317: 35-41.6(6)(A)

Special Needs & Pooled Trust Comparison Chart

A Special Needs Trust (SNT) allows a person with a disability to have money set aside for their quality of life without those assets counting against their eligibility for ABD medical benefits. Here is how to distinguish between the two types of trusts and your responsibilities as a worker.

First-Party SNT (The Client’s Own Money)

This trust is funded with money that already belonged to the client (e.g., a personal injury settlement or an inheritance).

Key Criteria:

• Age Limit: The client must be under age 65 when the trust is funded.
• Established by: The client, a parent, grandparent, legal guardian, or the court.
• Payback Clause: When the client dies, the state must be paid back from the remaining funds for Medicaid expenses.
• Irrevocable: It cannot be changed or ended without DHS or OHCA permission.

The “Income” Traps (What counts as income):

• Any money paid directly to the client from the trust.
• Any money the trust spends on Food or Shelter (rent, mortgage, utilities).
• Any new income the client receives before it is deposited into the trust is countable income for the month received.

Third-Party SNT (Someone Else’s Money)

This trust is funded with money belonging to someone else (e.g., a parent leaving an inheritance in their will).

Key Criteria:

• Payback Clause: Not required. The state does not have to be paid back when the client dies.
• Look-back Period: Putting money into this trust is subject to the 60-month look-back rule (transfer of assets) unless it is for the “sole benefit” of the applicant’s disabled child.
• Discretionary: A trustee decides when and how to spend the money.

Worker Responsibilities

Step 1: Get the Document

You are not expected to determine if a trust is “legal.” You must get a complete copy of the trust document and email it to Legal Services (see the email list in the original article). If a copy of the trust is not received, you will deny the application for failure to provide reason code 45.

• For First-Party Trusts: You must ensure a copy of the SNT is sent to OKDHS Legal team for review: Susan.Eads@okdhs.org, Anne.Lawrence@okdhs.org, Susan.Hohmann@okdhs.org, and OHCA’s Karyl.Hightower@okhca.org. You will not certify until the team has advised if the trust is countable or not.
• For Third-Party Trusts: You only need to send the SNT to OKDHS Legal team – Susan.Eads@okdhs.org, Anne.Lawrence@okdhs.org & Susan.Hohmann@okdhs.org. You will not certify until the team has advised if the trust is countable or not.

Step 2: Monitor for “Countable Income”

While reviewing the case, look at the client’s bank statements or housing costs.

• Red Flag: If the trust is paying the client’s rent or giving them a monthly “allowance” check, that is countable income.
• Green Light: If the trust buys the client a TV, a cell phone, or a vacation, those are exempt and do not count as income.

Step 3: Dissolving a Trust

If a trust is being closed, you must notify Health Related and Medical Services (HR&MS) at AFS.HRMS@OKDHS.org. You will need to provide:

• Form 08MA018E Supplemental Needs Trust, or copy of the trust instrument

• A memorandum explaining the reason for the requested termination of the Supplemental Needs Trust, and giving:
  • The name and address of the trustee
  • The name and address of the financial institution, and
  • Current balance of trust.

Health Related and Medical Services notifies OHCA/TPL to initiate recovery process.

Quick Comparison Table