Massachusetts Court Upholds Validity of Medicaid Trust
January 12th, 2015 by beasleyferber
In the case of O’Leary v. Director of Medicaid, decided in September 2014, the Mass. Superior Court handed Elder Law Attorneys and their Senior clients a resounding victory. Mrs. O’Leary had made an Irrevocable Medicaid Trust into which she had put her home. Her application for Medicaid benefits was initially denied, and she filed an appeal to the courts. The trust allowed her to get all of the income, allowed the trustee to distribute trust principal to the beneficiaries, and allowed Mrs. O’Leary to purchase trust assets for fair market value. In denying her Medicaid application, the state argued that these provisions, in effect, allowed Mrs.O’Leary to receive principal, thereby rendering the trust a countable asset. The court completely rejected the state’s arguments, and gave Mrs. O’Leary a resounding victory. In upholding the validity of the trust, the court re-affirmed that a properly drafted Medicaid Trust will be effective in protecting assets from the cost of long-term care.