Hot Topics in the Law and in the News.

Friday, April 9, 2010

Be careful of Medicaid Planning Trusts in Massachusetts

Many people who need long term care turn to MassHealth ("Medicaid") to fund the cost of their care.  However, Congress has been very specific in stating that Medicaid benefits shall only be made available “to people who do not have sufficient income or resources to provide for themselves." H.R.Rep. No. 265, 99th Cong., 1st Sess., pt. 1, at 72 (1985.) Those who apply for MassHealth assistance for long term care cannot own more than a total of $2,000 in assets.  Reducing the size of one's estate to below $2,000 often involves the use of Trusts, which are known as "Medicaid Planning Trusts." 

Trusts that exclude assets from a person's estate for Medicaid purposes must meet certain very strict requirements.  Recently, the Massachusetts Appeals Court upheld the MassHealth determination that an irrevocable, income-only trust which expressly prohibits distributions of principal, but which contains other provisions which could conceivably permit the trustees to invade trust assets, is a countable asset for Medicaid purposes. Doherty v. Director of the Office of Medicaid (Mass. App. Ct., Essex, No. 08-P-939, June 18, 2009).

This Appeals Court decision is just one more skirmish in the battle over Medicaid benefits.  And, while trusts are still an important instrument to protect assets when planning for long term care, Medicaid Planning Trusts must be very carefully drawn to assure compliance with the applicable Federal statutes and the Massachusetts regulations.

To make sure that your estate plan will meet your needs for long term care, write to Attorney Freya Shoffner or give her a call at 617-369-0111.  The lawyers at Shoffner & Associates are ready to help you. 

No comments:

Post a Comment