TN 12 (08-00)

SI 01150.121 Exceptions — Transfers to a Trust

A. Policy — Exception for transfers to a trust

The period of ineligibility for transferring a resource at less than fair market value does not apply to an individual in the following situations.

1. The Trust is a Countable Resource

The period of ineligibility does not apply to an individual who transfers resources to a trust if either of the following is true:

  • the portion of the trust attributable to the transferred resources is a countable resource of the individual (i.e., the trust is countable as a resource for purposes of determining SSI eligibility). (See SI 01120.200.)

  • the trust would be considered a countable resource but for the undue hardship provision applicable to trusts.

2. Transfers to a Trust for Disabled or Blind Child

The period of ineligibility does not apply to an individual who transfers a resource to a trust established for the sole benefit of the individual's child of any age who is blind or disabled. This includes trusts qualifying as “Medicaid trust exceptions” in SI 01120.200 ff. (i.e., trusts established under Section 1917(d)(4)(A) and (C) of the Social Security Act).

3. Transfers to a Trust for a Disabled or Blind Individual Under Age 65

The period of ineligibility does not apply to an individual who transfers a resource to a trust established for the sole benefit of an individual including himself or herself who is under age 65 and is blind or disabled. This includes trusts qualifying as “Medicaid trust exceptions” in SI 01120.200 ff. (i.e., trusts established under Section 1917(d)(4)(A) and (C) of the Social Security Act).

B. Policy — Transfers to trusts where exception does not apply

In the following situations related to trusts, the exception does not apply:

1. The Trust is not a Countable Resource

If the trust is not countable as a resource, money or property transferred by the individual into the trust is a transfer of resources that is subject to the period of ineligibility unless one of the exceptions in SI 01150.121A.2. or SI 01150.121A.3. applies.

2. Disbursement Made from the Trust not for the Individual

If a disbursement is made from a trust that is counted as a resource (or would be counted as a resource but for the undue hardship provision applicable to trusts), and the disbursement is not made to the individual or for his/her benefit, then the disbursement is considered a transfer of resources for less than fair market value. Such a transfer of resources is subject to the period of ineligibility. The date of the disbursement is considered the date of the transfer. See SI 01120.200 ff. for discussion of disbursements from trusts.

3. No Disbursement Can be Made From the Trust

If the individual takes action so that no disbursement can be made from a trust that is counted as a resource to the individual for any reason, this action causes the trust to no longer be counted as a resource. Therefore, such an action is considered a transfer of resources for less than fair market value. Such a transfer of resources is subject to the period of ineligibility. The date of the action restricting disbursements is considered the date of the transfer.

C. Procedure — Documenting transfer to a trust exception

Develop a transfer to a trust as follows:

1. Evidence

  • Verify the amount of the transfer, the transfer date, and that the funds went into the trust considering the individual's statement either signed or recorded on a DROC, and available documents (e.g., bank statements, receipts, trust documents, etc.). The individual's statement, by itself, is not sufficient evidence.

  • As needed, verify that the individual for whom the trust was established meets the SSI requirements for blindness or disability. (See SI 01150.121D.)

  • As needed, verify that the individual for whom the trust was established is the child of the transferor. (The supplemental security record (SSR), master beneficiary record (MBR), or Numident may be used.)

  • As needed, verify that the trust was established for the sole benefit of the child or individual by reviewing the trust documents. (See SI 01150.120C. for discussion of “sole benefit”.)

2. Making the Determination

  • Follow the guidelines in SI 01120.200 ff. to determine whether the trust is a resource of the individual.

  • If the trust is not a resource, the transfer exception does not apply and the individual may be ineligible due to the transfer of resources.

  • If the trust is a resource, the transfer exception applies. It will be necessary to determine if the individual is ineligible for SSI due to counting the trust as a resource.

  • If the exception applies, do not establish a period of ineligibility due to the resource transfer. Document the file with the adjudicator's determination. For example: “Resource transferred on 2/5/00. Meets exception for transfer to a trust per SI 01150.121. Period of ineligibility does not apply.”

3. Systems Input

  • Record the evidence used on the EVID screen found in the Shared Processes Menu (MSOM EVID 001.001 ).

  • Include in the file a copy of the trust document if not already in file based on the requirements in SI 01120.200J. for documenting a trust.

  • Record the determination on MSSICS using the File Documentation Notes section of the Property/Cash Given or Sold (RGIV) page or DROC (MSOM MSSICS 022.010 ). On non-MSSICS cases, use a Report of Contact.

4. Medicaid Notification

Notify the State Medicaid agency about the transferred resource unless the SSI claim is denied. (SI 01150.012)

D. Procedure — Establishing that a child or individual is blind or disabled

If an exception requires that the transfer was to a blind or disabled child or individual, it is necessary to establish that the child or individual was blind or disabled at the time of the transfer.

1. Individual Eligible for T2 or T16

Assume that a child or individual who was eligible for T2 or T16 benefits based on blindness or disability at the time of the transfer meets the definition of blindness or disability for purposes of this exception. For this purpose, “eligible” includes an individual in a payment suspension status but not in a payment termination status.

2. Individual Not Eligible for T2 or T16

If the individual who received the transferred resource was not eligible for T2 or T16 benefits based on blindness or disability at the time of the transfer, obtain a disability determination from the disability determination services (DDS) as follows:

a. Obtain an SSA Application

  • Contact the individual or child who received the transferred resource and obtain an application for SSI disability/blindness benefits.

  • Defer development of nonmedical eligibility if income or resources would make the individual or child ineligible. However, develop nonmedical eligibility following normal procedures if the individual may be eligible for SSI.

b. Sending the Case to the DDS

  • Send the case to the DDS for a medical determination with an alleged date of onset equal to the date of the transfer.

  • On MSSICS cases, input that date in the Onset Date field on ADIB (MSOM MSSICS 008.010 ). Disability determination needed for SSI transfer of resources case. Alleged onset date mm/dd/yy is the date of the resource transfer. See SI 01150.121.

  • For MSSICS and non-MSSICS cases, annotate the SSA-3368-BK as follows. In Section 2.A. after the description of illnesses, add the following: “Disability determination needed for SSI transfer of resources case. Alleged onset date mm/dd/yy is the date of the resource transfer. See SI 01150.121.”

  • For MSSICS and non-MSSICS cases, annotate the SSA-3820-BK as follows. In Section 3. after the description of illnesses, add the following: “Disability determination needed for SSI transfer of resources case. Alleged onset date mm/dd/yy is the date of the resource transfer. See SI 01150.121.”

  • Hold the case in H-80 pending the DDS determination. Never deny the case for a non-medical reason until after the DDS determination is received.

c. Processing the Case

  • When the DDS determination is received, process the case to pay or denial.

  • Use the DDS determination to determine if the individual who transferred the resource qualifies for the exception to the period of ineligibility.

  • If the claim for the person who received the transferred resource is denied, do not delay the adjudication of the transferor's claim if an appeal is filed.

  • If the individual who received the resource refuses to file a disability claim, the exception does not apply for the transferor.

NOTE: If the individual who transferred the resource is filing for SSI based on disability, send that case to the DDS at the same time as you send the case for the individual who received the transferred resource.

E. References

Completing the SSA-3368-BK, DI 11005.023

Completing the SSA-3820-BK, DI 11005.030

Trusts, SI 01120.200 ff.

Notifying State Medicaid agency, SI 01150.012

MSSICS ADIB screen, MSOM MSSICS 008.010

MSSICS DDTR screen, MSOM MSSICS 022.006

MSSICS DROC screen, MSOM MSSICS 022.010

EVID screen, MSOM EVID 001.001


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0501150121
SI 01150.121 - Exceptions -- Transfers to a Trust - 12/24/2013
Batch run: 12/24/2013
Rev:12/24/2013