2006 Code of Virginia § 55-19.5 - Provision in certain trust void

55-19.5. Provision in certain trust void.

A. Except as provided in subsection B, a provision in any inter vivos trustcreated for the benefit of the grantor which provides directly or indirectlyfor the suspension, termination or diversion of the principal, income orother beneficial interest of the grantor in the event that he should applyfor medical assistance or require medical, hospital, or nursing care orlong-term custodial, nursing or medical care shall be against public policyand ineffective as against the Commonwealth. The assets of the trust, bothprincipal and interest, shall be distributed as though no such applicationhad been made. The provisions of this subsection shall apply without regardto the irrevocability of the trust or the purpose for which the trust wascreated.

B. Subsection A shall not apply to any trust with a corpus of $25,000 orless. If the corpus of any such trust exceeds $25,000, $25,000 of the trustshall be exempt from the provisions of subsection A. However, if the grantorhas created more than one trust as described in subsection A, the $25,000exemption shall be prorated among the trusts. Further, if the grantor madeuncompensated transfers, as defined in 20-88.02, within thirty months ofapplying for Medicaid benefits and no payments were ordered pursuant tosubsection D of 20-88.02, the $25,000 exemption under this subsection shallnot apply.

C. The exemption provided by subsection B shall not apply to any trustcreated on or after August 11, 1993.

D. To the extent any trust created between August 11, 1993, and July 1, 1994would but for subsection C be entitled to the exemption provided bysubsection B, the grantor may revoke such trust notwithstanding anyirrevocability in the terms of such trust. Nothing contained in thissubsection shall be construed to authorize the grantor to effect the vestedrights of any beneficiary of such trust without the express written consentof such beneficiary.

E. The provisions of subsection A shall not apply to an irrevocable intervivos trust to the extent it is created for the purpose of paying thegrantor's funeral and burial expenses and is funded in an amount and mannerallowable as a resource in determining eligibility for medical assistancebenefits. In the event any amount remains in the trust upon payment of thefuneral or burial arrangements provided to or on behalf of such individual,the Commonwealth shall receive all amounts remaining in such trust up to anamount equal to the total medical assistance paid on behalf of the individual.

F. For purposes of this section, medical assistance and medical assistancebenefits shall mean benefits payable under the State Plan for MedicalAssistance.

(1993, c. 701; 1994, c. 692; 1998, c. 735.)