Recent Developments in Elder Law - Selected Cases and Legislation
III. RECENT TITLE XIX LITIGATION
This section will include a review of four cases that impact Title XIX Litigation; two of the cases were tried in federal court, two of the cases were tried in Connecticut state court.
A. Lopes v. Dep’t of Soc. Servs., 696 F.3d 180 (2d Cir. 2012).
The first case is Lopes v. Dep’t of Soc. Servs., 696 F.3d 180 (2d Cir. 2012), which involves Title XIX planning with annuities.4
The use of immediate annuities in Medicaid planning is complicated and fraught with land mines but this is a technique than can provide spouses of nursing home residents with significant financial benefits. The genesis for this planning strategy is set forth in the Medicare Catastrophic Coverage Act of 1988 (“MCCA”), which provides a framework to prevent spousal impoverishment under the Medicaid rules. Specifically, MCCA exempts certain assets and prohibits the deeming of spousal income—which includes payments from an immediate annuity—in determining financial eligibility for Medicaid.5
The landmark decision on this issue is Lopes v. Dep’t of Soc. Servs., 696 F.3d 180 (2d Cir. 2012). Lopes involved a challenge of the Connecticut Department of Social Services (DSS”) policy regarding the treatment of non-qualified, immediate annuities6 on the basis that the DSS regulation was more restrictive than the rights afforded the spouse of a nursing home resident (“Community Spouse”) under federal law.7 Amelia Lopes purchased a single premium immediate annuity with $166,000.00, reducing her resources to slightly less than the sum protected a Community Spouse. Her annuity complied in all respects with the requirements of federal Medicaid law for the purchase of an annuity not to be considered a disqualifying transfer of assets: the state of Connecticut was the remainder beneficiary in the first position for at least the total amount of Medicaid paid on behalf of the institutionalized spouse; the annuity was irrevocable and non-assignable; the annuity was actuarially sound based upon actuarial publications of the Social Security Administration; and the annuity provided for payment in equal monthly amounts.
1. The Framework of a Section 1983 Claim
Mrs. Lopes filed for injunctive relief in federal district court under 42 U.S.C Section 1983, which provides for redress when a State infringes on an individual’s rights protected under the Constitution or federal statute. Specifically, a Medicaid applicant or beneficiary has a cause of action in federal court against “[e]very person who, under color of any statute, ordinance, regulation, custom, or usage, of any State …causes…the deprivation of any rights, privileges, or immunities secured by the Constitution and laws….” Id. Although Congress enacted Section 1983 to provide an enforcement mechanism when States deprived individuals of their equal protection under the Fourteenth Amendment, Medicaid applicants and beneficiaries have an enforceable individual right to medical assistance. See 42 U.S.C. § 1396-a(a)(10), and Maine v. Thiboutot, 448 U.S. 1 (1980). A Section 1983 claim, therefore, is rooted in the doctrine of conflict preemption- that a state participating in the Medicaid program may not promulgate a statute or regulation in contravention of federal law as provided for in the Supremacy Clause.8 Although the Supremacy Clause provides for preemption when State laws conflict, it does not confer an individual right that an individual may enforce; hence the necessity of Section 1983 actions.
Since a violation that occurs pursuant to Section 1983 must come at the hands of a State official (“every person who….”), a claim is made against the DSS Commissioner, not the State of Connecticut. (Additionally, the Eleventh Amendment of the U.S. Constitution provides States with immunity from lawsuits.) It is important that the claim is a violation of a personal federal right, not just the law—i.e., the Medicaid applicant must have an individual right afforded protection under the federal statute.9 The motion for preliminary injunctive relief must allege irreparable injury; the lack of retroactive relief in federal court, pursuant to the Eleventh Amendment, is cause for irreparable injury,10 and the loss of benefits resulting from the Eleventh Amendment limitation on retroactive relief is irreparable injury per se.11
In Mrs. Lopes’ motion for preliminary injunction, she moved to enjoin the State from enforcing Uniform Policy Manual (“UPM”) Regulation §4030.47 (2007). She argued that the regulation: (1) violated the Medicaid comparability doctrine (meaning it is more restrictive than the Supplemental Security Program’s (“SSI”) treatment of annuities); and (2) contravened the Medicaid spousal income rules in counting as an asset income that is exempt for a Community Spouse.12 Mrs. Lopes came to an agreement with DSS where she would withdraw her motion for preliminary injunction and in return DSS agreed that, if she were successful on the merits, it would grant the Medicaid application retroactively effective to the month in which she applied for Medicaid. The agreement effectively mooted out her argument for a preliminary injunction (there no longer being an 11th Amendment immunity issue); the Parties, therefore, proceeded with cross motions for Summary Judgment.
2. The Federal District Court Case
The DSS argued that, because it denied the Medicaid application for failure to cooperate in pursing what it considered to be a potentially available resource instead of relying on the application of UPM §4030.47 for its denial, Mrs. Lopes lacked standing. She responded that: (1) the stream of annuity payments cannot be characterized as a resource at all, but rather income belonging solely to the community spouse; and (2) the DSS could not have denied the application without relying on UPM §4030.47 for the legal justification of doing so. The Court agreed: “Plaintiff has standing to challenge the DSS’s treatment of Mrs. Lopes’ annuity as an ‘asset’ in connection with DSS’s conclusion that Mrs. Lopes failed to cooperate in collecting an ‘asset’.”13
The plaintiff argued that the DSS ignored the fact that Mrs. Lopes had no right, authority or power to liquidate her annuity and, consequently, that an irrevocable annuity in payment status could not be counted as an available resource under SSI or Medicaid because 42 U.S.C. § 1396a(a)(10)(C)(i)(III) prohibits Medicaid from using a more restrictive methodology for evaluating resources than the SSI program uses.
The court agreed that Connecticut was preempted by federal law.
UPM section 4030.47 violates federal law, as applied to Mr. and Mrs. Lopes, by treating Mrs. Lopes’ income stream as an asset, a characterization which is more restrictive (admits less applicants) than would be applied to a similarly situated individual under the methodology utilized by SSI. Id. at *12.
3. The Second Circuit Court of Appeals
The United States Court of Appeals for the Second Circuit affirmed the district court decision, holding that “the payment stream from a non-assignable annuity is not a resource for purposes of determining Medicaid eligibility.” Lopes v. Dep’t of Soc. Servs., 696 F.3d 180, 188 (2012). Furthermore, the court found it irrelevant that the nursing home resident’s spouse—Mrs. Lopes—purchased the annuity immediately prior to submitting the Medicaid application for her husband, who resides in a nursing home. Id. at 186.
The court was additionally influenced by the views, which it solicited on its own, of the U.S. Department of Health and Human Services (HHS). Specifically, the court posed two questions to HHS: (1) whether the social security regulations require a State to treat an income stream from an irrevocable annuity as either income or an asset; and (2) the policy implications of affirming the decision. HHS filed an amicus brief urging the Court of Appeals to accept Mrs. Lopes' position and to affirm the decision of the federal district court. HHS opined that the social security regulations did not require Mrs. Lopes to renegotiate or breach her annuity contract. In responding to the public policy question, the agency concluded that Mrs. Lopes’ retention of the annuity payments as her income was consistent with Medicaid's primary purpose of providing health care to the indigent and protecting community spouses from impoverishment. Id. at 188.
It is noteworthy that the Second Circuit joined several other federal circuit courts that had similarly upheld the treatment of community spouse immediate annuities as income streams rather than assets. Nevertheless, the Connecticut Department of Social Services proposed a bill in the 2016 legislative session that would have limited the effect of spousal annuities. Although the legislature did not pass the bill, there is uncertainty about the long-term viability of this planning technique.
B. Simonsen v. Bremby, 2015 U.S. Dist. LEXIS 171099 (D. Conn. Dec. 23, 2015)
In Simonsen v. Bremby, 2015 U.S. Dist. LEXIS 171099 (D. Conn. Dec. 23, 2015), the issue before the federal district court was whether the act of decanting a trust is an asset transfer. The Plaintiff, Dawn Simonsen, a 57 year old quadriplegic, was admitted to the Hospital for Special Care in October 2013 after she was found that month unconscious, and since that time has been a resident that requires ventilator care.14 Id. at *2.
Ms. Simonsen was the beneficiary of two trusts, of which her late mother, a Florida resident at the time of her death, was the grantor. The trusts provided identical distribution standards:
The trustee shall pay to my daughter or utilize for her benefit so much of the income and principal of her trust as the trustee deems necessary or advisable from time to time for her health, maintenance in reasonable comfort, education and best interests considering all of her resources known to the trustee and her ability to manage and use such funds for her benefits. In exercising its discretion… the trustee shall bear in mind that my daughter has suffered severely from alcohol and drug abuse and that I do not want these trust funds to be used to support a drug or alcohol habit or any other activity which may be detrimental to her in the trustee’s sole opinion.
My daughter's health, happiness and best interests are to be considered foremost in priority over those who will receive the remaining trust funds on her death. Subject to the above considerations the trustee is encouraged to be liberal in its use of the funds for her even to the extent of the full expenditure thereof.15
Each trust contained a spendthrift clause, providing that “[t]he interests of beneficiaries in principal or income shall not be subject to the claims of any creditor, any spouse for alimony or support, or others, or to legal process, and may not be involuntarily alienated or encumbered.” Id. at *4, citing Doc. No. 23-2, at 20-21.
In 2014, the trustee of both trusts petitioned the Florida Circuit Court for the 11th Judicial Circuit in and for Miami-Dade County, Probate Division, for an order decanting those trusts to two new trusts. In September 2014, the court granted the petition. The Trustee then transferred all funds from the trusts to two Third Party Special Needs Trusts for Ms. Simonsen’s sole benefit. Id. at *5, *6. Upon Ms. Simonsen’s application for Medicaid benefits, the Department concluded that the assets of the two former trusts were general support trusts, and thus available to Ms. Simsonsen for purposes of determining financial eligibility.16 Consequently the Department assessed a transfer of assets penalty on the basis that Ms. Simsonsen’s waiver and consent to the decanting constituted a transfer of assets.17 Ms. Simonsen filed a motion for a temporary restraining order and a preliminary injunction to require the Department to grant Medicaid benefits. Additionally, Ms. Simonsen requested an administrative Fair Hearing regarding the Department’s denial of benefits, after which, the Hearing Officer upheld the Department’s decision to deny benefits.
1. Conflict Preemption
Ms. Simonsen filed her claim under 42 U.S.C. § 1983 on the basis that the Department’s methodology regarding the treatment of trusts is more restrictive than the SSI methodology, in which case, the Department would be preempted by federal law because of the conflict at the state level.18 The federal regulation—20 C.F.R. § 416.1201—provides that resources are "cash or other liquid assets or any real or personal property that an individual . . . owns and could convert to cash to be used for his or her support and maintenance." The regulation further provides that: "If the individual has the right, authority or power to liquidate the property or his or her share of the property, it is considered a resource. If a property right cannot be liquidated, the property will not be considered a resource of the individual (or spouse).” Simonsen at *13, citing 20 C.F.R. § 416.1201(a)(1).
2. The POMS
The SSI guidelines are set forth in the Social Security Administration Program Operations System Manual (the “POMS”), which are entitled to considerable deference. Lopes, 696 F.3d 180 at 186-187. The POMS provide clarification regarding the availability of trust assets in POMS SI §01120.200D2., which provides “If an individual does not have the legal authority to revoke or terminate the trust or to direct the use of the trust assets for his or her own support and maintenance, the trust principal is not the individual’s resource for SSI purposes.” (Emphasis in original.) In its decision granting Ms. Simonsen’s motion for a preliminary injunction, the Simonsen court applied the foregoing POMS Section to the language from Ms. Simsonsen’s former Florida trusts and concluded that the trusts were not countable as assets under SSI: “The Predecessor Trusts in this case do not contain terms providing the beneficiary with any right or authority to direct any payments, and instead empowered the Trustee with the sole discretion to determine when to make a distribution.” Simonsen at *17.
The court was further influenced by Section SI 01120.200B.16 of the POMS, which provides “A spendthrift clause or trust prohibits both involuntary and voluntary transfers of the beneficiary’s interest in the trust income or principal. . . . a valid spendthrift clause would make the value of the beneficiary’s right to receive payments not countable as a resource.” (emphasis in original). Ms. Simsonsen’s Florida trusts contained spendthrift clauses, which are valid under Florida law.19 Consequently, the court held that Ms. Simonsen’s Florida trusts could not be counted as assets in determining SSI eligibility and, therefore, they could not be counted for Medicaid eligibility, either. Simonsen at *20.
Since the Florida trusts were not countable resources of Ms. Simonsen, their transfer to the new third-party special needs trusts could not have been disqualifying transfers of assets, either. The controlling federal statute, 42 U.S.C. §1296p(d)(1)(A), authorizes transfer of assets penalties to be imposed on transfers made by individuals from their own resources, but the transfers to the new trusts were not made by Ms. Simonsen and were not made from assets that were available to her in determining Medicaid eligibility. The DSS policy was thus preempted under federal law, and the court enjoined the DSS from terminating Medicaid benefits, treating the Florida trusts as available resources for Medicaid eligibility, and treating the decanting as a transfer of assets penalty. Id. at *22.
3. Impact on C.G.S. § 17b-261(c)
The DSS has appealed the Simonsen decision granting the motion for a preliminary injunction. Consequently, there are a few more channels to navigate before there is a possibility of a binding precedent. But, the initial decision is very promising and the result could well ring the death knell on C.G.S §17b-261(c). This statute requires that the DSS treat as available for Medicaid eligibility purposes, trust assets “if the terms of a trust provide for the support of a [Medicaid] applicant,” so that “the refusal of a trustee to make a distribution from the trust does not render the trust an unavailable asset.” Conn. Gen. Stat. §17b-261(c)(2016). In cases where a Medicaid applicant is a beneficiary of a general support trust, therefore, the DSS would treat the trust as available to the applicant because—despite a Trustee’s potential refusal to distribute trust principal to the applicant—the beneficiary could compel distributions. This statute is consistent with the DSS Medicaid regulations, known as the Uniform Policy Manual, which provide that a trustee’s failure to distribute the trust principal to a beneficiary of a support trust would be considered an abuse of the trustee’s discretion.20
In light of Simonsen, if a trust contains a spendthrift clause (which are valid in Connecticut21), “the beneficiary has no legal right or authority to access the trust principal, and, therefore, it is not counted as an available resource for SSI, and consequently Medicaid, eligibility, purposes.” Simonsen at *19. And the court further concluded that if a trustee refuses to make a distribution of principal—even if this refusal rises to the level of an abuse of discretion—a beneficiary may not be forced to sue the trustee to gain access to the principal. Id. at *20, citing POMS SI § 01120.010D7. This is exactly what C.G.S §17b-261(c) implicitly requires, although the statute makes it unnecessary for the beneficiary to go through the motions of suing the trustee to compel distributions; the DSS simply counts the trust principal as available for Medicaid in cases where a trustee refuses to make a distribution and denies the Medicaid application. If there is continued success in the Simonsen litigation, such DSS denials will become impermissible.
C. Pikula v. Department of Social Services, 321 Conn. 25 (2016).
In Pikula v. Dep’t of Soc. Servs., 321 Conn. 259 (2016), the Connecticut Supreme Court established clear guidelines for assessing when a trust is established for a beneficiary’s supplemental needs or general support, comparing and contrasting the framework set forth in the two landmark cases on this issue: Zeoli v. Commissioner of Social Services, 179 Conn. 83, 425 A.2d 553 (1979) and Corcoran v. Dept. of Social Services, 271 Conn. 679, 859 A.2d 533 (2004). Pikula involved a testamentary trust that the testator created for the benefit of his daughters, one of whom was residing in a skilled nursing facility and had applied for Medicaid benefits. Id. at 260. The DSS counted the trust as available to the applicant daughter and denied the Medicaid application; this decision was affirmed at a Fair Hearing and the superior court, after which the case was transferred to the Connecticut Supreme Court.22
The Pikula court focused on three components to determine whether there is an intent to create a supplemental needs trust: (1) the degree of the trustee’s discretion to make income and principal distributions; (2) the extent to which there are “limitations or guiding principles within which the trustee must operate”; and (3) the amount of trust assets, as applied to the facts THE DECISION SAYS THAT THE THIRD PRONG IS “THE FACTUAL CIRCUMSTANCES REGARDING THE ESTABLISHMENT OF THE TRUST, INCLUDING THE AMOUNT OF THE TRUST.” Id. at 274.
1. Trustee’s Discretion
The Court analyzed the trustee’s discretion regarding income and principal distributions separately, but in both cases, the trustee in Pikula was to make distributions for the beneficiary’s support and maintenance. Id. at 275. In reviewing the discretion regarding income distributions, the Court found that the trustee’s ability to make income distributions “as the trustee may deem advisable” consistent with having “complete discretion” for such maintenance and support. Id. The Court found important the fact that the trust income would have been insufficient (due to its small size) to provide for the beneficiary’s needs. Id.
In assessing the discretion to make principal distributions, the Court was influenced by the language providing the trustee with “sole and absolute” discretion that was conclusive on all beneficiaries, and exculpatory language exonerating the trustee for distributions. Taken together, the Court concluded that these two stipulations accorded the trustee unfettered discretion and prohibited the beneficiary from compelling distributions. Id. at 276.
2. Limitations or Guiding Principles
In applying the second prong, the Court reviewed the trust language for limitations or guiding principles imposed on the trustee. Here, there was a guiding principle—that the trustee distribute income and principal for the beneficiary’s “support and maintenance.” But the Court stressed that the language preceding the distribution standard granted the trustee “broad discretion” to make distributions “only if [the trustee] deems advisable.” Id. Specifically, the language preceding the “support and maintenance” standard authorized the trustee to make distributions in his “sole and absolute discretion.” Id. at 274.
The distribution language did not, like the Corcoran trust, have a full ascertainable standard (health, education, maintenance and support); instead, the Pikula trust required that the trustee provide for the beneficiary’s support and maintenance. But, the Court delved further, and in contrasting the trust with that of Corcoran23, the Court concluded that the ascertainable standard in that trust limited the trustee’s discretion to the point where it afforded the beneficiary a legal right to compel distributions, 24thus rendering the trust available. Id. at 276.
Lastly, the Court compared the Pikula trust language to Zeoli and concluded that it was analogous to Zeoli. Specifically, the Court noted that the Pikula and Zeoli trusts were both devoid of language limiting the trustee’s discretion.25 In Corcoran, the trustee was bound by an express directive (“the trustee shall…[pay] to….), whereas in Zeoli (“[I]t is my fond hope that my trustee pay….”) and Pikula (“I hereby authorize and empower the trustee in his sole and absolute discretion….”) the guiding principal in each case was precatory. The Court concluded that this lack of a Corcoran-like limitation did not inhibit the trustee’s discretion and was, consequently, intended to provide for the beneficiary’s supplemental needs. Id at 276.
3. The factual circumstances
The third prong requires a court to consider the factual circumstances in establishing the trust, and, in particular, the amount of assets in the trust. This issue was relevant in Zeoli (trust assets totaling $9,500.00) and Corcoran (trust valued at $854,000.00). Id. at 277. The amount of trust assets, however, is not the dispositive factor; the Court in Pikula stressed the importance of the factual circumstances. In Pikula, the trust comprised a home that, when sold, netted approximately $170,000. Id. at 278. The Court took into account the beneficiary’s cost of long term care and concluded that the testator could not have intended that a general support trust because the funds “would be quickly exhausted if they were applied to the expenses related to the plaintiff’s impairment for which she has sought residential placement.” Id.
The Pikula test now provides for a precise framework for defining what a supplemental needs trust is. However, the diligent practitioner should not leave it to interpretation and should draft such trusts with clarity and accuracy to ensure that the trustee’s fiduciary responsibility rests unambiguously in providing for the beneficiary’s supplemental needs.
D. Valliere et al. v. Bremby, 2015 Conn. Super. LEXIS 2938, 18-19 (November 24, 2015).
The fourth, and final, Title XIX case is the Connecticut state court case, Valliere et al. v. Bremby, 2015 Conn. Super. LEXIS 2938 (November 24, 2015).
Valliere includes: (1) a DSS eligibility decision; (2) a probate court order; and (3) a superior court order. The Department has appealed the superior court decision and, at the time of this writing, the appeal is pending in the Supreme Court.
Marjorie Valliere was institutionalized in a long term care facility. Her husband, Paul Valliere, was living in the community. Marjorie’s daughter, Ellen Shea, was appointed Marjorie’s conservator of estate and person. Ellen applied to the probate court, pursuant to C.G.S. §17b-261b and C.G.S. §45a-655, for an order of spousal support for the community spouse, Paul. Pursuant to C.G.S. §17b-261b, a copy of the application for spousal support was forwarded to the Department.
After notice and hearing, the probate court issued a decree ordering monthly spousal support to be paid to Paul. Less than one month after the probate court issued its decree, Marjorie applied to the Department for Medicaid assistance. The Department granted the application but ignored the probate court decree regarding the spousal support order.
On December 8, 2014, Paul and Ellen, in her capacity as conservator of estate and person for Marjorie, brought an appeal of the Department’s eligibility determination.
One of the Department’s arguments in support of its eligibility determination was that because it “is the sole agency to determine eligibility for assistance and services available under the Medicaid program, it has the sole right to determine what amount, if any, should be assigned as [the community spouse allowance].” Id. at 18. To this argument, the superior court, the Honorable Cesar Noble, in his Memorandum of Decision, stated the following:
The department's argument is essentially an assertion that because the department is the single state agency tasked with the administration of the Medicaid program, it is not bound by the statutes enacted by the Congress, the state legislature, or the rules it adopted for itself. This is an absurd and untenable position. The commissioner's stance would permit him to ignore the federal Medicaid statutory framework which he and the department are obliged to follow pursuant to General Statutes §17b-261, which requires the commissioner to administer the Medicaid program in accordance with the requirements of Title XIX which, in turn, explicitly require the CSA to be not less than an amount ordered by a court.
Valliere et al. v. Bremby, 2015 Conn. Super. LEXIS 2938, 18-19 (November 24, 2015).
Judge Noble, in his Memorandum of Decision, also stated the following:
The court concludes that pursuant to 42 U.S.C. §1396r-5(d)(5), relevant Connecticut statutes including General Statutes § 45a-655, as well as the commissioner’s own policy manual, the department is obliged to adopt a Probate Court order awarding a CSA where the order predates an institutionalized person’s application for Medicaid.
Id. at 28.
Following Judge Noble’s Decision, the Department appealed, raising the following three issues on appeal:
Whether the trial court committed reversible error by not acknowledging that the amount of a Medicaid-eligible institutionalized spouse's income that may be diverted towards the support of a community spouse instead of being applied towards the cost of care is limited and restrained by C.G.S. § 45a-655(d), notwithstanding any Probate Court order that may have entered pursuant to C.G.S. § 45a-655(b).
Whether the trial court committed reversible error by finding that the Department of Social Services was required to comply with an order of a Probate Court that, in effect, exceeded the Probate Court's subject matter jurisdiction by determining Medicaid eligibility and benefit amount, when determining Medicaid eligibility is reserved by statute to the Department of Social Services.
Whether the trial court committed reversible error by determining that the Department of Social Services was aggrieved by, and had standing to appeal from, a Probate Court decree that purports to order "spousal support" when the incompetent spouse had not yet applied for, and was not yet a recipient of, Title XIX medical assistance benefits as of the date of the Probate decree.
Whether the Court agrees with Judge Noble’s decision will, more than likely, be included in the next Article on developments in Elder Law.
Since 2012, there have been a number of changes that have significantly altered the landscape of elder law. Although this article has only summarized a portion of those changes, recent legislation and case-law reflects a growing awareness of issues relating to and affecting Connecticut’s elders. With this heightened awareness comes the natural conclusion that the practice of elder law, which oftentimes is conducted at the intersection of federal law and state law, is becoming more and more nuanced.
4 Czepiga Daly Pope & Perri represented Mrs. Lopes.
6 See Connecticut Uniform Policy Manual (UPM) §4030.47: “Any payments from an annuity are considered income. Additionally, the right to receive income from an annuity is regarded as an available asset, whether or not the annuity is assignable.”
7 These requirements are set forth in 42 U.S.C. §§ 1396p(c)(1)(F) and (G).
9 Gonzaga Univ. v. Doe, 536 U.S. 273, 284-285 (2002).
10 See Morenz v. Wilson-Coker, 415 F.3d 230, 237 (2d Cir. 2005)
11 See Kansas Health Care Ass’n, Inc. v. Kansas Dept. of Soc. & Rehab Svcs., 31 F.3d 1536, 1543 (10th Cir. 1994); Temple Univ. v. White, 941 F.2d 201, 215 (3d Cir. 1991); Cal. Med. Ass’n v. Douglas, 2012 U.S. Dist. LEXIS 2501, *20-21 (C.D. Cal. 2012); Community Pharmacies of Indiana, Inc. v. Indiana Family & Soc. Svcs. Admin., 801 F.Supp. 2d 801, 806 (S.D. Ind. 2011); Sorber v. Velez, 2009 U.S. Dist. LEXIS 98799, *10 (D.N.J. 2009); James v. Richman, 2006 U.S. Dist. LEXIS 28384, *13 (M.D. Pa. 2006).
12 See 42 U.S.C. § 1396r-5(b)(1).
13 Lopes v. Starkowski, 2010 U.S. Dist. LEXIS 81829 at *10.
14 Czepiga Daly Pope & Perri represents Ms. Simonsen.
15 Simonsen at *3, citing Doc. No. 23-2, at 7, 8-9.
16 See C.G.S. §17b-261(c), which provides that “If the terms of a trust provide for the support of an applicant, the refusal of a trustee to make a distribution from the trust does not render the trust an unavailable asset.”
17 If an individual transfers her assets for less than fair market value within sixty months prior to applying for Medicaid, a penalty period of ineligibility may be imposed. See 42 U.S.C. § 1296p(d)(1)(A).
18 42 U.S.C. §§ 1396a(a)(10)(C)(i)(III) and 1396a(r)(2).
19 See Miller v. Kresser, 34 So.3d 172, 175 (Fla. Dist. Ct. App. 2010).
20 U.P.M. §4030.80 (B) (2007).
21 See Connecticut Bank & Trust Co. v. Hurlbutt, 157 Conn. 315, 326, 254 A.2d 460, 467 (1968) and Bridgeport-City Trust Co. v. Beach, 119 Conn. 131, 141, 174 A. 308, 312 (1934).
22 The relevant trust distribution language in Pikula provides that “[t]he trustee shall pay to or spend on behalf of [the beneficiary] as much of the net income derived from this trust fund as the trustee may deem advisable to provide properly for [the beneficiary’s] maintenance and support and may incorporate any income not so distributed into the principal of the fund at the option of the trustee. I hereby authorize the trustee in his sole and absolute discretion at any time and from time to time to disburse from the principal for any of the trust estates created…even to the point of exhausting the same, such amount as he may deem advisable to provide adequately and properly for the support and maintenance of the current income beneficiaries thereof, any expenses incurred by reason of illness and disability. In determining the amount of principal to be so disbursed, the trustee shall take into consideration any other income or property which such income beneficiary may have from any other source, and the trustee’s discretion shall be conclusive as to the advisability of any such disbursement and the same shall not be questioned by anyone. For all sums so distributed, the trustee shall have full acquittance.” Id. at 274-275.
23 The trust distribution language in Corcoran, provided, in part, that the “trustees shall ‘hold, manage, invest and reinvest said share as a trust fund, paying to or expending for the benefit of [the plaintiff] so much of the net income and principal of said trust as the trustees, in their sole discretion, shall deem proper for her health, support in reasonable comfort, best interests an welfare.’” Id., at 276, quoting Corcoran, 271 Conn. 703.
24 A core tenet of Medicaid eligibility is whether an asset is available. Specifically, under General Statute § 17b-261, “an available asset is one that is actually available to the applicant or one that the applicant has the legal right, authority or power to obtain or to have applied for the applicant’s general support.”
25 In Zeoli, the trust language provided, in part, that “without in any way limiting the absolute discretion of my trustee, it is my fond hope that my trustee pay or apply the net income or principal of the trust for the maintenance, support, education, health and general welfare of my daughters…after considering the income of the beneficiaries from other sources.” Id. at 277, quoting Zeoli, 179 Conn. at 87 n.2.