In 1981, Caroline Myers executed a will that provided for a trust for the care, support, and maintenance of her son, Darrell. Upon Ms. Myers'' death in November 1989, the trust was funded with $110,000. Darrell, who suffers from mental and physical disabilities, had been receiving public medical assistance for several years prior to the funding of the trust. In 1990, the Kansas Department of Social Services and Rehabilitation terminated Darrell''s medical assistance because he failed to return an annual eligibility form. Darrell reapplied for assistance several times, but his application was denied because the Department determined that the assets held in trust were available to him. Both the district court and the court of appeals held that the trust was discretionary and that its assets were unavailable to Darrell. The Department appealed.
The relevant portion of Ms. Myers'' trust provides:
"During my son''s life time, my trustee shall hold, manage, invest and reinvest, collect the income there from [sic] any [sic] pay over so much or all the net income and principal to my son as my trustee deems advisable for his care, support, maintenance, emergencies, and welfare."
The Department, noting that the phrase "as my trustee deems advisable" is inconsistent with the "shall pay" language, argues that the "shall pay" language should control. According to this reasoning, "shall" applies equally to the management of the trust and to the direction to pay, with the trustee''s discretion limited to how and when payments are to be made. Thus, argues the Department, the language requires the trustee to provide for Darrell''s support, making the trust funds available for purposes of assessing Darrell''s public medical assistance eligibility.
The court rejects the Department''s construction of the trust provisions. The word "shall," the court holds, applies only to managing, holding, investing and reinvesting, and the collection of income; the rest of the sentence gives the trustee complete discretion to determine whether funds are to be paid out on Darrell''s behalf. This construction, the court determines, is consistent with the purpose of the trust, which is to provide for Darrell during his lifetime and to preserve the remainder for Ms. Myers'' daughter and granddaughter. The court observes that If the trust were indeed a support and maintenance trust, it would be exhausted in less than three-and-a-half years. Accordingly, the court rules that the trust is discretionary and its funds should be regarded as unavailable to Darrell in assessing his medical assistance eligibility.
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