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A Massachusetts trial court has ruled that a Medicaid applicant’s irrevocable trust is an available asset because the applicant still had the right to live In, use and receive income from the condominium owned by the trust. See Daley v. Sudders (Mass. Super. Ct., No. 15-CV-0188-D, December 24, 2015).
On December 19, 2007, Mr. and Mrs. Daley established the “James Daley and Mary Daley Irrevocable Trust”, and appointed their son, James Daley, and their daughter, Patricia Tubaj, as the trustees. On the same day, Mr. and Mrs. Daley transferred their interest in their condominium located in Worcester to the Trust. They retained a life estate for each of them in the deed conveying the property into the Trust.
About 6 years later, Mr. Daley was admitted to the Millbury Health Care Center on December 20, 2013. He applied for MassHealth benefits on February 21, 2014, seeking an eligibility date of January 19, 2014. His application was denied on the grounds that his assets exceeded the $2,000 asset limit due to inclusion of Trust principal (the condominium) valued at $150,943. The denial was appealed to a fair hearing, at which the ALJ affirmed Mass-Health’s decision to count the Trust’s principal as an asset because 1) Mr. and Mrs. Daley’s deed explicitly reserved their right to occupy and use the condominium; and 2) their Trust granted them the right to convert the Trust’s principal to income. Mr. Daley died on November 13, 2014, and Mrs. Daley brought this appeal as Personal Representative of his estate, claiming she had no access to the condominium that was placed into the irrevocable trust and, since there were no assets, they were indigent and unable to pay for Mr. Daley’s nursing home costs.
Download our FREE thought paper below on the Daley v. Sudders case to read the facts, holdings and considerations in drafting a Massachusetts MAPT.