An Arkansas appeals court rules that a Medicaid applicant’s irrevocable trust is an available resource because the trustee had the discretion to make distributions for the applicant’s health and welfare. Arkansas Department of Human Services v. Hogan (Ark. Ct. App., No. CV-19-491, Feb. 19, 2020)
Bobbie Hogan created an irrevocable trust, which gave the trustee the discretion to make distributions of principal and income for Ms. Hogan’s health, support, medical care, and welfare. Ms. Hogan transferred her home to the trust, sold the home, and deposited the proceeds in the trust. More than five years later, Ms. Hogan applied for Medicaid. The state determined that the trust was an available resource and denied her benefits.
Ms. Hogan appealed the denial to court. The trial court ruled that the trust was not an available resource because the trustee had absolute discretion to make distributions. The state appealed.
The Arkansas Court of Appeal reverses, holding that the trust is an available resource. According to the court, because the trust allowed distributions of principal and income for Ms. Hogan’s health, support, medical care, and welfare, “there are circumstances in which payments can be made to or for the benefit of [Ms. Hogan] from the trust, making the trust an appropriate available resource for [Ms. Hogan].”
For the full text of this decision, go to: https://opinions.arcourts.gov/ark/courtofappeals/en/item/461568/index.do
Did you know that the ElderLawAnswers database now contains summaries of more than 2,000 fully searchable elder law decisions dating back to 1993? To search the database, click here.
Subscribe to the Knowledge Bank.
