UNDER 65 TRUST
Back to GlossaryDefinition
A “safe harbor” trust under the Medicaid laws, allowing a discretionary trust to be established for a person who is under the age of sixty-five and allowing the assets in such a trust to be ignored for Medicaid eligibility purposes, if the trust provides for reimbursement to the state on the death of the beneficiary
Summary
An Under 65 Trust is a special legal arrangement that helps protect assets for disabled individuals under 65 while maintaining their eligibility for Medicaid benefits. Think of it as a 'safe harbor' - it creates a protected space where assets can be held for the beneficiary's benefit without disqualifying them from essential government assistance. The key trade-off is that when the beneficiary dies, any remaining funds must be used to reimburse the state for Medicaid benefits provided during their lifetime.
Usage Context
Essential when studying Medicaid planning strategies, disability law, estate planning for special needs individuals, and understanding how government benefits interact with private assets. Particularly important when analyzing case studies involving disabled beneficiaries and asset protection strategies.
Common Confusions
- Thinking the trust assets belong to the beneficiary outright when they're actually held discretionarily
- Assuming the trust can pay for basic needs covered by Medicaid without affecting eligibility
- Confusing this with other special needs trusts that don't require payback provisions
- Believing the age restriction applies to when the trust is created rather than the beneficiary's current age
- Misunderstanding that the state reimbursement only applies to remaining assets at death, not all assets ever held in trust
