What are the rules for Medicaid trusts?

Medicaid trusts are special types of trusts which are created in order to protect assets from being counted as a resource when determining eligibility for Medicaid. In Oregon, the rules governing Medicaid trusts are determined by the Oregon Medicaid Planning Law, which was established in 1999. Under the Oregon Medicaid Planning Law, a Medicaid trust must be irrevocable, meaning that it cannot be changed or terminated after it is established. The trust must also include certain specific provisions, such as a clause stating that the trust is irrevocable and a provision that the trust’s assets must be used solely for Medicaid qualifying expenses, such as long-term supportive care costs. The trustee or trustees in charge of administering the trust must be qualified individuals or organizations such as a law firm, bank, or other financial institution. Trustees are responsible for managing and distributing the trust’s assets according to the Oregon Medicaid Planning Law and the trust document. The assets of the trust are available to the beneficiary only for Medicaid qualifying expenses and cannot be liquidated or transferred. The trust also cannot be used to purchase items or services which are not deemed to be medically necessary by the Oregon Department of Human Services. Finally, all Medicaid trusts created in Oregon must have a written trust document that meets all the requirements of the Oregon Medicaid Planning Law. This document must be approved by the Department of Human Services before it is valid.

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