Oregon Miller Trust / Qualified Income Trust (Income Cap Trust)

OREGON INCOME CAP TRUST

(Miller Trust / Qualified Income Trust under 42 U.S.C. § 1396p(d)(4)(B))

TRUST INSTRUMENT CAPTION

ARTICLE I. ESTABLISHMENT AND PURPOSE OF TRUST

1.1 Establishment. I, [GRANTOR FULL LEGAL NAME] ("Grantor," "Settlor," or "Beneficiary"), residing at [_______________________________________________], Oregon, hereby establish this irrevocable trust this [____] day of [_______________], 20[____], for the sole purpose of qualifying for medical assistance benefits administered by the Oregon Department of Human Services, Aging and People with Disabilities Division (hereinafter "DHS/APD"), under Title XIX of the Social Security Act and the Oregon Supplemental Income Program Medical (OSIPM).

1.2 Statutory Basis. This Trust is intended to qualify as an "income trust" within the meaning of:

• ☐ 42 U.S.C. § 1396p(d)(4)(B);
• ☐ OAR 461-145-0540 (Oregon Administrative Rules governing trusts in OSIP/OSIPM);
• ☐ ORS § 411.439 and related provisions governing Oregon Medicaid long-term care eligibility.

1.3 Purpose. The exclusive purposes of this Trust are:

• ☐ To enable the Grantor, who has gross monthly income exceeding 300% of the SSI Federal Benefit Rate, to satisfy the income-cap requirement for OSIPM long-term care benefits;
• ☐ To hold income of the Grantor in a manner that renders such income non-countable for OSIPM eligibility under OAR 461-145-0540;
• ☐ To pay, in the order required by Oregon law, the Grantor's personal needs allowance, any community-spouse monthly income allowance, dependent allowances, post-eligibility medical expenses, and the Grantor's patient-pay liability to the long-term care provider.

1.4 Irrevocability. This Trust is IRREVOCABLE. Grantor expressly waives any power to revoke, amend, alter, or terminate this Trust except as required to maintain compliance with 42 U.S.C. § 1396p(d)(4)(B) and OAR 461-145-0540.

ARTICLE II. FUNDING OF TRUST

2.1 Permissible Trust Corpus. The corpus of this Trust shall consist EXCLUSIVELY of the Grantor's income, including but not limited to:

• ☐ Social Security retirement, disability, or survivor benefits;
• ☐ Supplemental Security Income (SSI) — if applicable;
• ☐ Veterans Administration benefits;
• ☐ Public Employees Retirement System (PERS) or other pension/retirement annuity payments;
• ☐ Private pension or annuity payments;
• ☐ Railroad Retirement benefits;
• ☐ Interest, dividends, or other unearned income of the Grantor;
• ☐ Wages or earned income of the Grantor (if any).

2.2 Prohibition on Funding with Resources. No resource, asset, or property of the Grantor (other than income as defined under SSI methodology and OAR 461-140-0040) shall be placed into this Trust. Deposits of resources may disqualify this Trust under OAR 461-145-0540.

2.3 Method of Funding. The Trustee shall open and maintain a separate trust bank account titled:

"[TRUSTEE NAME], Trustee of the [GRANTOR NAME] Income Cap Trust, EIN: [__-_______]"

Income shall be deposited into this account on a monthly basis, sufficient to bring the Grantor's countable income below the OSIPM income cap.

ARTICLE III. TRUSTEE POWERS AND DUTIES

3.1 Appointment of Trustee. The Grantor appoints [TRUSTEE FULL LEGAL NAME], of [TRUSTEE ADDRESS], as initial Trustee. The Grantor MAY NOT serve as Trustee of this Trust.

3.2 Successor Trustee. Upon the death, resignation, incapacity, or removal of the initial Trustee, [SUCCESSOR TRUSTEE FULL LEGAL NAME] shall serve as Successor Trustee.

3.3 Mandatory Monthly Disbursements. The Trustee shall, on a monthly basis and in the following order of priority, disburse all funds deposited into the Trust during the prior month:

• ☐ First: Personal Needs Allowance to the Grantor in the amount permitted by OAR 461-160-0620 (currently set by DHS/APD);
• ☐ Second: Community Spouse Monthly Income Allowance (if applicable) pursuant to 42 U.S.C. § 1396r-5 and OAR 461-160-0620;
• ☐ Third: Family/dependent allowance (if applicable);
• ☐ Fourth: Health insurance premiums (Medicare Parts B and D, Medigap, long-term care insurance);
• ☐ Fifth: Incurred medical expenses not subject to payment by a third party;
• ☐ Sixth: Patient liability ("patient pay") to the long-term care facility or HCBS provider;
• ☐ Seventh: Reasonable trustee fees and bank fees (subject to DHS/APD review).

3.4 No Discretionary Distributions. The Trustee shall have NO DISCRETION to accumulate funds in the Trust, to make distributions inconsistent with Section 3.3, or to apply funds for the benefit of any person other than the Grantor during the Grantor's lifetime (except as expressly authorized by OAR 461-145-0540 and OAR 461-160-0620).

3.5 Accounting and Reporting. The Trustee shall:

• ☐ Maintain complete records of all deposits and disbursements;
• ☐ Provide DHS/APD with copies of bank statements upon request;
• ☐ File any required tax returns under EIN obtained for the Trust;
• ☐ Notify DHS/APD within ten (10) days of any change in trustee or Grantor's circumstances.

ARTICLE IV. STATE REIMBURSEMENT — RESIDUAL BENEFICIARY

4.1 State of Oregon as Residual Beneficiary. As required by 42 U.S.C. § 1396p(d)(4)(B)(ii) and OAR 461-145-0540, upon the death of the Grantor, the State of Oregon shall receive all amounts remaining in the Trust up to an amount equal to the total medical assistance paid on behalf of the Grantor under the State Medicaid Plan.

4.2 Notification of Death. Within thirty (30) days of the Grantor's death, the Trustee shall notify, in writing:

• ☐ Oregon Department of Human Services, Estate Administration Unit, P.O. Box 14021, Salem, OR 97309-5024;
• ☐ Oregon Health Authority, as applicable.

4.3 Estate Recovery. Pursuant to ORS § 411.620 et seq. and OAR 461-135-0832, the State of Oregon shall be reimbursed from the Trust corpus and any other recoverable estate of the Grantor for all Medicaid services rendered.

4.4 No Distribution Prior to State Reimbursement. No distribution to any other person or entity shall be made before the State of Oregon's reimbursement claim is satisfied in full.

4.5 Remainder Beneficiaries (Contingent). Only after the State of Oregon's claim has been satisfied in full, any remaining trust corpus shall be distributed to:

ARTICLE V. GENERAL PROVISIONS

5.1 Governing Law. This Trust shall be construed under the laws of the State of Oregon, including ORS Chapter 130 (Oregon Uniform Trust Code), 42 U.S.C. § 1396p, OAR Chapter 461, and applicable federal Medicaid regulations.

5.2 Severability. If any provision of this Trust is held invalid or inconsistent with 42 U.S.C. § 1396p(d)(4)(B) or OAR 461-145-0540, that provision shall be reformed to comply, and the remaining provisions shall continue in full force.

5.3 No Spendthrift Provision Limiting State. Notwithstanding any other provision of this Trust, no spendthrift, anti-alienation, or similar restriction shall apply against the State of Oregon's right of recovery.

5.4 DHS/APD Review. The Grantor and Trustee acknowledge that this Trust must be submitted to DHS/APD for review and approval prior to OSIPM eligibility determination.

ARTICLE VI. EXECUTION

IN WITNESS WHEREOF, the Grantor and Trustee have executed this Income Cap Trust on the date first above written.

GRANTOR / SETTLOR

[________________________________________]
[GRANTOR FULL LEGAL NAME], Grantor

Date: [__/__/____]

TRUSTEE — ACCEPTANCE

I, the undersigned, accept the appointment as Trustee and agree to administer this Trust in accordance with its terms and applicable federal and Oregon law.

[________________________________________]
[TRUSTEE FULL LEGAL NAME], Trustee

Date: [__/__/____]

NOTARY ACKNOWLEDGMENT (Oregon)

STATE OF OREGON
COUNTY OF [_______________]

On this [____] day of [_______________], 20[____], before me, the undersigned notary public, personally appeared [GRANTOR FULL LEGAL NAME] and [TRUSTEE FULL LEGAL NAME], who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument, and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of Oregon that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

[________________________________________]
Notary Public — State of Oregon

My commission expires: [__/__/____]

[NOTARY SEAL]

ATTACHMENTS / EXHIBITS

• ☐ Exhibit A: Schedule of Grantor's Monthly Income Sources
• ☐ Exhibit B: Trust Bank Account Information (institution, account number, EIN)
• ☐ Exhibit C: Copy of DHS/APD Notice of Income-Cap Determination
• ☐ Exhibit D: Personal Needs Allowance and Patient-Pay Calculation Worksheet

SOURCES AND REFERENCES

• 42 U.S.C. § 1396p(d)(4)(B) — Federal Qualified Income Trust statute
• OAR 461-145-0540 — Oregon Administrative Rule governing trust treatment in OSIP/OSIPM
• OAR 461-140-0210 — Asset Transfer rules
• OAR 461-160-0620 — Patient Liability; Personal Needs Allowance
• OAR 461-135-0832 — Estate Recovery rules
• ORS § 411.439 — Oregon Medicaid long-term care services
• ORS § 411.620 et seq. — Oregon Medicaid Estate Recovery
• ORS Chapter 130 — Oregon Uniform Trust Code
• Oregon DHS, Aging and People with Disabilities (APD): https://www.oregon.gov/dhs/seniors-disabilities
• Oregon State Bar Elder Law Section, "Understanding Trusts" Staff Tool