A Connecticut trial court rules that a trust is an available asset despite a probate court’s earlier holding that the trust is a supplemental needs trust from which the trustee cannot be compelled to make distributions. Pikula v. Commissioner of Social Services (Conn. Super. Ct., No. HHBCV146024057S, Nov. 13, 2014). (unpublished)
In 1989, John Pikula executed a will containing a testamentary trust for his two daughters, Marian Pikula and Dorothy McKee. When Mr. Pikula died in 1991, the trust became effective. In March 2012, Ms. Pikula entered a long-term care facility and applied for Medicaid benefits. The Connecticut Department of Social Services counted the trust, then valued at $169,746, as an available asset and denied the application. Ms. Pikula’s sister, Dorothy McKee, then filed an application in probate court to obtain a court ruling concerning whether or not Ms. Pikula could compel the trustee to distribute the trust principal for her benefit. After the Department failed to appear at the next hearing, the probate court ruled that Ms. Pikula is the “beneficiary of a supplemental needs trust and as such cannot compel the trustee to make distributions from the trust.”
At a subsequent fair hearing on the Department’s decision, the hearing officer ruled that the trust is a “general support trust” for Ms. Pikula’s “maintenance and support” and that the trust was available to her. The hearing officer acknowledged the probate court decree but concluded that a probate order “is not used to determine eligibility for assistance for Department of Social Services programs.” Ms. Pikula appealed to court, arguing that the probate court's decision operated as a collateral estoppel bar to the Department's determination of ineligibility and that the trust is not an available asset for Medicaid purposes.
The Superior Court of Connecticut affirms the Department’s decision. First, the court holds that the Department was not bound by the probate decree because the Department has primary jurisdiction over the Medicaid eligibility determination. Second, the court rules that the trust is an available asset because the trust “provided that the trustee had a mandatory duty to use as much of the trust income for the maintenance and support of one specific beneficiary as the trustee deemed advisable and that he had discretion to use principal, even to the point of exhausting it, to provide for expenses related to her illness and disability.”
For the full text of this decision, click here.
Subscribe to the Knowledge Bank.
