An Ohio appeals court affirms the state's denial of Medicaid benefits to a deceased nursing home resident's estate, concluding that the resident's irrevocable discretionary trust was an available asset for purposes of Medicaid eligibility. Gsellman v. Ohio Dept. of Job and Family Services (Ohio App., 9th Dist., No. 25954, April 11, 2012).
In 1999, Elma Gsellman created a trust into which she transferred all of her tangible personal property, including all property she acquired thereafter. In 2007, she moved to a nursing home and later applied to the Ohio Department of Job and Family Services, the state's Medicaid agency, for nursing home benefits. The agency denied the application, concluding that Ms. Gsellman's assets -- the trust and a bank account containing $4,000 -- were available resources that placed Ms. Gsellman above the $1,500 resource limit.
Ms. Gsellman appealed the denial to the agency, arguing that she should be allowed to spend down the bank account and that the trust was not an available resource because it was established more than five years before she applied for nursing home benefits and was a discretionary trust. Ultimately, Ms. Gsellman's administrative appeals were unsuccessful and she appealed to a trial court, which affirmed the agency's denial, concluding that because the trust allowed the trustee to spend the trust's income and principal to provide for Ms. Gsellman's care and maintenance should she become disabled (as she did), the entire trust was an available resource. Ms. Gsellman died while the trial court action was pending, and her estate appealed.
The Court of Appeals of Ohio, Ninth District, affirms the agency's denial of Medicaid benefits to Ms. Gsellman's estate, concluding that because there were circumstances under which the trust could have made payments to Ms. Gsellman, it was an available resource. The court rejects the estate's argument that the trust was not an available resource because the trustee had discretion to deny funds after Ms. Gsellman became disabled, finding that as long as payments “could be made” to the individual applying for benefits, the trust counted toward the resource limit.
For the full text of this decision, go to: https://www.supremecourt.ohio.gov/rod/docs/pdf/9/2012/2012-ohio-1620.pdf
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