Montgomery & Associates, Inc.

Finally . . .

     An Income-Only Trust is one of the three kinds of Special Treatment Trusts.  This kind of trust is sometimes known as a stream-of-income, income-cap, or Miller trust.  Special requirements are unique to this type of trust.

• The trust is created and funded to establish income eligibility for the Arizona Long Term Care System (ALTCS). 

• The trust is for the benefit of the person in need of long term care only.  It may not be used for the benefit of any other person or entity. 

• Disbursements from the trust can only be issued for the following items:  reasonable legal and professional expenses relating to the trust, Share of Cost, health insurance premiums, medically necessary medical expenses, Community Spouse Monthly Income Allowance (CSMIA), income taxes when an actual tax liability is established, purchase of an irrevocable burial plan or designating a maximum of $1500.00 in a separate account as a burial fund, and living expenses for food, clothing, or shelter.  The total disbursements from the trust for food, clothing, shelter, and personal needs, when added together with the income outside the trust, must never exceed the current income guidelines for ALTCS (2008 = $1911 per month / 2009 = $2022).

• Arizona Health Care Cost Containment System (AHCCCS) is the primary beneficiary of the trust.  Upon the applicant’s death, the remaining balance (or an amount equal to the total medical expenses AHCCCS paid on the applicant’s behalf) will be due to AHCCCS.

• If a Share of Cost (SOC) is assessed, you are required to pay the Share of Cost each month.

• If legally permissible, the income assigned to the trust must be directly deposited into the income-only trust checking account.

• No other deposits may be made to the trust, except of the income assigned to the trust.  In addition, NO RESOURCES OR ASSETS CAN EVER BE ADDED TO THE TRUST.  Failure to follow this rule can cause ineligibility for ALTCS.