The Massachusetts appeals court recently held that even though an irrevocable, income-only trust expressly prohibited distributions of principal, other provisions in the trust could conceivably permit the trustees to invade trust assets, and thus the trust is countable for Medicaid purposes. Doherty v. Director of Medicaid (Mass. App. Ct., Essex, No. 08-P-939, June 18, 2009). In 2000, Muriel Doherty amended her existing family trust, declaring the trust irrevocable. She also removed herself as trustee and directed the successor trustees to distribute only the trust's income to her. The trust expressly stated that the trustees could "make no distributions of principal from the Trust, to or on behalf of" Ms. Doherty. After entering a nursing home in December 2005, Ms. Doherty applied for MassHealth/Medicaid benefits. MassHealth denied her application, concluding that, in at least some circumstances, the trust allowed Ms. Doherty's trustees to distribute trust asset
This blog is written by Elder Law Attorney, Edward H. Adamsky. You will find articles about Elder Law, Estate Planning, Special Needs, Disability, Alzheimer's Disease, Powers of Attorney, Health Care Directives, and other issues of important to families and elders.