Testamentary Trust & MEDICAID…

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Testamentary Trust Qualifies As SNT Despite Support Language

The Supreme Court of Connecticut rules that the state Department of Social Services improperly denied a Medicaid application after counting assets in a testamentary trust that should have been considered exempt because, the court holds, the trust was a discretionary supplemental needs trust, not a support trust. Pikula v. Department of Social Services (Conn., No. SC 19533, May 10, 2016).

John Pikula died in 1991, leaving behind a testamentary trust for the benefit of his daughters.  The trust gave the trustee the ability to use the trust income and principal for the daughters “as the trustee may deem advisable for [their] maintenance and support”.  In 2012, one of Mr. Pikula’s daughters, Marian Pikula, entered a long-term care facility and applied for Medicaid.  The Department of Social Services (DSS) denied Ms. Pikula’s application, alleging that the assets in the testamentary trust constituted a countable support trust.

Ms. Pikula appealed DSS’s decision, arguing that her father had intended to create a supplemental needs trust and that the discretionary language in the trust met the requirements of such a trust because Ms. Pikula could not compel payments from the trust for her support.  She was denied at an administrative level and on appeal to the trial court.  The Connecticut Supreme Court transferred Ms. Pikula’s appeal from the intermediate appellate court.

The Supreme Court of Connecticut reverses the trial court.  The court determines that “the fact that the trustee is only required to use as much income as he ‘may deem advisable’ to provide for [Ms. Pikula’s] maintenance, indicates that the testator intended for the trustee to have complete discretion in determining what, if any, of the income was to be used for [Ms. Pikula’s] maintenance.”  The court goes on the analyze the circumstances behind the creation of the trust, and it reasons that because the trust was established with a modest amount of money, it was clearly not intended to be used for Ms. Pikula’s long-term support.

Feel free to contact me for information about the type of Trust to suit your needs.

Regards,

Brian

www.RaphanLaw.com

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