee and could potentially execute core managerial
duties. See, e.g., TD Art. III.2 (Trustee has sole discretion to make payments from sub-account for
beneficiary’s supplemental care needs), VI.6 (Trustee has sole discretion to make
any payment to beneficiary or any suitable person), VII Introduction (Trustee holds
numerous “continuing, absolute, and discretionary powers to deal with any property,
real or personal, held in the Trust”).
Moreover, the Trust Declaration does not require that a successor Trustee to Arc be
a non-profit association. It specifies that the Trustee may only resign with the approval
of a court of competent jurisdiction, and that the court will select and appoint a
successor Trustee. TD Art. XI. However, the Trust Declaration does not expressly require
the court to select a non-profit association. If a for-profit entity were named as
successor Trustee, that would also violate the agency policy that a pooled trust must
be managed by a non-profit association. See
POMS SI 01120.203(D)(3), SI 01120.225(B).
Accordingly, the Trust does not appear to satisfy the first requirement of 42 U.S.C.
§ 1396p(d)(4)(C) and POMS SI 01120.203(D).
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2. Maintenance of Separate Accounts for Each Trust
Beneficiary
To satisfy the second requirement of the pooled trust exception, a trust must maintain
a separate account for each trust beneficiary, although it is acceptable for individual
accounts to be pooled for investment and management purposes. 42 U.S.C. § 1396p(d)(4)(C)(ii);
POMS SI 01120.203(D)(4). The Trust Declaration states that the Trust maintains a separate sub-account
for each beneficiary, but for purposes of investments and management of funds, the
Trustee pools the Trust sub-accounts. TD Art. VI.1. Also, the Trustee, or its authorized
agent, maintains records for each Trust sub-account. Id . However, the Joinder Agreement (JA) contains a provision indicating that a Grantor
may enroll more than one Beneficiary under one sub-account.[24] JA at DD.3. Doing so would create an account for multiple beneficiaries, in contravention
of the requirement that the trust maintain a separate account for each beneficiary.
Consequently, the Trust does not appear to meet this requirement.
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3. Established for the Sole Benefit of the
Individual
To satisfy the third requirement of the pooled trust exception, the trust account
must be established for the sole benefit of the disabled individual. 42 U.S.C. § 1396p(d)(4)(C)(iii);
POMS SI 01120.203(D)(5). A trust is considered to be established for the sole benefit of an individual
if the trust benefits no one but that individual, either at the time the trust is
established or at any time for the remainder of the individual’s life. POMS SI 01120.201(F)(1). The POMS states that an individual trust account does not meet the pooled
trust exception if the trust account “provides a benefit to any other individual or
entity during the disabled individual’s lifetime.” POMS SI 01120.203(D)(5).
Here, the Trust Declaration provides that the “Trustee shall pay or apply for the
supplemental needs of each Beneficiary, such amounts from the principal or income,
or both, of the Trust sub-account maintained for such Beneficiary . . . as the Trustee . . . may from time to time deem necessary or advisable for
the satisfaction of that Beneficiary’s supplemental care needs, if any.” TD. Art. III.2 (emphasis added). Similarly, the
Trust refers to a Grantor establishing a sub-account “for the benefit of the Beneficiary.” TD Art. II.3 (emphasis added). Likewise, any sub-account established by execution
of a Joinder Agreement “will be administered for the benefit of the
Beneficiary.” JA at Z.
However, the Joinder Agreement as currently written contemplates a single sub-account
containing funds belonging to multiple beneficiaries. JA at DD.3 (Grantor may “enroll
more than one Beneficiary under one Trust sub-account” by executing an additional
agreement). Nothing in the Joinder Agreement stipulates that the funds in such a sub-account
would be reserved pro rata exclusively for each beneficiary’s benefit, or otherwise kept track of to ensure
that none of the funds belonging to one beneficiary would be used for the benefit
of another of that sub-account’s beneficiaries. Accordingly, the Trust does not meet
the requirements of 42 U.S.C. § 1396p(d)(4)(C)(iii) and POMS SI 01120.203(D)(5).
The POMS also states that an individual trust account does not meet the pooled trust
exception if the trust account “allows for termination of the trust account prior
to the individual’s death and payment of the corpus to another individual or entity.”
POMS SI 01120.203(D)(5). An early termination clause is acceptable only if all of the following criteria
are met: (1) the State(s) receives all amounts remaining in the trust up to an amount
equal to the amount of medical assistance paid on behalf of the individual under the
State Medicaid plan(s); (2) after payment of allowable administrative expenses,[25] all remaining funds are distributed to the trust beneficiary; and (3) the power to
terminate is given to someone other than the trust beneficiary. See POMS SI 01120.199(F)(1). An early termination clause, however, need not meet the foregoing criteria
if it solely allows for a transfer of the beneficiary’s assets from one section 1917(d)(4)(C)
qualifying pooled trust to another section 1917(d)(4)(C) qualifying pooled trust.
See POMS SI 01120.199(F)(2).
The Trust Declaration contains an early termination clause, which appears to comply
with SSA’s policy regarding early termination. Article X.1.a provides that upon early
termination, the State(s) as primary assignee will receive all amounts remaining in
the Trust at the time of termination up to an amount equal to the total amount of
medical assistance paid on behalf of the individual under the State Medicaid plan(s).[26] In turn, Article X.1.b provides that after the above reimbursement to the State(s),
all remaining funds must be distributed to the beneficiary. Additionally, the power
to terminate belongs exclusively to the Trustee and not the beneficiary. TD Art. X.1.c.
These provisions comport with the requirements for an acceptable early termination
clause in POMS SI 01120.199(F)(1). The Trust Declaration further provides that a beneficiary’s assets may be
transferred from one qualifying section 1917(d)(4)(C) pooled trust to another qualifying
section 1917(d)(4)(C) pooled trust. TD Art. X.1.d. That also meets the requirement
in POMS SI 01120.199(F)(2).
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4. Established Through the Actions of the Beneficiary, a
Parent, Grandparent, Legal Guardian, or a Court
The fourth requirement of the pooled trust exception is that the trust account must
be established through the actions of the account beneficiary, his or her parent,
grandparent, or legal guardian, or a court. 42 U.S.C. § 1396p(d)(4)(C)(iii); POMS
SI 01120.203(D)(6). The Arc Pooled Trust satisfies this requirement, because it limits the meaing
of “Grantor” to only those persons or entities permitted under the statute to take
action to establish a Trust sub-account, and specifies that only a Grantor may establish
a sub-account. TD Art. II.3, V. The trust defines “Grantor” as the person who establishes
a Trust sub-account for the benefit of a Beneficiary, and states that a Grantor can
be the Beneficiary, a parent, grandparent, or legal guardian of the Beneficiary, or
a court. TD Art. II.3. And a Beneficiary’s sub-account is established upon the execution
of a Joinder Agreement by a Grantor, subject to written acceptance of the Trustee.
TD Art. V. Therefore, the Trust satisfies this requirement.
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5. Reimbursement to the State(s) Upon the Beneficiary’s
Death
To satisfy the fifth requirement of the pooled trust exception, the trust must contain
“specific language” that provides that upon a beneficiary’s death, to the extent amounts
remaining in the beneficiary’s account are not retained by the trust, the State(s)
are reimbursed an amount equal to the total amount of medical assistance paid on behalf
of the deceased beneficiary under the State Medicaid plan(s) during his or her lifetime.
42 U.S.C. § 1396p(d)(4)(C)(iv); POMS SI 01120.203(D)(8). This is known as the Medicaid payback requirement of the pooled trust exception.
Here, the Trust includes a provision concerning termination upon death. The Trust
Declaration states that, upon the death of a Beneficiary, any funds remaining in the
sub-account shall be deemed to be surplus Trust property and shall be retained by
the Trust and, in the Trustee’s sole discretion, used (a) for the benefit of other
Beneficiaries, (b) to “aide persons who are indigent and disabled,” or (c) to provide
persons who are indigent and disabled with housing or supplemental support services.
TD Art. X.2. The Trust Declaration goes on to state that “to the extent that any amounts
remaining in the Beneficiary’s account” upon the Beneficiary’s death are not so retained
by the Trust, the Trustee “shall pay from such remaining amounts in the account to
any state 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.” Id. Accordingly, the Trust contains the necessary language to satisfy the Medicaid payback
requirement. The Joinder Agreement includes the same provision. JA at W.
Thus, we believe that a self-settled sub-account in the Trust established on or after
January 1, 2000, would be considered a resource under the Social Security Act because
it does not meet all of the requirements of the pooled trust exception. Consequently,
the defects discussed above would have to be cured to except this Trust from resource
counting.[27]
B. Regular Resource Rules
If Arc were to cure the above defects and qualify for the pooled trust exception,
the regular resource counting rules in POMS SI 01120.200 would apply to determine whether a self-settled sub-account in the Trust established
on or after January 1, 2000, would be counted as a resource.[28] See 42 U.S.C. § 1382b(e)(1); POMS SI 01120.203(D)(1). Pursuant to POMS SI 01120.200(D)(1)(a), trust principal will count as a resource if the beneficiary either: (a)
has the legal authority to revoke or terminate the trust and then use the funds to
meet his or her food or shelter needs; or (b) can direct use of the trust principal
for his or her support and maintenance under the terms of the trust. Additionally,
if the beneficiary can sell his or her beneficial interest in the trust, that interest
is a resource. Id.
With respect to revocability, whether a trust can be revoked depends on the terms
of the trust and applicable state law – here, Michigan. See POMS SI 01120.200(D)(2). The Trust Declaration states that it shall be irrevocable, but that it may
be amended under certain conditions. TD Art. IX. Additionally, upon the delivery to
and acceptance of property by the Trustee, the Trust shall be irrevocable and the
property nonrefundable. TD Art. V. Thus, because a Grantor can include the Beneficiary,
where the Beneficiary contributes or causes to be contributed his or her own assets
to the Trust sub-account, the Trust is irrevocable as to the Beneficiary.
Notwithstanding these provisions, under Michigan law, when a grantor is the sole beneficiary
of a trust, the trust is deemed to be revocable even if the trust document states
it is irrevocable. See POMS SI CHI01120.200(C). However, if the trust names a residual beneficiary or beneficiaries to receive
the benefit of the trust interest after a specific event – usually the death of the
primary beneficiary – then the trust is irrevocable, because the primary beneficiary
could not unilaterally revoke the trust; rather, he or she would need the consent
of the residual beneficiary or beneficiaries. See id. Here, the Joinder Agreement provides that, upon the death of the Beneficiary, if
the Trust does not retain the funds in the Beneficiary’s account, “and after all State(s)
have been reimbursed the total amount of Medical assistance provided, then the residual
beneficiary of any Trust funds shall be” the person named by the Grantor at the time
the Joinder Agreement is executed. JA at W. Moreover, the Trustee maintains a contingent
residual interest in each sub-account. See TD Art. XIII.1.b; JA at DD.5.a.2. Thus, there is at least one residual beneficiary
and, consequently, a self-settled sub-account in the Trust is not revocable. See
POMS SI CHI01120.200(C), (D).
Regarding the Beneficiary’s ability to direct the use of trust principal, here the
Trustee, in its sole discretion, may make any payments under the Trust for the supplemental
needs of each Beneficiary. TD Art. III.2, VI.6; JA at BB. Neither the Trust Declaration
nor the Joinder Agreement provides for mandatory disbursements to the Beneficiary;
indeed, the Trust Declaration states that Beneficiaries are not entitled to the Trust
corpus or income and may not compel distributions from their sub-accounts. TD Art.
III.1, 3, 5. Thus, the Beneficiary cannot direct the use of the sub-account principal
for support and maintenance.
With respect to the Beneficiary’s ability to sell his or her beneficial interest in
the Trust, the Trust Declaration contains a spendthrift provision which provides that
no part of the Trust, principal or income, shall be subject to anticipation or assignment
by the Beneficiaries nor shall it be subject to attachment or control by any public
or private creditor of the Beneficiaries; nor may it be taken by any legal or equitable
process by any voluntary or involuntary creditor. TD Art. III.5. Under Michigan law,
however, even if the trust has a valid spendthrift provision, a “creditor or assignee”
of a self-settled trust may reach “[t]he maximum amount that can be distributed to
or for the settlor’s benefit” (exclusive of sums needed to pay the settlor’s taxes).
Mich. Comp. Laws Ann. § 700.7506(1)(c)(ii). Nevertheless, we believe this provision
is best read to apply only to assignees who are creditors of secured interests in
the property, rather than a purchaser to whom property has been transferred for fair
market value.[29] We believe that Michigan would likely follow the Restatement (Third) of Trusts, which
states that a purchaser for value (as opposed to a creditor) generally would not be
able to reach the trust funds of a self-settled discretionary trust. See Restatement (Third) of Trusts § 60 & comment f (2019). Therefore, beneficiaries effectively
cannot sell their beneficial interests in the trust and obtain the cash value of the
trust.
Thus, if Arc can cure the defects discussed in Section I.A above and satisfy the requirements
of the pooled trust exception, a self-settled sub-account in the Trust would not constitute
a resource under the regular resource rules.
II. Third-Party Sub-Accounts
As noted above, it appears that the Trust permits not only Beneficiaries but also
their parents, grandparents, and legal guardians to contribute assets to a Trust sub-account.
TD Art. II.3, IV, V. In the case of a trust established solely with the assets of
a third party, the regular resource rules set forth in POMS SI 01120.200 apply to determine whether the assets in the trust are a resource. Here, as with
a self-settled sub-account, a third-party sub-account would not be a resource under
the regular resource rules. First, the Trust does not give the Beneficiary the right
to terminate his or her sub-account. See POMS SI 01120.200(D)(1)(b)(2) (beneficiary generally does not have power to terminate a trust). Indeed,
the Trust Declaration expressly provides that the power to terminate belongs exclusively
to the Trustee and not to the Beneficiary. TD Art. X.1.c. Second, as discussed above,
the Trust contains no provision allowing the Beneficiary to direct the use of trust
principal for his or her support or maintenance. Finally, with respect to a beneficiary’s
power to otherwise sell his or her beneficial interest in the Trust, the Trust contains
a spendthrift provision, as noted above, TD Art. III.5, which Michigan allows in third
party trusts. See Mich. Comp. Laws Ann. § 700.7502(1). Accordingly, a beneficiary’s beneficial interest
in a third-party sub-account also would not be considered a resource.
III. Comingled Sub-Accounts
It is possible for a sub-account in the Arc Pooled Trust to contain assets attributable
to both the beneficiary and one or more of the third parties noted above. Agency policy
provides that, in the case of a comingled trust established on or after January 1,
2000, with the assets of both an SSI claimant (or spouse) and third parties, the regular
resource rules apply to the portion of the comingled trust attributable to the assets
of third parties, and the statutory resource rules apply to the portion attributable
to the assets of the SSI claimant (or spouse). See POMS SI 01120.200(A)(1)(b), SI 01120.201(C)(2)(c).
Here, in the event that a sub-account in the Trust established on or after January
1, 2000, receives any contributions from a third party (parent, grandparent, or legal
guardian), the portion of the sub-account attributable to the assets of the third
party would not be a resource under the regular resource rules, as discussed in Section
II above. However, with respect to the portion of the sub-account attributable to
the assets of the grantor-beneficiary, that portion would be considered a resource
under the Act based on the defects discussed in Section I.A above.[30]
CONCLUSION
For the reasons discussed above, we conclude that a self-settled sub-account in the
Arc Pooled Trust established on or after January 1, 2000, does not meet all of the
requirements for an exception to resource counting under 42 U.S.C. § 1396p(d)(4)(C).
However, if the defects identified above with respect to the statutory exception were
cured, then a self-settled Trust sub-account would not constitute a resource under
the regular resource counting rules. Similarly, a third-party sub-account in the Arc
Pooled Trust would not constitute a resource. Finally, in the case of a comingled
sub-account, the portion of the sub-account attributable to the assets of a third
party would not be considered a resource, whereas the portion attributable to the
assets of the grantor-beneficiary would be considered a resource.