In a case argued by the ElderLawAnswers member firm of Margolis & Bloom, a Massachusetts trial court rules that a Medicaid applicant's irrevocable trust was not an available asset even though it contained a provision permitting the trustee to determine what part of the trust property is income and what is principal. Yanow v. Office of Medicaid (Mass. Super. Ct., No. 1677CV00599, March 7, 2018).
Susan Yanow set up an irrevocable trust in 2009 that named her children and grandchildren as the beneficiaries. The trust provided for the payment of income earned on trust assets to Ms. Yanow, but barred the distribution of any principal to her. More than five years later she applied for Medicaid. The state determined that the trust was an available asset and denied her benefits.
Ms. Yanow appealed. The state affirmed the denial of benefits, concluding that due to an administrative provision in the trust that permits the trustee "to determine what part of the trust property is income and what part is principal" the trustee was able to deem all of the trust property "income" and distribute it to the Ms. Yanow. Ms. Yanow appealed to court.
The Massachusetts Superior Court, Essex, overturns the denial of benefits. Citing a Massachusetts Court of Appeals decision, Heyn v. Director of the Office of Medicaid (89 Mass. App. Ct. 312, 2016), the court finds that the standard trust provision relied on by the state does not permit the reclassification of trust property between income and principal without regard to the standard meanings of these terms. The court rules that the funds in the trust in question are not available to Ms. Yanow and that she should receive coverage.
Sarah Hartline, a senior associate at the Boston firm of Margolis & Bloom, represented Ms. Yanow.
For the full text of this decision, go to: https://cdn2.hubspot.net/hubfs/29051/docs/30A%20Decision.pdf?t=1521663008148
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