Trust Declaration of [name of settlor]
This declaration of trust is made by [name of settlor], Settlor, who is also a beneficiary of this trust.
1.Name of Trust and Trust Purpose. This trust shall be known as the [name of settlor] Income Trust. Settlor requires continuing medical and nursing supervision and is dependent on others for [his/her] personal care. The overriding purpose of this trust is to obtain the necessary care from whatever sources may be available. To that end this trust is designed to assist Settlor in meeting the requirements of eligibility for benefits under the Medical Assistance Program in the state of Texas, under the provisions of 42 U.S.C. § 1396p(d)(4)(B), as amended by the Omnibus Budget Reconciliation Act of 1993 (effective August 10, 1993), and all other applicable laws, regulations, and administrative procedures.
2.Settlor. Settlor [, settlor’s spouse if applicable,] and the Texas Department of Human Services shall be the sole beneficiaries of the trust. Settlor’s Social Security number is [number]. Settlor resides at [address, city, county] County, Texas.
3.Appointment of Trustee. Settlor appoints [name of trustee], Trustee, as the trustee of this trust. Trustee shall serve without bond or supervision of any court.
4.Trust Estate.
4.1. Income Trust. It is Settlor’s intent to transfer all or part of [his/her] income into the trust, to be held and managed as the trust estate. Only Settlor’s “income,” as defined by the rules and laws governing the Medical Assistance Program in Texas, may be transferred to the trust, as listed on Exhibit A, attached to this trust.
4.2.When Income Transferred. Settlor’s income that will be transferred to the trust shall be transferred in the same month in which it is received by Settlor, unless a longer time is authorized by regulation or written directive by the agency administering the Medical Assistance Program. Income may be transferred directly from the income source to the trust.
4.3.All Income from Same Source. If income from any source is transferred to the trust in a given month, all income from that source shall be transferred to the trust in the same month. For example, Trustee may not transfer only a part of Settlor’s Social Security income to the trust in any given month; either all or none must be transferred in that month.
5.Disposition of Principal and Income.
5.1.Distributions for Benefit of Settlor. To the extent required by the Medical Assistance Program, income placed in the trust must be paid out of the trust for medical care provided to Settlor, including nursing facility or ICF/MR or home/community-based waiver services provided to Settlor. Payments must be made by Trustee not later than the last day of the month following the month of receipt of the income or within any other time period that may be required by the Medicaid program. Subject to the requirements of this trust, Trustee may make other distributions of principal and/or interest for Settlor’s health, education, maintenance, and support, as Trustee, in Trustee’s discretion, deems advisable. Other distributions may include payment of the administrative fees of the trust, income tax owed by the trust, attorney’s fees the trust is obligated to pay (in proportion to whatever part of the trust benefits Settlor), food or clothing for Settlor, or mortgage payments for Settlor’s home.
5.2.Maintenance of Qualification for Public Benefits. The overriding purpose of this trust is to assure eligibility of Settlor for Medical Assistance Program benefits. Therefore, Trustee shall make distributions from the trust in amounts and for the purposes necessary to maintain such eligibility, and only in amounts and for purposes that do not defeat eligibility, notwithstanding any other provision of this trust. Among the requirements of the Medical Assistance Program at the time of establishment of this trust, which Trustee shall meet as long as and to the extent required, is the requirement that Trustee make payments from the trust in the following priority:
a.A monthly personal needs allowance for the needs of Settlor; then
b.If Settlor is married, a sum to Settlor’s spouse sufficient to provide the minimum monthly maintenance needs allowance for the spouse; then
c.From the funds remaining, if any, the cost of medical assistance provided Settlor.
5.3.Payments for Settlor’s Spouse. Subject to sections 5.1 and 5.2 above, all trust funds that can be paid to Settlor’s spouse, if any, without reduction or loss of Settlor’s eligibility for public benefits, shall be used by Trustee for the benefit of Settlor’s spouse. Trustee may exercise discretion in determining the purposes for which such payments are made but shall have no discretion to make payments to or for the benefit of any person or entity other than Settlor’s spouse. The trust cannot be terminated and distributed to any other individuals or entities for any other purpose.
6.Termination of Trust.
6.1.Irrevocability. This trust is irrevocable.
6.2.Termination. This trust shall terminate upon Settlor’s death. Upon termination, the remaining trust property, if any, shall be distributed as described in section 6.3 below.
6.3.Distribution upon Termination. At Settlor’s death, Trustee shall distribute to the Texas Department of Human Services or its successor agency as reimbursement any remaining trust property up to an amount equal to the total medical assistance paid on behalf of Settlor by the Texas Medical Assistance Program. All remaining trust property shall be distributed to the named beneficiaries of the last will and testament of Settlor in the amounts and/or proportions therein, or in the event Settlor dies intestate, to [his/her] heirs at law as provided by Texas law at the time of [his/her] death.
7.Trust Administrative and Protective Provisions.
7.1.Jurisdiction. This trust shall be administered expeditiously and consistently with its terms, and without any judicial intervention, order, approval, or other action by a court, subject only to the jurisdiction of a court that is invoked by Trustee or other interested parties or as otherwise provided by law.
7.2.Reports. Periodic reports shall not be made unless required by the regulations of the Texas Department of Human Services. The trust records shall be open at all reasonable times to inspection by Settlor, the Texas Department of Human Services, and their properly appointed representatives.
8.Powers of Trustee. In addition to all of those powers specifically granted by this trust, Trustee may exercise those powers included in title 9 of the Texas Property Code (the Texas Trust Code), together with any amendments to the Code after the date of this trust.
9.Trustee Succession and Administrative Provisions.
1.Resignation of Trustee and Appointment of Successor Trustee. Any trustee may resign by giving thirty (30) days’ written notice to Settlor or to the guardian, conservator, or other legal representative of Settlor. The trustee’s resignation shall be effective thirty days from the date notice is given. In the event the trustee resigns or dies while holding office, [name of successor trustee] shall serve as successor Trustee. Any trustee may, while serving as trustee, appoint one or more successor trustees and may alter the succession of trustees indicated in this trust. If any trustee ceases to act as trustee at a time when no successor trustee who is able and willing to serve has been appointed either by this trust or by the trustee, any interested person may apply to be appointed successor trustee as set forth in section 113.083 of the Texas Property Code.
9.3.Representative of Settlor. The guardian of Settlor or, if none, the agent of Settlor acting under a general power of attorney may act for Settlor for all purposes under the administrative provisions of this trust.
9.4.Rights of Successors. Every successor trustee shall have all the title, rights, powers, privileges, and duties of the original trustee, without any conveyance or transfer. No successor trustee shall be responsible for any act or omission to act by any previous trustee.
9.5.No Bond. No trustee shall be required to give any bond in any jurisdiction, and if, notwithstanding this direction, any bond is required by any law, statute, or rule of court, no sureties shall be required.
2.Definitions.
10.1. Reference to Codes. Except as otherwise provided, definitions of terms in this trust shall be in accordance with the Texas Estates Code and Texas Property Code, as amended.
10.2. Successor Agencies and Programs. All references in this trust to the Texas Department of Human Services and the Medical Assistance Program shall include any successor public agency or program.
3.Construction.
11.1. Conformity with Statutes. In case of ambiguity or conflict, this trust shall be construed to comply with the provisions of the Texas Trust Code, as amended.
11.2. Applicable Law. The validity of this trust shall be determined by reference to the laws of the state of Texas. Questions of construction and administration of this trust shall be determined by reference to the laws of the state of Texas.
11.3. Headings of Articles and Sections. The headings of articles and sections are included solely for convenience of reference and shall have no significance in the interpretation of this agreement.
11.4. Construction of Number and Gender. Unless the context requires otherwise, words denoting the singular may be construed as denoting the plural, words denoting the plural may be construed as denoting the singular, and words of one gender may be construed as denoting another gender, as appropriate.
SIGNED by [name of settlor], Settlor, and [name of trustee], Trustee, who accepts the office of Trustee, on [date].
[Name of settlor] Settlor
This instrument was acknowledged before me on [date] by [name of settlor] in the above-stated capacity.
Notary Public, State of Texas
[Name of trustee] Trustee
This instrument was acknowledged before me on [date] by [name of trustee] in the above-stated capacity.
Notary Public, State of Texas
Exhibit A
Income for [name of settlor]
Income Source
[list sources of income]