A Minnesota appeals court rules that a Medicaid applicant's irrevocable trust is an available asset for Medicaid eligibility purposes because the trust gives the applicant the right to borrow money from the trust without interest. Edholm v. Minnesota Dept. of Human Services (Minn. Ct. App., No. A12-1623, June 17, 2013).
Mary Edholm created an irrevocable trust that named her sons as trustees and her children as beneficiaries. The trust provided that Ms. Edholm reserved the right to borrow income or principal from the trust without providing interest or giving security. Several years later, Ms. Edholm applied for Medicaid benefits. The state denied her benefits after determining that the trust assets were available assets for the purposes of Medicaid eligibility.
Ms. Edholm appealed the state's decision. A hearing officer agreed with the state, and a trial court affirmed. Ms. Edholm appealed again, arguing that the provision does not authorize payment from the trust because she has an obligation to pay back any loan she receives from the trust.
The Minnesota Court of Appeals affirms, holding the trust is an available asset. According to the court, under the federal Medicaid statute, if there are any circumstances in which a payment from a trust could be made to an applicant, then the resources are available. The court rules that because Ms. Edholm's "trust gives her an unlimited ability to access the trust's assets, it is encompassed by the broad terms of the statute."
For the full text of this decision, go to: https://mn.gov/lawlib/archive/ctapun/1306/opa121623-061713.pdf
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