Social services – MassHealth – Assets – Trust

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Where the Office of Medicaid denied an application for long-term benefits, that decision must be upheld based on the assets in a family trust.

“… Thomas and Christina M. Robertson were the grantors and beneficiaries of the Robertson Family Trust, an irrevocable trust in which they were entitled to income-only distributions. …

“MassHealth provides nursing home benefits in the form of long-term care coverage for individuals who have $2,000 or less in ‘countable assets.’ 130 Code Mass. Regs. section519.006(A)(2); 130 Code Mass. Regs. section520.003(A)(1).[3] ‘Countable assets are all assets that must be included in a determination of [Medicaid] eligibility.’ 130 Code Mass. Regs. section520.007.

“Here, if the trust is considered a countable asset, then Ms. Robertson would be financially ineligible for MassHealth benefits because the assessed value of her trust properties exceeds $2,000. This Court concludes that the Office of Medicaid Board of Hearings correctly determined that Ms. Robertson’s trust was a countable asset because the trustees had discretion to make distributions to Ms. Robertson from the trust principal. …

“MassHealth provides the most logical analysis of Lebow [v. Commissioner of the Div. of Med. Assistance, 433 Mass. 171 (2001)] as it relates to the case at bar. … [U]nder the Robertson Family Trust here, there was a course of action — Ms. Robertson’s addition of property to the trust — that would restore the trustee’s discretion to make distributions of principal to her, even if that circumstance never in fact occurred. For this reason, the trustees were also never permanently divested of discretion, making the entire principal of the trust countable. The Court does not base its decision about MassHealth’s interpretation on whether the trustees had discretion to pay the plaintiff from the principal at a particular moment in time, but rather if there is any state of affairs, at any time during the operation of the trust, that would permit the trustee to distribute trust assets to the grantor. If so, those assets are countable in calculating the grantor’s Medicaid eligibility.”

Estate of Robertson v. Tsai (Lawyers Weekly No. 12-157-15) (9 pages) (Frison, J.) (Worcester Superior Court) (Docket No. 13-01390-C) (Dec. 30, 2015).

Click here for the full-text opinion.