• Irrevocable Trusts: A promising development

Linda T. Cammuso:

In our Fall 2013 issue, Volume 8, of Estate Preservation Law’s newsletter Bridging the Gap, we apprised readers “that the use of irrevocable trusts has met with resistance from the MassHealth agency in the application process. Although these trusts seemingly meet applicable state and Federal guidelines MassHealth has recently argued that many irrevocable trusts are ‘countable’, meaning they are characterizing the trust assets as available to the applicant for long-term care expenses.”

Over the past couple years, the elder law bar in Massachusetts has been strategically and steadfastly fighting the denials of Medicaid applications by the state agency that have been based on an erroneous interpretation of trust law.  During this time, there have also been many successful applications involving irrevocable trusts, but the outcomes of applications have been inconsistent.

We are now pleased to report that the recent case at the MA Appeals Court level, Heyn v Director of the Office of Medicaid (AC 15-P-166), dated April 15, 2016, affirms the effectiveness of properly-drafted irrevocable trusts and reverses the judgement of the Superior Court which earlier had affirmed MassHealth’s termination of benefits to the plaintiff’s decedent.  This case is binding law that the MassHealth agency must follow in its future decisions and is a very promising development.

We will continue to monitor the Heyn decision and keep our clients and colleagues informed.

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