Last week, senior citizens rejoiced at a landmark Mass. Supreme Judicial Court case decision. MassHealth, argued against two seniors who applied for long term care coverage. The applicants each owned assets in a special irrevocable trust designed for nursing home protection. Under the agency’s regulations, assets owned under an irrevocable trust are not countable, as long as the principal of the trust assets was unavailable to the applicant. The concept of an asset’s “availability” was scrutinized at length in the case.
MassHealth argued the seniors retained rights to live in the home, previously conveyed to the irrevocable trust. Thus, MassHealth claimed the home was “available” to the applicants, and should be counted as an asset subject to a lien. The seniors, and many industry groups, argued using traditional trust and property law concepts. In the end, the court agreed that “availability” of a trust asset’s principal related strictly to the trustee’s ability to distribute trust principal. The concept related to ownership vs. use of a trust asset.
These seniors did the estate planning work. They obtained the trusts authorized by the MassHealth regulations. Unfortunately, these seniors had to fight the agency, all the way to the Commonwealth’s highest Court, just to prove they protected their homes. This victory, however, benefits all applicants who own their homes under an irrevocable trust.
Attorney James Haroutunian practices real-estate law, estate planning and probate at 630 Boston Road, Billerica. He gladly invites questions at james@hlawoffice.com or by phone at 978-671-0711. His website blog is found at www.hlawoffice.com. This column is published for informational purposes only and not to be relied on as legal advice, in any manner.
MassHealth argued the seniors retained rights to live in the home, previously conveyed to the irrevocable trust. Thus, MassHealth claimed the home was “available” to the applicants, and should be counted as an asset subject to a lien. The seniors, and many industry groups, argued using traditional trust and property law concepts. In the end, the court agreed that “availability” of a trust asset’s principal related strictly to the trustee’s ability to distribute trust principal. The concept related to ownership vs. use of a trust asset.
These seniors did the estate planning work. They obtained the trusts authorized by the MassHealth regulations. Unfortunately, these seniors had to fight the agency, all the way to the Commonwealth’s highest Court, just to prove they protected their homes. This victory, however, benefits all applicants who own their homes under an irrevocable trust.
Attorney James Haroutunian practices real-estate law, estate planning and probate at 630 Boston Road, Billerica. He gladly invites questions at james@hlawoffice.com or by phone at 978-671-0711. His website blog is found at www.hlawoffice.com. This column is published for informational purposes only and not to be relied on as legal advice, in any manner.
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