Massive Changes to Medicaid Planning in Michigan For Married Couples using Sole Benefit Trusts

Today, the Department of Human Services made huge sweeping, unforeseen changes to Medicaid planning for Michigan married couples with their change in analysis of the Sole Benefit Trust and how it fits into the asset calculation.

According to a communication from Terrence M. Beurer, Director, Field Operations Administration, all SBO Trust assets are deemed countable pursuant to BEM 401, page 11 regarding Medicaid irrevocable trusts, which states:

Count as the person’s countable asset the value of the countable assets in the trust principal if there is any condition under which the principal could be paid to or on behalf of the person from an irrevocable trust.

This is a huge and disturbing change of policy with zero warning.

This effects married couples where one spouse is health and one spouse is in a nursing home.  As a Certified Elder Law Attorney, we have other planning strategies that are available to protect the assets, however, for Michigan married couples who have SBO Trust currently in process with DHS looking to protect their assets from nursing home spend down, this will be a huge problem and will most likely result in a bunch of denials.


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