Massachusetts’ highest court rules that a trust that granted a Medicaid applicant a limited power of appointment to appoint a portion of the trust principal to a nonprofit organization did not allow the applicant to use the trust to pay for her care at a nonprofit nursing home, so the trust was not a countable asset for the purposes of Medicaid eligibility. Fournier v. Secretary of the Executive Office of Health and Human Services (Mass., No. SJC-13059, July 23, 2021).
Emily Misiaszek created an irrevocable trust and placed her house in the trust and named her daughter, Patricia Fournier, as the trustee. The trust stated that its purpose was to manage Ms. Misiaszek’s assets to allow her to live in the community as long as possible. It also stated that the principal of the trust should be held until the termination of the trust, but it gave Ms. Misiaszek a limited power of appointment to appoint all or any portion of the trust principal to a nonprofit or charitable organization that she had no controlling interest in. Ms. Misiaszek entered a nursing home and applied for MassHealth (Medicaid). The state denied her benefits, claiming that the assets in the trust were available because the trust permitted Ms. Misiaszek to appoint the trust principal to a nonprofit nursing home to pay for her care.
Ms. Misiaszek appealed, arguing that the assets in the trust were not countable. The state affirmed the denial, and Ms. Misiaszek appealed to court. The trial court reversed the state’s decision. The state appealed, arguing that because the trust did not contain language expressly preventing transfers of principal to benefit Ms. Misiaszek, she could use her limited power of appointment to pay for her care.
The Massachusetts Supreme Judicial Court affirms, holding that the trust is not an available asset. According to the court, the trust did not contain any language allowing Ms. Misiaszek to benefit personally from any distribution of trust principal; rather, the trust reflected Ms. Misiaszek’s intent to preserve the principal for her children. The court rules “that under the terms of her trust, [Ms.] Misiaszek's limited power of appointment does not allow her, in any circumstance, to appoint the trust principal for her benefit, and thus the trust principal is not ‘countable’ for purposes of determining her eligibility for MassHealth benefits.”
For the full text of this decision, go to: https://www.mass.gov/files/documents/2021/07/23/b13059.pdf
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.