TN 50 (08-15)
SI 01120.202 Development and Documentation of Trusts Established on or After 01/01/00
A. Procedure for trust development
1. General development for written trusts
a. Review the trust document
Obtain a copy of the trust document and related documents and, if possible, review the trust to determine whether the:
Trust was established before, on or after 01/01/00;
Assets were transferred into the trust before, on or after 01/01/00;
Trust contains assets of third parties;
Individual is grantor, trustee, or trust beneficiary;
Trust is revocable or irrevocable;
Trust provides for payments to the individual or on the individual’s behalf;
Trust generates income (earnings), and if so, whether the individual has the right to any of the income;
Trust contains a spendthrift clause that prohibits anticipation of any trust payments; and
Trust is receiving payments from another source.
b. Which instructions apply when determining the resource status and income treatment of a trust
Depending on the trust’s date of establishment and whose funds the trust principal contains, follow these instructions to determine the resource status and income treatment of the trust:
NOTE: If the trust beneficiary adds his or her own assets to an existing third party trust on or after 01/01/00, redevelop the trust under the instructions in SI 01120.199, SI 01120.201 through SI 01120.204, SI 01120.225 and SI 01120.227.
c. Consult regional instructions
Consult any regional instructions that pertain to trusts to see if there are any State or Tribal laws to consider on such issues as revocability or irrevocability and grantor trusts. You may also consult the title XVI Regional Chief Counsel (RCC) Precedents. For RCC precedents on trusts, see PS 01825.000.
d. Referring a trust to Regional Office (RO)
If there are unresolved issues that prevent you from determining the resource status of the trust, or there are issues that you believe need a legal opinion, follow your regional instructions or consult with your RO program staff via vHelp. If necessary, the RO staff will seek guidance from the central office (CO) or the Regional Chief Counsel (RCC). Do not contact or refer materials to the RCC directly.
NOTE: When referring a trust to the RO, make sure to include all documentation and an SSA-5002 (Report of Contact), if necessary, identifying the claimant, recipient, or deemor, source of funds or assets, relevant relationships of others named in the trust, and a brief summary of the unresolved issue(s).
2. General development for oral trusts
a. State recognizes as binding
If the State in question recognizes oral trusts as binding (see regional instructions):
Record all relevant information about the trust;
Obtain from all parties (alleged grantor, trustee, trust beneficiary) signed statements describing the arrangement; and
Unless regional instructions specify otherwise, refer the case to your RO staff. The RO will refer the case, through the Assistant Regional Commissioner for Management and Operations Support (ARC, MOS), to the Regional Chief Counsel.
NOTE: The special needs trust and pooled trust exceptions do not apply in the case of an oral trust since these exceptions require written evidence as part of the trust document. For more information on the special needs trust and pooled trust exceptions, see SI 01120.203A and SI 01120.203B.
b. State does not recognize as binding
If the State does not recognize oral trusts as binding (see regional instructions), see if an agency relationship exists. Develop under regular resource-counting rules or transfer of resources rules, as applicable. For transactions involving agents, see SI 01120.020.
3. Determining whether a trust is revocable or irrevocable
Determine whether a trust is revocable or irrevocable based on the terms of the trust and State law considerations (State grantor trust rules). For revocability of grantor trusts, see SI 01120.200D.3.
4. Determining if a trust is a resource
When determining whether a trust is a resource, apply the policies in regional instructions and SI 01120.201C and SI 01120.201D.
Once you establish revocability or irrevocability of a trust:
If the individual used his or her assets to establish a revocable trust on or after 01/01/00, count the trust corpus as a resource unless one of the exceptions in SI 01120.203B applies.
If the individual used his or her assets to establish an irrevocable trust on or after 01/01/00, and if the trust can make payments to or for the benefit of the individual or the individual's spouse under any circumstance, count the portion of the trust attributable to the individual's assets from which the trust can make payment to or for the benefit of the individual or spouse as a resource unless one of the exceptions in SI 01120.203B or SI 01120.203C applies.
If the individual used his or her assets to establish an irrevocable trust on or after 01/01/00, and if the trust cannot make payments to or for the benefit of the individual or the individual’s spouse under any circumstance, develop the establishment of the trust for a potential transfer of resources penalty using instructions in SI 01150.100.
NOTE: If you determine that the trust is a resource, you must determine if an exception or waiver in SI 01120.203 applies.
5. Developing legal instruments and devices similar to a trust
a. Which arrangements to develop
Obtain any written documentation and review the arrangement to determine if it meets the requirements in SI 01120.201G.
If so, determine whether the arrangement is a countable resource under regular SSI resource counting rules. If the resource is:
countable, develop the arrangement under the other applicable resource rules.
not countable, develop the arrangement following the procedures for developing trusts.
NOTE: Review only arrangements established with an individual's assets on or after 01/01/00. Do not develop legal instruments and devices similar to a trust established with an individual's assets prior to 01/01/00 under instructions in SI 01120.200. However, transfers to such an arrangement may be subject to the transfer of resources provisions. For transfer of resources, see SI 01150.100.
b. Referral to the RO
If you are unsure of whether the arrangement is one that you should develop as a legal instrument or device similar to a trust, refer the matter to the RO via the vHelp system. If necessary, the RO staff will seek guidance from the central office (CO) or the RCC. As we resolve cases over time, we develop precedents that make resolution of these issues easier.
6. Trust review process
Field office (FO) technicians evaluate all trusts that need a resource determination (such as a new or amended trust) in all initial claims (IC) and posteligibility (PE) events to determine the resource status of the trusts. For PE events, it is not necessary to reevaluate trusts that have a resource determination, unless there is:
an amendment to the trust, or
a clarification in policy that affects the resource determination. For resource status changes in PE events, see SI 01120.200J.7.
To ensure accurate and consistent trust resource determinations:
FO technicians submit their trust resource determinations and any related documentation to the Regional Trusts Reviewer Team (RTRT) for review using the Supplemental Security Income Trust Monitoring System (SSITMS) website.
The RTRT reviews all trust determinations and provides a decision and any feedback to the FO technicians via the SSITMS website.
FO technicians and RTRT members can use this (http://oestweb.ba.ad.ssa.gov/SSITM/) link to access the website. For instructions on using the SSITMS website, visit the user guide located under the Help link on the SSITMS website.
The following steps describe the trust review process for the FO technicians and RTRT members.
a. FO technician actions
For all IC and PE cases where a claimant, recipient, or deemor alleges ownership of a trust that needs a resource determination, determine whether the trust is a countable resource. To make the trust resource determination, follow the appropriate trust policies in SI 01120.199 through SI 01120.204, SI 01120.225, and SI 01120.227. Additionally, for pooled trusts:
After making a trust resource determination:
Document the determination along with any references and rationale used in the decision-making process.
For MSSICS cases, use the Report of Contact (DROC) screen.
For non-MSSICS cases, use a Report of Contact form (SSA-5002) and fax it into the electronic folder (EF) or Non-Disability Repository for Evidentiary Document (NDRED).
Fax the initial trust resource determination, trust document, and any pertinent information into the appropriate EF.
Then follow these trust review process steps:
Submitting trust determinations for RTRT review
Access the SSITMS website and select the Add New tab. Add the claimant or recipient’s name, representative payee’s name (if any), social security number, and all other relevant trust information.
Select the appropriate type of trust in SSITMS (third party trust, special needs trust, etc.).
Submit the trust resource determination for RTRT review.
Reviewing the RTRT responses
SSITMS sends an email notification after the trust reviewer (TR) or regional trust lead (RTL) reviews the trust and makes a decision. To view the RTRT’s response:
Access SSITMS and select the case from the Summary page listing or use the link in the email to access the case, and
Click on the “Details/Update” tab.
The Results field will show that the RTRT member either agreed or disagreed with the trust resource determination. When the FO technician is ready to process the case, change the trust status to “FO Effectuated” using the edit function.
NOTE: Select “FO Effectuated” only after completing all case development. Changing the Trust Status to “FO Effectuated” locks the case in SSITMS. Only the Remarks field will be accessible for additional comments.
Reevaluations of trust determinations
To request a reevaluation of a trust resource determination, access SSITMS and:
Change the Trust Status to “Referred to RTL” using the Edit function.
Provide rationale, a summary of supporting documentation, and appropriate references in SSITMS Remarks and select “Submit.”
The RTL will select the case for review and determine if the central office (CO) or the Office of General Counsel (OGC) needs to review the case. The RTL will respond to the request via the SSITMS website, and SSITMS sends an email notification when the RTL completes the reevaluation process.
Appeal requests of trust determinations
When the claimant or recipient appeals the trust resource determination, the RTL must review the FO’s reconsideration decision. To request a review of the trust reconsideration determination, access SSITMS and:
select “Recon Pending” from the Recon Trust Status dropdown using the Edit function, and
provide pertinent information about the reason for the appeal in FO remarks and select “Submit.”
NOTE: Do not enter RO Recon Trust Determination in SSITMS FO remarks. SSITMS will send an email notification when the RTL completes the Recon review
RTRT returns cases for FO further development
When the RTRT requires additional information from the FO, they will return the case for further development. SSITMS will send an email notification about the further development requested to the FO mailbox. To view the RTRT’s request, access SSITMS and:
select the case from the Summary page listings or use the link in the email to access the case, and
Click on the Details/Update tab.
View the request for additional information in the Remarks field. After completing the development requested, update the Trust Status to “FO Development Completed” using the edit button and submit.
b. Trust Reviewers (TR) actions
Trust reviewers (TR) review the FO technician’s trust resource determination along with any pertinent documentation in the Modernized Supplemental Security Income Claims System (MSSICS) and the Claims File Records Management System (CFRMS). When TRs receive a trust resource determination for review in SSITMS, TRs select the case with “Pending” trust status from the SSITMS summary listing, and:
Review the trust and associated information.
Provide feedback in the Remarks field in SSITMS.
Change the trust status to “Review Completed” after making a decision on the trust resource determination.
Indicate “agree” or “disagree” with the FO technician’s trust resource determination in Results.
Submit the response to the FO.
Additionally, TRs refer:
Trusts back to the FO when the case needs further development.
Refer trusts established outside their region to the RTL. The RTL will refer the trust to the appropriate region.
Refer pooled trusts to the RTL for review and inclusion in the precedent file.
c. Regional Trust Lead (RTL) actions
Regional trust Leads (RTL) review trust resource determinations for all pooled trusts, reevaluations, and appeals. When needed, RTLs request guidance from CO or OGC, and refer trusts to other regions for their input or decision. RTLs also refer trusts back to the FO when the case needs further development. Additionally, RTLs monitor the SSITMS website and add pooled trust precedents to the SSITMS SharePoint Repository for Precedents.
Follow these steps for the trust review process:
Reviewing pooled trust resource determinations
Select the case from SSITMS summary listing page or by using the link in the email notification, and:
Click the Details/Update tab.
Review information provided by the FO technician.
Determine if consultation with CO or OGC is necessary.
Provide the review results in the Remarks field.
Update Trust Status to “Completed by RTL”.
Indicate “agree” or “disagree” with the FO’s determination in Results and click “Submit.”
NOTE: Add a precedent to the SSITMS SharePoint Repository for Precedents for all pooled trusts that do not have a precedent in file. Use the SSITMS “Help” link to access the precedent library in the SharePoint site.
Email notifications for reevaluation requests
RTLs will receive an email notification whenever a trust resource determination needs reevaluation. To view the reevaluation request, access the case from the SSITMS Summary page listing.
Reevaluate trust resource determinations
To reevaluate the trust resource determination, follow steps listed in SI 01120.200A.6.c.1 in this section. The technician who submitted the case and the technician’s FO mailbox will receive an automated email notification when the RTL makes a decision. The subject line will show “Response to Trust for Reevaluation.”
SSITMS sends the RTL an email notification when he or she needs to review an FO determination on a trust reconsideration. To view appeal requests, access the case from the SSITMS Summary page listing or from the link in the email notification. To review the reconsideration determination, follow steps listed in SI 01120.202A.6.c.1 in this section. To address the appeal request, follow steps listed in SI 01120.202A.6.c.1 in this section.
The technician who submitted the case and the technician’s FO mailbox will receive an automated email notification when the RTL makes a decision. The subject line will show “Response to SSI Trust Recon for Review.”
B. Summary for trust development
1. Trust development
The following is a summary of trust development presented in a step-action format (For full development instructions, see SI 01120.202A):
Obtain and review a copy of the trust and all related documents.
Does the trust contain any assets of the individual?
If no, follow instructions in SI 01120.200. STOP.
NOTE: If the individual adds any of his or her assets to a third party trust on or after 01/01/00, redevelop the trust per SI 01120.201 through SI 01120.204.
If yes, go to Step 3.
Determine the date the individual transferred his or her assets to the trust. To know which instruction to follow, see SI 01120.201C.1 and SI 01120.202A.1.b.
If the individual transferred any of his or her assets prior to 01/01/00, follow instructions in SI 01120.200. STOP.
If the individual transferred all of his or her assets in the trust on or after 01/01/00, go to Step 4.
Consult national and regional instructions to determine if the trust is revocable or irrevocable (for determining revocability of the trust, see SI 01120.202A.3):
If you are unable to make a determination, consult with your RO programs staff.
If the trust is revocable, go to Step 5.
If the trust is irrevocable, go to Step 6 (SI 01120.201D.2).
The trust is a resource unless an exception applies. To see if an exception applies, go to SI 01120.203A. For treatment of revocable trusts, see SI 01120.201D.1.
For the policy on irrevocable trusts see SI 01120.201D.2.
Does the trust also contain assets of a third party?
Are there any circumstances that would allow payment from the trust to or for the benefit of the individual?
If no, the trust is not a resource, refer to SI 01150.100 to see if a transfer penalty is applicable.
If yes, the trust is a resource in the amount that the trust can pay out from the portion attributable to the individual unless an exception applies; go to SI 01120.203 to see if an exception applies.
2. FO actions during the trust review process
The following is a summary of the FO actions during the trust review process presented in a step-action format (For full development instructions, see SI 01120.202A.6.a in this section.):
Determine whether the trust is a countable resource. To help you evaluate the trust, follow steps in SI 01120.202B.1 in this section.
Go to step 2.
Submit your trust resource determination to the RTRT for review using the SSITMS website. Follow instructions in SI 01120.202A.6.a, in this section.
Go to step 3.
When the SSITMS sends the automated notification that the RTRT completed his or her review of the trust, access SSITMS to review the results.
Go to step 4
Do you agree with the RTRT’s review of the trust?
If yes, change the trust status in SSITMS to “FO effectuated” at the point when you are ready to adjudicate the IC or close the PE event. Do not change the status until all issues within the IC or PE event are resolved. STOP.
If not, request a reevaluation of the trust. For information on how to request a reevaluation, see SI 01120.202A.6.a.3.
NOTE: You have to wait for the reevaluation’s results to adjudicate your claim event.
3. RTRT actions during the trust review process
The following is a summary in a step-action format indicating the RTRT’s actions in the trust review process (For full development instructions, see SI 01120.202A.6.b in this section.):
Access SSITMS to select the case with “pending” trust status.
Go to step 2.
Is the trust a pooled trust or Indian Gaming Regulatory Act (IGRA) trust?
Review the FO’s trust resource determination. Use information documented in MSSICS and CFRMS to help with your review of the trust.
Go to step 4.
Determine whether you agree or disagree with the FO’s determination and provide feedback in the remarks section of SSITMS.
Go to step 5.
Select “Edit” to change the trust status to “Review Completed” and indicate in “Results” whether you agree or disagree with the FO technician’s trust resource determination.
Go to step 6.
Submit your response.
4. RTL actions during the trust review process
The following is a summary in a step-action format indicating the RTL actions in the trust review process. For full development, see SI 01120.202A.6.c in this section.
Access SSITMS to select the case from the SSITMS listing or from the link in the email notification.
Go to step 2.
Is this a reevaluation request?
If yes, go to step 3.
If no, go to step 6.
Review the FO and TR determinations and the remarks section to see the reason for the disagreement.
Go to step 4.
Determine if CO or OGC consultation is necessary to resolve the disagreement.
Contact CO or OGC if necessary and go to step 5 once you are ready to make a decision.
If CO or OGC input is not necessary, go to step 5.
Make a decision on the reevaluation and submit your response via SSITMS.
Is the trust established outside your region?
Review the FO’s trust resource determination for the IGRA trust or pooled trust.
NOTE: If the trust determination is for an IGRA trust or new- pooled trust, add a new precedent to SharePoint.
Contact OGC or CO if you need input while evaluating the trust.
Go to step 8.
Determine whether you agree or disagree with the FO’s determination and provide feedback in the remarks section of SSITMS.
Go to step 9
Select Edit to change status to “Review Completed” and indicate in “Results” whether you agree or disagree with the FO technician’s trust resource determination.
Go to step 10
Submit your response.
C. Procedure for documenting trusts
1. Documenting trusts in MSSICS
Document the existence of a trust in MSSICS by answering Yes on the Resource Selection (RMEN) page to the Trusts question. A Yes answer will bring the Trust (RTRS) page into the path.
Complete the applicable trust questions on the Trust page.
If an exception applies, enter the value of the trust in excluded amount and select the exclusion type, e.g., meets special needs trust requirements or undue hardship, from the exclusion reason drop down menu.
Record all information used in determining whether the trust is a resource and whether it generates income in the Trust page in MSSICS. For more information on what information to record, see MSOM INTRANETSSI 013.005. Record your conclusion in the FILE DOCUMENTATION NOTES section or on the DROC screen. Then annotate evidence on the EVID screen.
2. Documenting trust on paper forms
Document the existence of a trust on the appropriate resources question on the form or in remarks.
Record all information used in determining whether the trust is a resource and whether it generates income. Record your conclusions on an SSA-5002 or SSA-553 (Special Determination). Document evidence on the EVID screen (see GN 00301.286) even on non-MSSICS cases.
3. Documentation requirements in all cases
Include in the file:
A copy of the trust document, if any;
Copies of any signed documents between organizations making payments to the individual and the individual legally entitled to such payments, if the payments have been assigned, either revocably or irrevocably, to the trust or trustee;
Source of assets funding the trust and
Records of any payments or disbursements from the trust, as necessary; and
Any other pertinent documents.
D. Procedure for coding trusts
1. Coding Medicaid trusts on paper
Code a Q and the date of establishment of the trust in the Third party Liability (PT) field of the Supplemental Security Record (SSR) if the trust qualifies as a Medicaid Trust.
2. Coding Medicaid trusts in MSSICS
As of the issuance of these instructions, MSSICS does not automatically post the Q code to the PT field of the SSR; do a manual entry per SI 01120.202D. For more information on the third party insurance field, see SM 01005.350.
3. Coding the CG field
Code RE06 or RE07, as applicable in the CG (case characteristics) field to indicate a revocable or irrevocable trust, respectively. (For a list of CG code entries see SM 01301.820.)
E. Procedure for Medicaid determination
1. When not to make Medicaid eligibility determination
If the individual resides in a section 1634 State (in which SSA makes Medicaid determinations on behalf of the State), do not attempt to make a Medicaid eligibility determination since the Medicaid determination regarding the trust may differ from the SSI eligibility determination. (For a discussion of Section 1634 States see SI 01715.010A.3.)
2. Prepare manual notice
Post-eligibility discovery of a trust in a section 1634 State will not result in a correct automated notice paragraph. Suppress any automated notice and prepare a manual notice using Medicaid Paragraph 1147 in NL 00804.110.
NOTE: If the individual is blind or visually impaired, see instructions on the special blind or visually impaired notice options in NL 01001.010.
3. Send trust information to State
a. 1634 States
Copy the trust information and send it to the same address used for assignment of rights (AOR) and third party liability (TPL) information. See regional instructions or contact your RO staff for the correct address.
b. 209(b) and SSI criteria States
In States where SSA does not have an agreement to make the Medicaid eligibility determination:
F. Examples of trust evaluations
1. Example when the trust principal is a resource
The 20-year-old SSI claimant is the beneficiary of an irrevocable trust. The court established the trust in 02/2014 with the proceeds of the settlement of a lawsuit. The claimant lives with her parents, who support her fully. Her parents filed a medical malpractice suit on her behalf against her doctor. The doctor's insurance company settled the lawsuit before it went to trial for $400,000. The court approved the settlement agreement, whereby, the insurance company placed the money in trust for the claimant, naming her parents as trustees. The trust permits payments for the claimant's special needs other than support and maintenance. The trust does not provide for reimbursement of Medicaid expenditures to the State on behalf of the claimant.
The trust was established with assets of the claimant. Although she never received them directly, the settlement proceeds meet the definition of assets in SI 01120.201B.2. Her parents, acting on her behalf, approved the establishment of the trust. The court directed the proceeds to establish the trust after 01/01/00. Although the trust was legally irrevocable under State law, the trust permitted disbursement of all the funds in the trust for the benefit of the claimant. Therefore, the trust is a resource in its full amount, $400,000. The claimant is ineligible due to excess resources.
2. Example when Individual's assets form only part of the trust
See example of when the individual’s assets form only a part of the trust in SI 01120.201C.2.c.
3. Example when part of the individual's assets in the trust are countable
Bill Murray is an SSI recipient. His wife, who is not eligible, won $150,000 in the State lottery, of which she received $85,000. She used the money to establish the Murray Family Irrevocable Trust. The trust stipulates that she can only use $40,000 for their daughter's college education. She can use the remainder of the money for a number of purposes at the discretion of the trustee, including supplemental needs for Bill and income payments to his wife.
Since Mrs. Murray established the trust with her assets and she can only pay $45,000 to or for the benefit of, Mr. Murray, we will count $45,000 as a resource. We consider the remaining $40,000 in the trust a transfer of resources that we must evaluate under SI 01150.100.
4. Example when the trust principal is not a resource
a. Trust established by a third party
Woody King is a disabled young adult. In 08/2014, his parents established an irrevocable special-needs trust on his behalf with $100,000 of their own funds. Prior to attaining age 18, he was ineligible because of the income and resources of his parents through deeming. Now that he has attained age 18, he is reapplying for SSI.
Mr. King's resources do not include the trust established by his parents since he was not the grantor of the trust and it is irrevocable. As long as his other income and resources are within the limits, he is eligible for SSI. However, since the trust is not a resource, payments from the trust, to or for the trust beneficiary, may be income.
NOTE: A third party trust can be revocable and not count as a resource as long as the trust beneficiary does not have the legal authority to revoke the trust or direct the use of the trust assets.
b. Trust self-established but no payment can be made to or for the benefit of the individual
Arnie Becker is permanently disabled due to an injury he suffered in an automobile accident. Mr. Becker received a $3.5 million dollar insurance settlement that went into two irrevocable trusts. The first trust is a discretionary trust providing $2.5 million for the education and welfare of his children. The second trust is a charitable trust containing $1 million. The trustee must distribute annually the earnings on the trust in the form of scholarships for students at a nearby college.
Although Mr. Becker's trusts constitute a very large amount of money, none of it goes to him or to provide for his or his spouse's needs. SSA does not count the trusts as resources for SSI purposes. However, the establishment of the trusts is a transfer of resources under SI 01150.100. Mr. Becker will likely be ineligible for SSI for at least 36 months.
5. Trust includes excluded resources
a. Example of a burial trust
Mattie Walker, an SSI recipient, wishes to plan her funeral through a prepaid agreement. In the State where she lives, recipients of public assistance, including SSI, must place the funds for their prepaid agreement into a funeral trust. Ms. Walker enters into a contract for a casket and vault valued at $5,000, and the funeral services she wants are valued at $1,500. She places the full amount in a revocable trust. As required by State law, the trust shows Ms. Walker as the grantor and the funeral home as the trust beneficiary.
The revocable funeral trust is a resource under SSI burial trust policy in SI 01120.201H.2. This is the case because Ms. Walker is the grantor of the trust and the trust is revocable. The purpose of the trust is irrelevant for purposes of trust policy (SI 01120.201C.2.d).
However, since the trust is an otherwise countable resource, the SSI burial exclusions apply to the funds. We exclude the vault and the casket as burial spaces. We exclude the $1,500 for funeral services under the $1,500 burial funds exclusion. Therefore, we can exclude the total value of the trust. If the amount of funds for funeral services exceeds $1,500 (other than interest or appreciation), we could exclude up to $1,500, and the remaining amount would be countable.
For the burial space exclusion see SI 01130.400 and for the burial fund exclusion see SI 01130.409 through SI 01130.425.
NOTE: If a trust does not permit the use of the funds in the trust for burial, the burial exclusions are generally not applicable. Upon the individual's death, the individual would no longer be a beneficiary of the trust unless the trust specifically provides otherwise. Therefore, individuals cannot desig