South Dakota Miller Trust / Qualified Income Trust (QIT)

SOUTH DAKOTA MILLER TRUST / QUALIFIED INCOME TRUST AGREEMENT

TRUST CAPTION

ARTICLE I — DECLARATION AND PURPOSE

1.1 Declaration of Trust. [_______________________________] ("Settlor"), a resident of [____________________] County, South Dakota, hereby establishes this irrevocable trust (the "Trust") to be known as THE [____________________________] QUALIFIED INCOME TRUST, dated [__/__/____].

1.2 Statutory Authority. This Trust is created and shall be administered as a "qualified income trust" within the meaning of 42 U.S.C. § 1396p(d)(4)(B), and as a "Medicaid income trust" within the meaning of ARSD 67:46:05:33.01. It is the express intent of the Settlor that this Trust qualify under federal Medicaid law and under the rules of the South Dakota Department of Social Services ("DSS") so that income deposited into this Trust shall not be counted against the income limits set forth in ARSD 67:46:04:14 (300% of the maximum SSI standard benefit amount).

1.3 Purpose. The sole purpose of this Trust is to enable the Settlor, who is or who anticipates becoming a recipient of South Dakota Medicaid long-term care benefits, nursing-facility benefits, or Home- and Community-Based Services (HCBS) waiver benefits, to satisfy the income-eligibility requirements of the South Dakota Medicaid program by directing the Settlor's gross monthly income into this Trust.

1.4 Irrevocability. This Trust is IRREVOCABLE. The Settlor shall have no power to revoke, amend, modify, or terminate this Trust, nor any power to alter the beneficial interests created hereunder, except as required by federal or South Dakota law or as ordered by a court of competent jurisdiction.

Checklist of Qualifying Requirements (ARSD 67:46:05:33.01)

☐ The Trust is composed only of the beneficiary's own pension, Social Security, or other income
☐ The Trust is irrevocable
☐ The Trust provides that DSS receives all amounts remaining in the Trust upon the death of the beneficiary, up to the total Medicaid paid
☐ Income is direct-deposited or transferred into the Trust each month
☐ Trustee disbursements comply with the priority of payments below

ARTICLE II — FUNDING / TRUST CORPUS

2.1 Permitted Contributions. The corpus of this Trust shall consist only of the following income of the Settlor:

☐ Social Security retirement, survivor, or disability income
☐ Railroad Retirement benefits
☐ Veterans Administration benefits (other than Aid & Attendance / Housebound, which are excluded)
☐ Public or private pension payments
☐ Annuity payments payable to the Settlor
☐ Other monthly income of the Settlor: [____________________________________]

2.2 Prohibited Contributions. No assets, resources, or income belonging to any person other than the Settlor shall be deposited into this Trust. The following shall not be contributed: spousal income, lump-sum inheritances, gifts from third parties, proceeds from the sale of resources, tax refunds, VA Aid & Attendance or Housebound benefits, or any income belonging to the Settlor's spouse.

2.3 All-or-Nothing Rule. With respect to any single income source designated for deposit into the Trust, the entire monthly payment must be deposited; partial deposits are prohibited.

2.4 Designation of Income Sources. The Settlor designates the following income source(s) for monthly deposit into this Trust:

ARTICLE III — TRUSTEE

3.1 Initial Trustee. The initial Trustee of this Trust shall be [_______________________________________________], of [_______________________________], [_____], South Dakota.

3.2 Successor Trustee. If the initial Trustee dies, resigns, becomes incapacitated, or otherwise ceases to serve, the successor Trustee shall be [_______________________________________________].

3.3 Trustee Disqualification. The Settlor shall not serve as Trustee. The Trustee should not be a person whose income or resources are otherwise required to be combined with the Settlor's for Medicaid eligibility purposes.

3.4 Trustee Bond. ☐ No bond required ☐ Bond required in the amount of $[____________]

3.5 Trustee Powers. The Trustee shall have all powers granted under SDCL Title 55 (South Dakota Trust Code), subject to the express limitations of this Trust instrument, including the power to open and maintain a dedicated trust bank account at a federally insured South Dakota financial institution titled in substantially the following form: "[Trustee Name], Trustee of The [Settlor Name] Qualified Income Trust dated [Date]".

3.6 Trustee Compensation. ☐ Trustee shall serve without compensation ☐ Trustee shall receive reasonable compensation as permitted under SDCL § 55-3-1 and consistent with ARSD limitations

ARTICLE IV — DISTRIBUTIONS

4.1 Mandatory Monthly Distributions in Order of Priority. The Trustee shall, in each calendar month, distribute the Trust corpus in the following order:

(a) Personal Needs Allowance. First, to the Settlor, the South Dakota Medicaid Personal Needs Allowance (currently set by DSS under ARSD 67:46:04 and the State Plan).

(b) Community Spouse Monthly Maintenance Needs Allowance (MMMNA). Second, if applicable, to the Settlor's community spouse, the Monthly Maintenance Needs Allowance permitted under 42 U.S.C. § 1396r-5 and ARSD.

(c) Family Maintenance Allowance. Third, any family-member maintenance allowance allowed by DSS.

(d) Health Insurance Premiums and Uncovered Medical Costs. Fourth, Medicare Part B and Part D premiums, supplemental health-insurance premiums, and medically necessary expenses not paid by Medicaid or Medicare.

(e) Patient Liability / Cost of Care. Fifth, the Settlor's monthly patient liability (share of cost) to the nursing facility or HCBS provider as determined by DSS.

(f) Trustee Fees and Bank Fees. Sixth, reasonable fees and administrative expenses of the Trust.

4.2 No Accumulation. It is the intent of the Settlor that, to the maximum extent practicable, all income deposited into the Trust in any given month be fully distributed in that month. The Trustee shall not accumulate income in the Trust except in nominal amounts necessary to maintain the trust account.

4.3 No Discretionary Distributions to Third Parties. Except as expressly permitted by Section 4.1, the Trustee shall make no distribution to any person other than the Settlor or for the Settlor's direct benefit.

ARTICLE V — DSS AS RESIDUAL REMAINDER BENEFICIARY

5.1 State Payback Provision. Upon the death of the Settlor, the Trustee shall, before any other distribution, pay to the State of South Dakota, Department of Social Services from any amounts remaining in this Trust an amount equal to the total medical assistance paid on behalf of the Settlor under the South Dakota Medicaid State Plan, as required by 42 U.S.C. § 1396p(d)(4)(B) and ARSD 67:46:05:33.01.

5.2 Notice of Death. The Trustee shall notify the South Dakota DSS, Division of Economic Assistance, in writing within thirty (30) days of the Settlor's death and shall request a final accounting of medical assistance paid.

5.3 Estate Recovery. Nothing in this Trust shall limit the rights of South Dakota DSS under its estate recovery program (SDCL § 28-6-23 et seq.) to recover the cost of medical assistance from the Settlor's estate or this Trust.

5.4 Contingent Remainder. Any amount remaining in the Trust after full satisfaction of the DSS claim under Section 5.1 shall be distributed to: [_______________________________________________] (contingent residual beneficiary).

ARTICLE VI — ADMINISTRATIVE PROVISIONS

6.1 Governing Law. This Trust shall be governed by, construed under, and administered in accordance with the laws of the State of South Dakota, including the South Dakota Trust Code (SDCL Title 55) and applicable Medicaid law and rules (SDCL Chapter 28-6; ARSD Article 67:46).

6.2 Severability. If any provision of this Trust is determined by a court of competent jurisdiction or by South Dakota DSS to disqualify the Trust under 42 U.S.C. § 1396p(d)(4)(B) or ARSD 67:46:05:33.01, that provision shall be deemed reformed or severed to the minimum extent necessary to preserve the Trust's qualification.

6.3 Reformation for Medicaid Qualification. The Trustee is authorized to petition a South Dakota court of competent jurisdiction to reform this Trust as necessary to maintain its qualification as a Miller Trust / QIT.

6.4 Spendthrift Provision. No interest of the Settlor or any beneficiary in the income or principal of this Trust shall be subject to assignment, anticipation, alienation, attachment, garnishment, or claims of creditors, except as required by federal or South Dakota Medicaid law and by Article V of this Trust.

6.5 Records and Accounting. The Trustee shall maintain complete records of all deposits to and disbursements from the Trust and shall furnish such records to DSS upon request and to the Settlor (or the Settlor's authorized representative) at least annually.

6.6 Tax Identification. ☐ The Trust shall use the Settlor's Social Security Number as a grantor trust under IRC § 671 ☐ The Trust shall obtain a separate Employer Identification Number

ARTICLE VII — EXECUTION

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

Settlor

Signature: [______________________________________________]

Printed Name: [__________________________________________]

Date: [__/__/____]

Trustee (Acceptance of Trust)

I accept appointment as Trustee and agree to administer this Trust in accordance with its terms, 42 U.S.C. § 1396p(d)(4)(B), and applicable South Dakota law and rules.

Signature: [______________________________________________]

Printed Name: [__________________________________________]

Date: [__/__/____]

NOTARIAL ACKNOWLEDGMENT (Settlor)

STATE OF SOUTH DAKOTA )
) ss.
COUNTY OF [__________] )

On this [____] day of [______________], 20[____], before me, the undersigned notary public, personally appeared [_______________________________], known to me (or satisfactorily proved) to be the person whose name is subscribed to the foregoing instrument as Settlor, and acknowledged that he/she executed the same as his/her free act and deed for the purposes set forth therein.

Notary Public Signature: [______________________________________]

Printed Name: [__________________________________________]

My commission expires: [__/__/____]

(SEAL)

NOTARIAL ACKNOWLEDGMENT (Trustee)

STATE OF SOUTH DAKOTA )
) ss.
COUNTY OF [__________] )

On this [____] day of [______________], 20[____], before me, the undersigned notary public, personally appeared [_______________________________], known to me (or satisfactorily proved) to be the person whose name is subscribed to the foregoing instrument as Trustee, and acknowledged execution thereof.

Notary Public Signature: [______________________________________]

Printed Name: [__________________________________________]

My commission expires: [__/__/____]

(SEAL)

SCHEDULE A — INITIAL FUNDING

Trust Bank Account:

• Institution: [_______________________________________________]
• Account Title: [Trustee Name], Trustee of The [Settlor Name] Qualified Income Trust dated [__/__/____]
• Account Number (last 4): [__________]
• Date Opened: [__/__/____]

SOURCES AND REFERENCES

• 42 U.S.C. § 1396p(d)(4)(B) — Qualified Income Trust authority
• ARSD 67:46:05:33.01 — Medicaid income trust requirements (South Dakota)
• ARSD 67:46:04:14 — 300% SSI income-cap rule
• ARSD 67:46:01:02 — Medicaid eligibility requirements
• SDCL § 28-6-1 et seq. — South Dakota Medical Assistance
• SDCL Title 55 — South Dakota Trust Code
• SDCL § 28-6-23 et seq. — Estate Recovery
• South Dakota DSS, Division of Economic Assistance — Long-Term Care Medicaid: https://dss.sd.gov/economicassistance/medical_programs.aspx