The entire corpus of a trust with five beneficiaries is deemed to be available to a Medicaid applicant, and the trust is held to be a Medicaid Qualifying Trust.
Kathleen Bisceglia entered a nursing home in 1987. In January 1991, her husband, Joseph Bisceglia, Sr., established a trust funded by the couple''s home, which he owned. Mrs. Bisceglia was among the trust''s five beneficiaries. The trust was created to shield the property from being affected by a son''s divorce proceedings. When Mr. Bisceglia died in 1992, his half-interest in another piece of property was transferred to the trust, and one month later Mrs. Bisceglia deeded her half-interest in the same property to the trust.
Mrs. Bisceglia was a Medicaid recipient until September 1993, when life insurance proceedings resulting from her husband''s death rendered her temporarily ineligible. When she reapplied, the Massachusetts Division of Medical Assistance denied her application on the ground that she was the beneficiary of a Medicaid Qualifying Trust. Mrs. Bisceglia sought judicial review, arguing that: the Division failed to notify her of its reasons for its denial; inadequately explained her right to cure her ineligibility; erred by assigning full value of the trust assets to her; and should have granted her an exemption for her principal place of residence.
The court rejects these arguments and rules that the trust is a Medicaid Qualifying Trust. After finding that the Division gave Mrs. Bisceglia adequate notice and explanation, the court moves to the central question of the distribution of trust assets. Citing Cohen v. Commissioner (Mass., 423 Mass. 399, August 2, 1996), the court holds that because the trust''s terms permit the trustees to distribute all the trust corpus to Mrs. Bisceglia, the entire trust corpus is to be deemed available to her. Lastly, the court finds the Division acted correctly in not exempting her home because her current interest in the property is that of a beneficiary, not an owner.
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