States in the Kansas City Region – Iowa, Kansas, Missouri, and Nebraska – follow the
general principle of trust law summarized in SI 01120.200D.3. Absent evidence of contrary intent, if the trust document clearly reserves the grantor’s
right to revoke, the trust is revocable. However, if the grantor names no other residual beneficiaries of the trust, the
trust is revocable, even if the trust document says it is irrevocable
The four states also recognize that unless the grantor specifically reserves the right
to revoke, the trust is irrevocable if there is a named residual beneficiary that would receive the principal of the
trust upon the occurrence of some specific event, most commonly the death of the grantor.
It is important to make revocability determinations by evaluating the trust document
as a whole, including the grantor’s intent.
Absent an indication of contrary intent, you may assume that a grantor intended to
create residual beneficiaries by naming the grantor's heirs, heirs-at-law, survivors,
distributees, child, children, issues, descendants, relatives, family, next-of-kin,
and persons entitled to inherit on the grantor's death intestate or under the statute
of descent and distribution, or by using words that convey a similar meaning. If there
are such residual beneficiaries, the grantor cannot revoke the trust unilaterally,
unless the grantor reserved the right to do so. If the trust document states the grantor’s
own estate will receive any remaining trust assets on the grantor’s death, and names
no other beneficiaries to the trust, the trust should be considered revocable.
A trust document may provide that upon the death of the beneficiary, the State(s)
will receive an amount equal to the amount of medical assistance paid on behalf of
the individual under the State Medicaid plan. In Iowa, if the State may be reimbursed
by a trust at the death of the recipient, then the State Medicaid agency is a residual beneficiary. Therefore, the trust would not be a revocable grantor trust.
2. Kansas, Missouri, and Nebraska
In Kansas, Missouri, and Nebraska, if the trust document provides that upon the death
of the beneficiary, the State(s) will receive an amount equal to the amount of medical
assistance paid on behalf of the individual under the State Medicaid plan, then the
State is a creditor of the trust – in some circumstances the primary creditor – but not a beneficiary.
If, after review of the trust document, you are unable to determine the revocability
of a trust, contact the Regional Trust lead on the SSI Team in the Center for Disability
and Programs Support in vHelp.