Iowa Miller Trust / Medical Assistance Income Trust (MAIT)

IOWA MEDICAL ASSISTANCE INCOME TRUST (MILLER TRUST / QIT)

IRREVOCABLE TRUST AGREEMENT UNDER 42 U.S.C. § 1396p(d)(4)(B) AND IOWA CODE CHAPTER 633C

ARTICLE I. ESTABLISHMENT AND PURPOSE

1.1 Establishment

This Medical Assistance Income Trust ("Trust" or "MAIT") is established this [__] day of [__________], 20[__], by [____________________________] (the "Settlor"), of [City], [County] County, Iowa, who hereby transfers and assigns to [____________________________] (the "Trustee") the income described in Article III, IN TRUST, for the uses and purposes set forth below.

1.2 Statutory Authority

This Trust is intended to qualify as:

• A "Qualified Income Trust" under Section 1917(d)(4)(B) of the Social Security Act, codified at 42 U.S.C. § 1396p(d)(4)(B); and
• A "Medical Assistance Income Trust" under Iowa Code Chapter 633C (specifically §§ 633C.1 through 633C.5) and Iowa Administrative Code rule 441-75.24(3)(b) as administered by the Iowa Department of Health and Human Services ("Iowa HHS") pursuant to Iowa Code § 249A.4.

1.3 Purpose

The sole purpose of this Trust is to enable the Settlor to qualify for and continue to receive Iowa Medicaid long-term care benefits (nursing facility, intermediate care facility for individuals with intellectual disabilities ("ICF/ID"), or Home and Community-Based Services ("HCBS") waiver benefits) notwithstanding monthly gross income in excess of the institutional income standard (three times the federal SSI benefit rate, the "300% SSI cap") set forth in 441 IAC Chapter 75.

1.4 Irrevocability

This Trust is and shall be IRREVOCABLE. The Settlor expressly disclaims and renounces any right or power to alter, amend, modify, revoke, or terminate this Trust, in whole or in part, except as required to conform to changes in 42 U.S.C. § 1396p(d)(4)(B), Iowa Code Chapter 633C, 441 IAC 75.24, or other governing law.

ARTICLE II. PARTIES

2.1 Settlor Information

☐ The Settlor is the Medicaid applicant / recipient.
☐ The Settlor is acting through a duly appointed attorney-in-fact under a valid Iowa durable power of attorney dated [__/__/____].
☐ The Settlor is acting through a court-appointed guardian / conservator under Iowa Code Chapter 633 (Iowa Probate Code).

2.2 Trustee

The Trustee shall be an individual or entity authorized to act as trustee under Iowa law. The Settlor shall not serve as Trustee.

☐ Individual trustee (family member, friend, or fiduciary): [____________________________]
☐ Iowa state-chartered bank or trust company: [____________________________]
☐ National bank with Iowa trust powers: [____________________________]
☐ Successor trustee: [____________________________]

2.3 Trustee's Acceptance

The Trustee accepts the Trust and agrees to administer it in accordance with this instrument, 42 U.S.C. § 1396p(d)(4)(B), Iowa Code Chapter 633C, Iowa Code Chapter 633A (Iowa Trust Code), 441 IAC Chapter 75, and instructions issued by Iowa HHS.

ARTICLE III. TRUST CORPUS

3.1 Initial Funding

The Settlor hereby assigns, transfers, and directs to be deposited into a segregated, federally insured Iowa bank account titled in the name of the Trust (the "Trust Account") the following sources of the Settlor's monthly income:

☐ Social Security retirement, survivors, or disability insurance benefits
☐ Supplemental Security Income (only if specifically directed by Iowa HHS)
☐ Pension or retirement plan distributions from: [____________________________]
☐ Veterans Administration benefits (subject to exclusions under federal and Iowa Medicaid rules)
☐ Railroad Retirement benefits
☐ Annuity payments from: [____________________________]
☐ Other income: [____________________________]

3.2 Income-Only Restriction

Consistent with 42 U.S.C. § 1396p(d)(4)(B) and Iowa Code § 633C.3, the Trust shall be composed solely of the Settlor's pension, Social Security, and other income, plus accumulated income of the Trust. No assets, resources, gifts, or third-party contributions shall be deposited into the Trust. Any deposit of resources shall be void ab initio and shall be returned to the source.

3.3 Trust Account

The Trustee shall open and maintain a separate, interest-bearing checking or money market account at a federally insured depository institution doing business in Iowa. The account shall be titled substantially as follows:

"[Trustee Name], Trustee of the [Settlor Name] Medical Assistance Income Trust under Agreement dated [__/__/____]"

The Trust Account shall use the Trust's own federal Employer Identification Number (EIN) and shall not be commingled with any other funds.

ARTICLE IV. DISTRIBUTIONS

4.1 Permitted Distributions

The Trustee shall, in each calendar month, distribute the Trust Account balance in the following order of priority, consistent with 441 IAC 75.16 (post-eligibility treatment of income) and 441 IAC 75.24(3)(b):

1. Personal Needs Allowance (PNA) to the Settlor in the amount allowed by Iowa HHS for the Settlor's living arrangement.
2. Community Spouse Monthly Income Allowance (CSMIA) to the Settlor's spouse, if any, as calculated by Iowa HHS under the federal spousal impoverishment rules.
3. Family Maintenance Allowance for dependent family members, if any, as determined by Iowa HHS.
4. Health Insurance Premiums, including Medicare Part B, Part D, and Medicare Supplement / Advantage premiums.
5. Guardian / Conservator fees approved by Iowa HHS or an Iowa court of competent jurisdiction.
6. Trustee Fees in a reasonable amount, payable as permitted under Iowa Code § 633C.3 and Iowa HHS guidance.
7. Bank service charges for the Trust Account.
8. Patient Liability (Client Participation) — the remaining balance shall be paid to the long-term care facility, ICF/ID, or HCBS provider as required by Iowa HHS.

4.2 Prohibited Distributions

The Trustee shall make NO distribution for the benefit of any person other than the Settlor (or the Settlor's spouse / dependents as expressly permitted above) during the Settlor's lifetime. No distribution shall be made that would render the Settlor ineligible for Medicaid or that would constitute an uncompensated transfer subject to the asset transfer penalty under 441 IAC 75.23.

4.3 Disposition Cap (441 IAC 75.24(3)(b))

The Trustee acknowledges that, under 441 IAC 75.24(3)(b), the maximum statewide Medicaid rate published by Iowa HHS for the relevant facility type operates as a ceiling for trust disposition purposes. Income assigned to the Trust in excess of that rate may be deemed available for Medicaid eligibility purposes, and the Trustee shall manage funding accordingly in consultation with Iowa HHS.

4.4 No Accumulation

The Trust is designed to "zero out" monthly. The Trustee shall distribute the entire monthly balance, less reasonable reserves for bank fees and minor accumulated interest, before the close of each calendar month.

ARTICLE V. RESIDUAL BENEFICIARY AND ESTATE RECOVERY

5.1 Mandatory State Payback

Upon the death of the Settlor, the Trustee shall pay to the State of Iowa, Department of Health and Human Services, from any amounts remaining in the Trust, an amount equal to the total medical assistance paid on behalf of the Settlor under the Iowa Medicaid program, in accordance with 42 U.S.C. § 1396p(d)(4)(B)(iii), Iowa Code § 633C.3(2), and Iowa Code Chapter 249F (Iowa Medical Assistance Estate Recovery).

5.2 Notice of Death

Within thirty (30) days after the Settlor's death, the Trustee shall:

☐ Provide written notice to the Iowa HHS Estate Recovery Program (currently administered for Iowa HHS by its designated contractor) at its then-current address;
☐ Provide a certified copy of the death certificate;
☐ Provide a final accounting of the Trust Account.

5.3 Residual Distribution

After full satisfaction of the State's claim under Section 5.1, any remaining funds shall be distributed to:

☐ The Settlor's estate, to be administered under Iowa Code Chapter 633 (Iowa Probate Code).
☐ The following residual beneficiary(ies):

ARTICLE VI. TRUSTEE POWERS AND DUTIES

6.1 Powers

The Trustee shall have all powers granted by the Iowa Trust Code (Iowa Code Chapter 633A) and the Uniform Prudent Investor Act as adopted in Iowa, limited as necessary to comply with 42 U.S.C. § 1396p(d)(4)(B), Iowa Code Chapter 633C, and 441 IAC Chapter 75.

6.2 Duties

The Trustee shall:

• Administer the Trust in good faith and consistent with its terms and the interests of the Settlor and the State of Iowa as residual beneficiary;
• Maintain accurate records of all deposits, distributions, and balances;
• File any required federal and Iowa fiduciary income tax returns (IRS Form 1041 and Iowa Form IA 1041 if applicable);
• Furnish Iowa HHS with quarterly or annual statements upon request;
• Notify Iowa HHS within ten (10) business days of any material change in funding, trusteeship, or Settlor circumstances.

6.3 Bond

☐ The Trustee shall serve without bond.
☐ The Trustee shall post a bond in the amount of $[____________].

6.4 Compensation

The Trustee shall be entitled to reasonable compensation, payable from the Trust Account as a permitted distribution under Section 4.1(6), as authorized by Iowa Code § 633C.3 and Iowa HHS guidance.

ARTICLE VII. ADMINISTRATIVE PROVISIONS

7.1 Governing Law

This Trust shall be governed by, and construed in accordance with, the laws of the State of Iowa, including Iowa Code Chapter 633A (Iowa Trust Code) and Iowa Code Chapter 633C (Medical Assistance Trusts), and the applicable federal Medicaid statutes and regulations.

7.2 Severability

If any provision of this Trust is held invalid or unenforceable, the remaining provisions shall continue in full force and effect to the maximum extent permitted by law.

7.3 Conformity to Law

This Trust shall be construed and, if necessary, judicially reformed under Iowa Code § 633A.2203 (modification of irrevocable trust to achieve the Settlor's tax or eligibility objectives) so as to qualify at all times as a Qualified Income Trust under 42 U.S.C. § 1396p(d)(4)(B) and a Medical Assistance Income Trust under Iowa Code Chapter 633C and 441 IAC 75.24(3)(b).

7.4 Spendthrift

The interest of the Settlor in this Trust shall not be subject to voluntary or involuntary alienation, assignment, attachment, or anticipation by any creditor, except as required to satisfy the State's payback claim under Article V.

7.5 Notices

All notices to Iowa HHS shall be sent to:

Iowa Department of Health and Human Services
Estate Recovery Program (or its designated administrator)
[Current address as published by Iowa HHS]

ARTICLE VIII. EXECUTION

IN WITNESS WHEREOF, the Settlor and Trustee have executed this Medical Assistance Income Trust on the date first written above.

Settlor

Trustee

NOTARY ACKNOWLEDGMENT (IOWA)

STATE OF IOWA )
) ss.
COUNTY OF [____________])

This record was acknowledged before me on the [__] day of [__________], 20[__], by [____________________________] as Settlor, and by [____________________________] as Trustee.

SCHEDULE A — INITIAL FUNDING

SCHEDULE B — TRUSTEE INSTRUCTIONS CHECKLIST

☐ Obtain federal EIN for the Trust (IRS Form SS-4).
☐ Open dedicated Trust Account at federally insured Iowa depository institution.
☐ Provide Iowa HHS with copy of executed Trust and Schedule A within 10 days.
☐ Redirect income sources to Trust Account effective [__/__/____].
☐ Establish monthly distribution schedule per Article IV.
☐ Confirm current 441 IAC 75.24(3)(b) maximum statewide Medicaid rate for relevant facility type.
☐ Calendar annual fiduciary tax return filing (IRS Form 1041; Iowa Form IA 1041 if applicable).
☐ Provide Iowa HHS Estate Recovery notice within 30 days of Settlor's death.

SOURCES AND REFERENCES

• 42 U.S.C. § 1396p(d)(4)(B) — Qualified Income Trusts
• Iowa Code § 249A.4 — Medical Assistance; Powers and Duties of Director
• Iowa Code Chapter 633C (§§ 633C.1 – 633C.5) — Medical Assistance Special Needs and Income Trusts
• Iowa Code Chapter 249F — Medical Assistance Estate Recovery
• Iowa Code Chapter 633A — Iowa Trust Code
• Iowa Code Chapter 633 — Iowa Probate Code
• Iowa Administrative Code rule 441-75 — Medicaid Conditions of Eligibility
• Iowa Administrative Code rule 441-75.24(3)(b) — Medical Assistance Income Trust (MAIT)
• Iowa Department of Health and Human Services — Iowa Medicaid Program