The Nebraska Court of Appeals rules that a self-settled irrevocable trust containing real property is an available asset for Medicaid purposes and that the funding of the trust was not a transfer of assets subject to Medicaid's look-back provisions. Boruch v. Nebraska Dept. of Health and Human Services (Neb. Ct. App., No. A-01-658, April 15, 2003).
In November 1993, Lambert Boruch executed an irrevocable trust to which he conveyed real property. Mr. Lambert was the grantor and beneficiary of the trust corpus, and his son, Ronald, was a co-successor trustee. The trust provided that Mr. Boruch was entitled to the use and possession of the property, as well as its income, for his lifetime. In 1999, Mr. Boruch moved to a nursing home and Ronald applied for Medicaid assistance on his father''s behalf shortly thereafter. The Nebraska Department of Health and Human Services (DHHS) determined that the trust was an available resource and rejected the application. The district court upheld the DHHS determination and Ronald appealed, asserting that the DHHS ruling was contrary to law. Ronald also argued that only the income should be counted because the trust was a transfer of assets, meaning that Medicaid''s look-back provisions should apply.
The Nebraska Court of Appeals affirms, ruling that the trust corpus as well as the income generated from it should be counted in determining Mr. Boruch''s Medicaid eligibility. The court notes that as a result of amendments to state and federal Medicaid statutes enacted in 1993, "if an individual establishes an irrevocable trust with his or her funds and is the beneficiary of or can benefit from the trust under any circumstances, the trust corpus is counted in the determination of Medicaid eligibility." [emphasis in court ruling] The court also holds that transferring real estate to a trust of which the transferor is the sole beneficiary is not a disposal at less than market value within the meaning of the look-back statutes. However, the court states that its finding that the trust is an available resource trumps any need to consult Medicaid''s look-back provisions.
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