Source: https://secure.ssa.gov/apps10/poms.nsf/lnx/1601825052
Timestamp: 2018-12-19 00:11:40
Document Index: 581261128

Matched Legal Cases: ['§ 64', '§ 64', '§ 64', '§ 64', 'Art. 1', 'Art. 1', 'Art. 1', '§ 1396', 'Art. 1']

SSA - POMS: PS 01825.052 - Virginia - 01/19/2018
The 2014 restatement does not satisfy the pooled trust exception. Per the 2014 provisions, a for-profit corporation Trust Company of Virginia (TCVA)[1] acted as its Trustee (or at least, co-Trustee), and the restatement did not make clear that CCT retained supervisory authority over the management of the beneficiaries’ subtrusts.
S~, a disabled beneficiary, executed a Joinder Agreement to join the CCT Master Trust in July 2014. She established a trust account with $38,710.42 of her assets from the sale of a residence. See S~ Joinder.[2]
The 2014 Restatement of CCT Master Trust[3]
Under Virginia law, a trustee may exercise those powers “conferred by the terms of the trust,” and may exercise certain further powers “except as limited by terms of the trust.” Va. Code Ann. § 64.2-777(A). In addition, the exercise of a power by the trustee is subject to the fiduciary duties prescribed by the Virginia trust code. § 64.2-777(B).[4]
The 2016 restatement limits TCVA’s power and effectively eliminates its supervisory and/or discretionary role. Thus, while TCVA has the same fiduciary duties,[5] the 2016 restatement makes clear that CCT controls, directs, or supervises TCVA’s acts. Since CCT has oversight over TCVA, the 2016 restatement is consistent with the Act and the POMS.
In Virginia, the terms of the trust prevail over the provisions of the Uniform Trust Code, except in certain circumstances. Va. Code Ann. § 64.2-703. Virginia law allows a settlor and beneficiaries to consent to the modification or termination of a noncharitable irrevocable trust. Va. Code Ann. § 64.2-729(A). This suggests that a grantor who is the sole beneficiary of a trust may be able to revoke the trust. With respect to S~, however, she has expressly named primary successor beneficiaries. Accordingly, S~ does not have the ability to revoke the trust.[6]
In the 2016 restatement, CCT or the court may terminate the trust during the beneficiary’s lifetime. Art. 1, § G. In that situation, the trustee shall “first” distribute to the states all amounts remaining in the trust at the time of termination up to an amount equal to the total amount of medical assistance paid on behalf of the individual under the state’s Medicaid plan. Art. 1, § G. After reimbursement to the State(s), all remaining funds shall be distributed to the beneficiary and to no entity, other than payment of taxes and administrative expenses allowed by POMS[7] or to another entity as specified in Article 1, section H. Art. 1, § G. Article 1, section H states that the trustee, as directed by CCT, may transfer the entire balance of the trust fund to another 42 U.S.C. § 1396p trust. Art. 1, § H.
This early termination provision does not appear to satisfy POMS SI 01120.199.F.1 or 2. POMS provides that on early termination, the trust proceeds either go the beneficiary after Medicaid reimbursement and payment of permissible administrative expenses, OR the trust proceeds are transferred to another Medicaid pooled trust. Here, however, the language in section G seems to conflate the beneficiary and “another entity” provisions. In addition, the language in section H is problematic because it is overbroad; it does not specify that the transfer must be to another Medicaid pooled trust (i.e., the transfer must be to a section 1396p(d)(4)(C) trust as opposed to section 1396p(d)(4) trust). The provisions (sections G and H) should be clarified to more clearly follow POMS.[8]
http://policy.ssa.gov/poms.nsf/lnx/1601825052
PS 01825.052 - Virginia - 01/19/2018