I get a lot of calls from folks who are under the impression that it is okay to hide information from government agencies. The most common one is when someone is the beneficiary of a trust. Under most government programs you MUST report when you are the trustor, trustee, or beneficiary of a trust. Even if you didn’t create the trust you must report it. That is because the agency must determine if the trust should be a countable asset or if any of the income from the trust should be counted in the eligibility determination. The agency will need to review the trust, its assets, and its income to determine if all, some, or none of the assets/income should count in the eligibility determination.
Some general rules of thumb are these …
1. If you are the trustee, trustee, and beneficiary of a trust you typically have powers to distribute principal and/or income from the trust. Typically ALTCS will count the whole trust corpus as an available asset. If the trust was created after August 11, 1993, the disbursements count as income in the month disbursed. This can have an impact on ALTCS eligibility especially while you are in spend down mode.
2. If you are just a beneficiary of the trust, how ALTCS counts it will determine on whether or not you have the ability as beneficiary to mandate disbursements be made. If you do not have that power or if that power rests solely with the trustee, ALTCS will typically exclude the trust corpus from the resource limit; however, if disbursements are made directly to the beneficiary, those will count toward the income limit.
3. If you are the trustee of a trust created by someone else and the trust is for the benefit of someone other than you or your spouse, then this trust typically does not count as a resource and the disbursements are not counted as income.
If you aren’t sure how your trust will be looked at it can be a good idea to seek legal counsel or ALTCS consulting to determine if any issues exist. If they do then you can take the time to adjust, modify, fix those issues.
Remember, hiding information from government agencies can be considered fraud and misrepresentation. The penalty warning on the ALTCS application states:
I understand that Federal, State, and local officials will verify the information I provided on
this form. If anything is inaccurate, I may be denied AHCCCS Medical Benefits. If I or my
representative have knowingly provided false information, we will be subject to criminal
prosecution.
I also understand that:
1. I must not knowingly withhold, or give false information, with the intent to receive AHCCCS
Medical Benefits, to which I am not entitled.
2. I will be required to pay back AHCCCS any benefits I receive as a result of withholding or
giving false information, and I will be subject to criminal prosecution.
3. It is fraud for me or my representative to knowingly withhold information with the intent
to receive medical benefits to which I am not eligible. If found guilty of fraud, I may be
subject to fines, imprisonment, or other penalties as provided for by applicable State and
federal laws.
Disclaimer: Our CLDP, Carol Aragon-Montgomery, prepares legal documents. OUR CLDP IS NOT AN ATTORNEY AT LAW AND IS NOT EMPLOYED BY ATTORNEYS AT LAW AND CANNOT GIVE LEGAL ADVICE. Your communications with our CLDP are kept CONFIDENTIAL by our CLDP, but since our CLDP is not an attorney at law, such communications are NOT PRIVILEGED (i.e., immune from Subpoena). Our CLDP can give you general factual information pertaining to legal rights, procedures, or options available to you in a legal matter when you are not represented by an attorney. Our CLDP cannot give you specific legal advice, opinions, or recommendations about your legal rights, remedies, defenses, options, or strategies.
