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Special Treatment Trusts (STTs) may allow people who would not otherwise qualify due to excess resources or income to become eligible for ALTCS. The assets in a STT are not counted for the income and resource tests. In return, AHCCCS recovers the cost of these benefits from the trust upon the death of the customer or termination of the trust.
There are three types of STT:
Trusts for Individuals Under Age 65 with a Disability;
Income-Only Trusts; and
Pooled Trusts.
The trust must meet certain conditions to qualify as a STT. If a trust does not meet these conditions, it does not qualify for special treatment. All STTs are reviewed by AHCCCS to ensure that they qualify for special treatment.
The conditions that apply to all three STT types are listed in the table below:
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Condition |
Description |
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Date of creation |
The trust must be created on or after August 11, 1993. NOTE A trust created before August 11, 1993 must be dissolved and recreated to qualify as a STT. |
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Customer as beneficiary |
The customer must be designated as the beneficiary of the trust. |
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AHCCCS or “State Medicaid Agency” as remainder beneficiary |
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Restrictions on disbursements |
The trust must state that disbursements cannot be made for purposes other than those described in ARS §36-2934.01. Additionally, the trust cannot allow the trustee to make disbursements which are prohibited by ARS §36-2934.01. As one example, a trust cannot allow a trustee to make loans to other people. Thus, a trust that generally allows a trustee to make “loans” is too vague and does not comply with ARS §36-2934.01. |
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Restrictions on trust expenses |
The trust must state that it will allow disbursements for reasonable and necessary administrative expenses as approved by AHCCCS, or by the Probate Court with advance notice to AHCCCS. Further, any provision allowing for such reasonable and necessary administrative expenses must state that it will allow for those expenses as approved by AHCCCS, or by the Probate Court with advance notice to AHCCCS. |
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Share of cost |
The trust must state that on a monthly basis, the trustee is to pay any share of cost amount from the trust income. NOTE This only applies when the trust receives income that is counted in the share of cost calculation. |
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References to moves out of state |
To retain Arizona’s beneficiary rights, the trust cannot require all references to Arizona, ALTCS or AHCCCS to be replaced by parallel references to a Medicaid agency in another state. |
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Direct deposit |
The trust must require that all income assigned to the trust by the grantor be directly deposited, when legally allowed, into an account titled to the trust. |
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Financial account with trust assets |
Any financial account created with trust assets must be titled to show that the account is held by the trust. Example:
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Reference to federal law |
The trust must contain reference to:
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The conditions and proof that are unique to each type of STT are covered in the following sections:
MA803B - Trusts for Individuals Under Age 65 with a Disability;
MA803C - Income-Only Trusts; and
MA803D - Pooled Trusts.
When the customer is over the ALTCS income or resource limit and a STT might provide a way for the customer to qualify, see Providing Special Treatment Trust Information to Customers.
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Term |
Definition |
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Beneficiary |
A person or entity entitled to receive the principal, income or both from a trust. |
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Disbursement |
A payment or distribution from the trust corpus or trust earnings. |
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Trust corpus |
The income and resources that fund the trust. The resources or income in the trust corpus may be available to the customer, but are no longer owned by the customer. The trust corpus may also be called the trust principal. |
The proof needed to show the trust document meets all of the conditions for special treatment includes:
All pages of the trust document, including any schedules, amendments, restatements and signature pages;
Power of Attorney, legal guardianship or conservatorship documents when someone other than the beneficiary, spouse, or parent of a minor beneficiary created the trust;
NOTE When the customer’s spouse signs the trust for the customer as POA, guardian, or conservator, the POA, guardianship, or conservatorship documents are required.
Any court documents related to the trust;
For any income assigned to the trust, a copy of the request to the income source for direct deposit to the trust account;
For financial accounts containing trust assets, all account statements from the date the trust account was opened through the current month; and
Documents like quit claim deeds, vehicle titles, and bank statements showing that items assigned to the trust have been titled to the trust.
Being listed on the Trust Assets Schedule does not automatically make an item an asset of the trust. It must also be legally titled to the trust.
Proof needed for a trust that has been revoked - If the trust has been revoked, a written statement signed and dated by a person with the authority to revoke the trust. A trust will normally be revoked by the same method that created it:
When the trust document was notarized, the written statement revoking the trust must be notarized.
When a court initially approved the trust, the revocation must be approved by the court.
When you get documents showing that a trust has been revoked, submit a PCR for review. See How to Review and Refer a Trust for instructions.
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Program |
Legal Authorities |
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ALTCS |
42 USC § 1396p(d) ARS § 36-2934.01 AAC R9-28-407.E AAC R9-28-408.F |