Announcer: SJC-12922
JoEllen Guilfoyle, meet Mary Lou Sutter,
Secretary of the Executive office
of Health and Human Services.
-: Thank you.
Good morning counsel.
Counsel: Good morning.
-: We'll hear from Ms. Neeley first.
-: Thank you your honors.
May it please the court.
My name is Lisa Neeley and I represent the appellant,
JoEllen Guilfoyle in this matter.
This case is about Dorothy Frank,
who is now deceased being improperly denied eligibility
for MassHealth, longterm care benefits
because she owned a life estate and real property
titled in a nominee trust.
The decision of the hearing officer
with the MassHealth board of hearings,
which was affirmed by the superior court is wrong
because it failed to apply the correct law
with respect to the nature of real property interests
owned by beneficiaries of nominee trusts.
So too has MassHealth simply dismissed the relevance
of nominee trust law to this case in its papers.
However, the nature of the ownership interest
of beneficiaries of a nominee trust,
is the dispositive issue to be decided by this court.
Lowy: Ms. Neeley.
-: Go ahead Justice Lowy.
-: Ms. Neeley,
so I think MassHealth looks at this as a revocable trust.
I understand your position as the nominee trust.
-: Correct.
-: The issue is,
are there any circumstances under the trust
in which the Medicaid beneficiary
could be able to access the principle?
And the issue here is
perhaps confusing because there's five co-beneficiaries,
and your client has a life estate.
But any of the beneficiaries can revoke the trust.
Then if they revoke the trust,
they get whatever they had under the trust,
for your client that's a life estate.
But you've got the five children,
who have a remainder interest, right?
So what if it was just one child?
What if it was just one child?
And all that one child who now has that remainder interest
has to do, is say, "Okay, now I have this
"interest in this property,
"and I'm just gonna give it right back to mom."
It's not five of them, it's one.
Under that scenario, it's MassHealth right
that this really is a revocable trust,
where the Medicaid beneficiary could actually access
the trust property.
-: No, your honor,
that analysis is not correct.
And throughout its papers
and throughout the course of these proceedings,
both when the case was at the administrative level
and when it was at the superior court
is MassHealth flip flop between
calling this trusts an irrevocable trust or,
and a revocable trust.
And in reality, it is a nominee trust.
And that distinction is extremely critical
because nominate trust beneficiaries,
unlike beneficiary say in a typical
revocable or irrevocable trust,
own vested, real property interests.
Which is almost as if they just own it outright in a deed.
And that is essentially what they own.
Nominee trusts are mere title holding entities.
So, analyzing this case under the federal statutes,
any circumstances test is the wrong way to go about it-
-: Okay, so let's say it's a nominee trust.
And let's say that,
all that's going on is the trustee is the principal
for the beneficiary,
but there's, say there's two beneficiaries,
not five or six, all right.
So what is your client on?
A life estate, which is not available to MassHealth,
at least that's your position.
So then they get the life estate,
again, why couldn't if the other beneficiary is the
40 year old son, why can't they just give back
the property in the trust
to the Medicaid beneficiary?
-: Your honor, the MassHealth rules
considered transfers of assets
beyond a five year look back period non-countable.
So once Mrs. Frank deeded that property in trust
to the remainder beneficiaries,
it was out of her name for MassHealth purposes
after five years.
They were the owners immediately
from a real property perspective
and for MassHealth perspective,
there would be no impact on Mrs. Frank's eligibility.
If you look at the Hayne case,
and just to back up for a minute,
MassHealth does not consider assets gifted
outside of the five year look back countable
on the hypothetical scenario
that somebody that now owns those gifted assets
may decide to give them back to Mrs. Frank, for example.
And if you look back at the Hayne case,
which was argued in 2016 in the Massachusetts Appeals Court
in a decision authored by Judge Green,
he addressed this scenario with respect to
MassHealth argument at the time,
that assets distributed from a trust,
which again, in this case, it's different,
it's a nominee trust,
but assets gifted from an irrevocable trust
to individual children,
MassHealth essentially made the same argument
it's making here that those kids could one day say,
"Okay, well now I'm gonna decide to give it back to mom."
And what Judge Green determined in the Hayne decision was,
there'll be no legal obligation for them to do that.
There's forcing them to do it.
So therefore, MassHealth can't treat
this scenario countable under that,
hypothetical scenario because they're the owners.
They don't have to give it back.
After five years, it's gone from a MassHealth perspective
and what the beneficiaries of the children
decide to do with it is really up to them.
-: Just a question? -: Thank you.
If any question that this is a nominee trust?
-: No, you're on honor,
not from my perspective, that was never disputed,
MassHealth and it's papers, essentially, you know,
a nominee trust, it just says that
that matter is irrelevant to the outcome of this.
-: Okay.
So there's no question.
You're just saying it's not a matter of dispute
that as to whether or not this is a nominee trust?
-: From my perspective, no.
I believe what-
-: Not from your perspective,
I mean, I wanna know from the perspective of the case,
I mean, you'd be telling me that the other side
is contesting this or not?
-: In their papers, they haven't necessarily contested
that it's a nominee trust.
I went through in my papers
all the reasons why it is a nominee trust,
how it meets all of those classic nominee trust examples,
and what MassHealth does is just essentially say
in it's papers,
well, whether or not it's a nominee trust
is irrelevant to the analysis here.
And we're only gonna look at
and apply the MassHealth rules and regulations.
And that is what I'm saying is incorrect.
Is that I'll skip the step here
and what they should have done is looked at
what is a nominee trust unique-
-: 'Cause it's not a true trust, you're saying?
It's not true trust at all.
-: It's not a true trust.
-: True trust don't have
the obligations of a trustee of a trust, the true trust,
because they'd rather be the trustees,
they were the agents, aren't they?
-: Correct, your honor, that's-
-: Then that's been settled.
That's been settled law for a long time
about the nature of nominee trusts, doesn't it?
-: Centuries, essentially.
If you look at the Amicus brief, they trace cases back to,
I believe the 1800s where this has just settled law
in Massachusetts.
And you know, as recently as I believe last year,
the Massachusetts Appeals Court addressed
the nominee trust and determined that,
it's the beneficiary's whole interest in real property.
And it's a principal agency relationship.
And this is just settled. -: Yeah.
Okay, so if this is a nominee trust,
then it's not equivalent to a revocable trust.
The words revocable trust have no meaning
in this content, is that true?
-: That is correct, your honor.
Barbara: Yep, okay, thank you.
-: Justice Budd have a question?
-: No, that was along the lines of my question.
I just wanted to make sure I understood.
So nominee trusts are not either revocable or irrevocable?
That just is not,
that doesn't apply?
-: That is correct, your honor,
they are not true trust.
And this is, you know, settled law in Massachusetts.
It's a principal agency relationship.
The beneficiaries control the disposition.
They are the true owners of the property,
and they own real property interests.
It's as if they own it in a deed.
And it's a nominee trust is a pure title holding entity.
You know, they're established sometimes for privacy reasons,
you know, record title at the registry
and the beneficiaries listed on the schedule
are real owners.
-: So this is a way that anybody could get out of,
you know, having to use their own assets for
being taken care of.
They could just have MassHealth take care of them
as long as they put their property in a nominee trust?
-: No, your honor, that's not really accurate
because nominee trusts aren't,
they're very different than, you know,
say the trust that was analyzed by this court
in the Daley matter several years ago,
because that was an irrevocable trust
where a trustee are,
there was issues about whether there's discretion
to distribute principle, here that is not at play at all
because it's a nominee trust.
So the trustee has no power.
-: So the person would take all of their real property,
put it into a nominee trust,
and then it can't be reached by MassHealth?
-: It's essentially as if they made a transfer via a deed.
So you'd have to look beyond- -: It's five years.
Five year rule, right?
-: Yes, correct.
It's a five year rule.
So once you make that transfer,
you're ineligible for Medicaid benefits
for a period of five years.
And that is in the Medicaid statute.
And, it's been called,
I believe, you know, in the Hayne decision,
it was called a compromise that,
MassHealth allows,
based on the federal statute allows transfers.
But you're gonna be disqualified from benefits
for a period of five years.
And that is what occurred here.
And the schedule reflects that this,
the children became the remainder beneficiary owners,
joint tenants with rights of survivorship in 2001.
So by that calculation in 2006,
there should have been no issue with Medicaid eligibility
'cause the transfer penalty was met.
-: Why isn't it true then,
that anybody can take any real property that they own,
put it into a nominee trust, wait five years
and then that can't be reached by MassHealth?
-: It's an accurate statement to say that
anybody who owns property
can decide to transfer that property
to another person, wait the five years
and apply for benefits.
It is a risk in doing that
because you are transferring property.
I guess it's not dissimilar from other areas of the law,
like a state tax planning where individuals
gift away assets as well.
And it really is a compromise between
what Congress has decided as an acceptable look back period
of five years-
-: Isn't this even more complicated though,
because it's not a complete transfer,
she retains a life estate.
And I'm nervous about the life estate because,
Hayne doesn't decided it,
Daley doesn't decide the life estate issue.
And I can't tell whether it's back in this case or not.
Because it's not just like she gave away her property.
She's retained full benefit of the property
for her lifetime.
-: But she's retained a life estate interest.
And arguably, that would be the only
portion that could presumably be countable
under the MassHealth rules.
But MassHealth has a very definitive set of rules
on how they count life estates.
-: I'm gonna ask Mr. Furgang that,
cause it seems like they're backing away from,
I don't quite understand why a life estate
isn't significant.
I know we keep ducking the issue in our cases, Hayne,
has the Supreme, US Supreme Court settled life estate?
Does it matter?
'Cause in Daley and in Hayne, this issue was ducked.
And seems like it's fairly significant that you,
not only get to transfer your house to your beneficiaries,
but you get to keep the house too, during your lifetime.
I just don't know what has actually been transferred here.
-: Well, the remainder value has been transferred
and I believe that this is,
it is settled law,
and Daley, essentially the agency raised the argument,
that the retention of a life estate
made the entire corporate-
-: No, I read the footnote in Daley.
We don't decide it.
We rely on a concession sort of,
and then Hayne doesn't decide it either.
It also relies on a concession.
But I can't tell whether that concession's been withdrawn
or not?
-: You didn't decide,
you did not decide the specific issue of how a retention,
how a life of state impacts eligibility.
And for that, you have to look at their regulations
of how they value a life estate.
And in the footnote of my papers,
I propose a hypothetical calculation based on Mrs. Frank's
life expectancy at the time
in accordance with the tables
and the remainder value of the property,
which is clearly no longer hers,
is that the life estate had a value of about $10,000.
So if the property was sold,
that 10,000 would have to be paid, say to the nursing home,
I would make her ineligible if she kept it,
potentially the agency also has a lien against it,
which was discussed.
So the retention of a life estate however,
doesn't make the whole underlying value of
whatever was transferred accountable,
does not draw it back in.
-: Counsel, do you agree that the Uniform Trust Code,
the Mass Uniform Trust Code does not apply here?
-: I agree,
and I cited to,
because it is a nominee trust that I'm UTC,
essentially defines or carves out a specific,
it talks about how a nominee trust is a mere
title holding entity.
So I didn't focus on the Mass Uniform Trust Code
in my papers just because,
my position is that this is a nominee trust
and it doesn't,
it is not a revocable or an irrevocable trust.
-: And if you do look at the,
when you do look at that code, though,
it defines the revocable trust is one
that's revocable by the settler without the consent
of the trustee.
So could we look to the Uniform Trust Code
to just define what revocable and irrevocable trusts are,
without relationship to the nominee trust?
-: Yes, you could look at the Uniform Trust Code
to the extent it defines revocable and irrevocable
and I believe what it says with respect to revocable
is without the consent of the trustee
or an adverse-
-: Or an adverse interest, that's right,
an adverse interest, great.
Okay, thank you.
-: Those definitions are controlling.
-: Can you address the actual language that they,
the come hosts were lying on?
Which is decisions made and actions taken here under,
including without limitation amendment of this trust,
shall be made or taken as the case may be
by any of the beneficiaries.
So why is that not make this irrevocable trust?
That particular language?
-: Again, because it is a nominee trust,
it is not a revocable trust.
It is a principal agency relationship.
And with respect to that provision,
there's also another article, article six,
which discusses how any amendments to the declaration
need to be made by all beneficiaries.
And that for my position is the operational article here.
And arguably this only speaks to the ability to amend,
the quote unquote nominee trust.
You know, again,
the interests are vested property interests.
They own interest in real property that are vested,
that no single beneficiary can take away
from another beneficiary.
-: Can I ask a question?
Can they value
the life through major interests that she had?
And impose a monetary value on that?
You can retain the life interest in the property, right?
-: She retained a life estate in trust.
-: Does that have a market value?
-: I don't know if it would have a fair market value,
but under the social security tables,
and how MassHealth looks at a value
of a life estate interest,
I valued it as about $10,000,
just based on my calculations of how MassHealth values-
-: So could they in fact get that?
-: She does have a life estate interest.
And that is potentially the only asset
that could be countable,
not the whole thing.
If property say was sold during her, she's now deceased,
but if it had been sold during her lifetime
and she was on MassHealth,
that would go back to her, and it would be countable
until she spent it down, for example,
on her nursing home care.
And all of these rules are spelled out
in the MassHealth regulations.
-: Any further questions?
Thank you, Ms. Neeley.
Mr. Furgang.
-: Morning your honor, may it please the court.
The issue in this case is whether the Frank family trusts
assets accountable for purposes of Medicaid eligibility.
-: What makes you think it's a trust?
What makes you think it's a trust?
-: Well, your honor, first of all,
the definition under the federal statute determines whether
it's considered to be a trust for accountability-
-: Do you think it's making any difference
what our rules are in Massachusetts about nominee trusts?
-: Your honor, everything's determined by the language
of the document itself.
And this is not a trust issue per say,
under Massachusetts law.
This is a Medicaid eligibility-
-: Well let's get your definition of what the issue is.
I'm saying to you,
that I think it matters what the vehicle is,
in terms of what kind of interests she has,
under Massachusetts law,
and Massachusetts law, the nominee trust
is not a true trust.
Isn't that true?
-: No, your honor.
-: Is that true? That is not true?
-: No, it is not true your honor,
a nominee trust is a trust like vehicle-
-: It is not, it is not,
it's not what our law says,
it is never what our law has said about nominee trust.
Nominee trusts are not true trust,
that has been clear for years.
-: Well, your honor, I refer again to the cases where
it is treated in some way,
this court has stated that in some circumstances
it is treated as a trust,
and in some circumstances it is not.
And in this case, we have to look to the federal statute
to determine how it should be treated.
-: But Counsel, the case law and the federal side says
that we look the federal law,
federal judges or courts like the bankruptcy court,
or whoever are going to look at Massachusetts law
to see what a nominee trust is.
What's the definition of it?
What does it mean?
So we go back to our law again,
even if you apply the statute,
even if you apply the federal statutes.
-: Well, I don't see federal saying that
with respect to this particular issue
under the Medicaid eligibility.
Under the federal law,
it says that a trust is any legal instrument or device
that is similar to a trust.
It need not be a trust in the form
that is traditionally accepted, as long as it-
-: What would make this similar to a trust counsel?
What would make this similar to a trust?
-: The fact that the trustee by the,
well, first of all,
under any examination of a property document,
you look at the terms of the document
and the terms of this document in this case,
say on the one hand, it is a nominee trust.
On the other hand, it says the property is held
by a trustee for the benefit of the beneficiaries.
It says that the document, that the trust property,
the trust document itself, maybe amended by-
-: Well now there's two parts in that trust document
you were referring to.
One requires the amendment of all the beneficiaries,
but another part you were pointing to,
I think it was section three, just talked about amendments.
Can you explain to me what that language means to you
in section three?
-: In a way, well, just first of all,
I would say that it doesn't matter
which of these two provisions-
-: Well, I read very differently.
One seemed very explicit section forcing very explicit,
or whether it's four or five, I don't remember.
But section three, is the language was a bit different.
Well I think it does matter.
-: A section of this deed
described the powers of the beneficiaries,
and basically said that several specific actions,
may be conducted by any beneficiary.
And one of those actions included amendment of the trust.
Section six, dealt with amendment per say.
And there, it talked about amendment of the deed of trust,
which has to be conducted only with the consent,
written consent of all the beneficiaries.
And what we are arguing is again,
looking at the document and the language of the document.
It doesn't matter which of those two could apply
in any particular circumstance.
The end result is that unlike in a standard nominee trust,
where the property is considered deeded in effect
to the beneficiaries,
here, the document itself anticipates situations
where the beneficial ownership will change
within the context of the trust itself.
-: Well, isn't the point that at the moment
it was executed and illegally,
the beneficiaries had a vested interest.
They had a vested interest at that point,
the other five beneficiaries, right?
-: For certain instances-
-: Was either vested or it isn't?
-: They are treated as having vested interest.
But from the point of view of the Medicaid statute,
it doesn't care about whether or not it has a best interest
or not, because it explicitly says in the statute
that the provisions apply,
regardless of the purpose of the trust,
which in this case is to,
give some kind of a vested interest to the beneficiaries.
And regardless of whether the trustee can exercise
any discretion.
And the key element of normally of a nominee trust,
is that unlike the normal trust that we deal with,
the trustee is empowered with the right to,
with a certain degree of discretion.
Here, main characteristic of a nominee trust
is that the trustee has no discretion and always-
-: Tell me what discretion this plaintiff has,
or this person has here?
-: There's no question that the trustee
does not have any discretion.
I can see that your honor, but again,
the Medicaid statute applies
even if the trustee has no discretion.
That is explicit and in fact, that is a significant change
in the provisions from the pre 1993 version.
In earlier cases that where they were construing
a Medicaid coverage, they jumped with a pre 1993 version,
and a key element of those decisions
was whether or not a trustee was able to exercise its
discretion, exercise discretion,
to transmit funds to the beneficiary.
And if he could, then it was countable.
-: If I could jump in for a moment, and I ask,
so any of the beneficiaries under this trust,
can revoke the trust including the appellant.
But if the trust is terminated,
then they can terminate the trust,
any one of the beneficiaries.
If the trust is terminated,
then all that the appellant has
is a life estate.
And it's just as Cafco said,
well, that's another case perhaps,
well in this case,
what we value the life estate to be.
But all she has under the trust is a life estate.
For her to have anything beyond that life estate,
there has to be another transaction beyond the trust,
which is if the beneficiaries gift,
the remainder back to her.
But within the four corners of the trust,
all she owns is a life estate.
So all you have access to,
if at all with your regulations is the life estate.
-: I respectfully disagree your honor.
Under the language of, for two reasons;
firstly, under the language
of the termination provision itself,
any individual beneficiary may terminate the trust.
-: Just as I said.
-: There are two possible consequences.
One consequence is, as you said,
that the property is distributed
to each of the beneficiaries, as they set out,
as a share is set out in the schedule.
The other potential alternative consequence,
is that the beneficiaries
may otherwise direct the distribution of the property.
So as in the termination of the trust,
the beneficiaries can direct,
that the property be distributed to the grantor.
That is completely allowable
under the terms of the termination provision.
Secondly, even apart from the termination provision
as I've inverted to-
-: But wouldn't that be a gift?
Doesn't that then fall into this category that
the beneficiaries are doing this
out of the goodness of their heart,
not out of any obligation.
So it's like the gift that we've said is not the same?
That's where I get confused.
I get your argument that they can terminate the trust
and convert it into a life estate and remain dormant.
But I don't understand how the beneficiaries
give her back the whole house
unless they do it out of the goodness of their heart,
'cause they have no legal obligation to do that.
So is it becoming a gift?
-: No, your honor, because even under the earlier cases,
like the LeBow case, for example,
there are many instances where a beneficiary,
can give up their entitlement to the trust proceeds
for the benefit
of the grantor without having-
-: How is it that's not a gift?
You don't have to give it over.
Why is that not a gift?
-: Because it's done,
well in LeBow, this court held that was not a gift.
The beneficiary can in fact,
give back part of their beneficiary entitlement
to the grantor, it countable.
As long as it is done within the confines of the trust,
it is not considered a gift
because as long as it is within the confines of the trust,
both under the federal statute
and under the LeBow case, for example,
it is still trust property,
and therefore it is countable.
-: Go ahead, I'm sorry.
No go ahead Justice Lowy, go ahead.
-: But in LeBow,
the trustee had the discretion
to provide assets to the beneficiary,
and the corpus, the entire corpus
could go to the beneficiary
at the discretion of the trustee.
That is completely different
than this situation.
So I'm really confused how LeBow helps you.
-: Well LeBow helps for two reasons your honor,
first of all, in LeBow,
the court said that the right to amend first of all,
was vested in a beneficiary.
And it wasn't specified whether
that why two men was granted as a trustee or a beneficiary.
And it was immaterial to the court's decision.
All that mattered was that the beneficiary
had the right to amend the trust,
so that the trustee could then give the property over
to the beneficiary.
And as I said, at that point,
the fact that the trustee could do that mattered
because the pre 1993 statute
required that there be some discretion
vested in the trustee to transfer property.
But post 1993,
the federal statute eliminated that requirement
for accountability.
Now, the trustee can zero discretion
as in a nominee trust,
and yet still the assets must be countered
if there's any circumstance
in which the property can be given back to the grantor.
And those-
-: I guess if I could distill,
if I could distill my problem, because I mean,
maybe you're right, I mean,
other taxpayers don't wanna pay for
people who can afford it to, you know,
to have this care, be a nursing homes.
That's not fair for other taxpayers to pay if they can,
they have the money to afford it.
So I understand.
But here's my problem.
My problem is it takes a transaction,
be on the trust,
to get that property,
real property, not life estate,
into the hands of the
Medicaid recipient.
And that's in a nutshell my problem,
is it takes another transaction beyond the trust.
-: Your honor, I don't believe that is,
that is the case here, under the any circumstances test,
one of the circumstances that could occur
within the confines of the trust,
is that the trust could be amended by the beneficiaries,
and in that amendment,
they change the schedule of beneficiaries,
that as the sole beneficiary is the grantor.
Therefore, within the confines of the trust,
the grantor assumes complete ownership of the property.
And in fact, the trust document itself
anticipates that kind of an action,
under section three, paragraph three,
the trust anticipates a situation where both the legal
and equitable title of the property,
mergers when it is held by a single individual.
So the trust both allows for an amendment
of its own provisions and anticipates
that that amendment will lead to
a single individual beneficiary
having complete title to the property.
That is a case that Medicaid insist means
that the trust should be countered,
because there is a circumstance
where the entire corpus of the trust
could be returned to the grantor.
And that takes place within the confines and the provisions
of the trust itself.
(mumbles)
-: This send over could be means,
I mean, in that analysis could be,
is completely dependent on the goodwill
and the beneficial interests
of the other children, saying, "Oh, mom, take it back."
Yeah, I mean, you cannot make them take,
you cannot make them do that.
You cannot make them do that.
But so it could be, it's only if they want to,
if they out of the goodness of their heart, want to.
-: Absolutely.
-: Very slenderly, very slenderly, very slenderly.
-: Absolutely, and of course the courts are full of cases
where assets accountable,
even if there is no compulsion for any action,
any circumstance test means exactly what it says.
If a beneficiary out of the goodness of their heart,
wants to help out their family,
and give up their-
-: How does that help out the family?
It helps the rest of us,
it doesn't help out the family.
-: Well, the courts also,
the reason why the accountability statute exists
is because of the recognition by the Federal Government.
And this court has repeatedly acknowledged that recognition
that is created as a way,
for the family, together,
to sequester assets for the benefit of either
the grantor or themselves as heirs.
That is what, It's a shielding device, in effect
that either the mother gets it or they get it,
but Medicaid does not get it.
-: What about another kind of beneficiary?
Could a creditor reach and get that?
-: I don't, your honor.
And frankly, the Medicaid statute is unconcerned with that.
As LeBow said,
issue of access to creditors or other purposes,
is immaterial to the Medicaid statute.
The statute looks simply at the language
of the trust vehicle,
and sees whether under each terms,
there is any circumstance in which
the property could revert back to the grantor.
And the fact that under other circumstances,
that probably could be considered vested, is immaterial.
And LeBow specifically says that.
And indeed, in the Cohen case also,
it noted that the trust may considered,
the trust may be interpreted in one way,
under probate law for Massachusetts
and in other way under the Medicaid statute,
because they serve different purposes.
This is not an effort to change Massachusetts
press law your honor.
This is not an effort to change the relationship
between the beneficiaries, the property,
and other parties for other reasons.
This is only for the purpose of determining,
whether an individual has access to Medicaid benefits
or not.
And so as we look at this document-
-: Mr. Furgang, can I ask a quick question?
Has MassHealth changed its views on life estates?
'Cause at one point they were conceding
that a life estate doesn't count.
But it seems vaguer in this case than it has in the past.
Is there a change in position out there?
Or do we ignore this life estate issue?
-: I think they have not made a pronouncement on that yet,
but certainly the Hayne and Daley cases,
have opened the door for them to go back
and look at that issue again,
because under those decisions, it would appear that
the value of a life estate would be countable.
But again, that's not the issue in this case itself.
It may certainly come up again,
but here, the issue is more about,
do we apply the Stevie,
the language of the Medicaid statute or not?
And frankly we have no choice,
because that's what the law is.
And the law is that,
the federal government statute,
is agnostic at best,
about whether or not this is labeled as a nominee trust
or any other kinds of trust?
All it cares about,
is what the language of the trust permits.
And hear the language of the trust,
permits the property under some circumstances-
-: Doesn't mean it's a trust at all.
You keep saying it, assuming it's the trust.
You keep assuming that this is a trust.
And I'm telling you it is not a trust.
-: No, your honor.
I'm assuming that it's a trust under the definition
of the Medicaid statute.
Under the Medicaid statute,
any legal instrument or device that is similar to a trust,
not even a trust.
And here- -: Similar to a trust.
How is it similar to a trust?
Because it's called a trust?
-: Because under the terms of the document,
a trustee holds the property for the beneficiary.
-: A trustee is an agent in Massachusetts Law.
it's not a trustee, it's not a true trustee either.
Under Massachusetts law, it's not a true trustee either.
-: Your honor, for certain purposes, that is correct.
But in this case, the plaintiffs made a decision.
They could have,
the grantor could have deeded her property,
free of any trust to her relatives
and retain a life estate.
And she chose not to do that.
She chose instead to create a nominee trust
and take the consequences of that.
And there are consequences that are both positive
and negative.
We don't know what the reasons are
for why she chose that methodology,
but the fact that she chose to create a nominee trust,
put it into the ambit of the Medicaid statute under 1396 PD.
And both the Massachusetts regulation that applies to that.
And the federal statute itself saying,
even if this document is not in all ways a trust,
what they did here,
was an effort should be looked at
to see if it was an effort to shield the assets
from being reached by Medicaid.
And you look at it to see does it have
the characteristics of a document that looks like a trust,
even if it isn't really a trust under certain circumstances.
And I defy anyone who's familiar with the law of trust
to read that document and not tell me it looks like a trust.
It is called a trust.
It has a trustee.
The trustee holds the property,
which is exactly what trustees are supposed to do.
It has beneficiaries of the trust.
It has the right to be amended
so that the properties of the truth can change
in any number of ways.
So for all those reasons, it is treated as a trust,
only for the purpose of counting the assets for Medicaid.
It may not be treated as a trust under Massachusetts law,
for purposes of liability,
for purposes of transfer of ownership,
for purposes of taxes.
There are all kinds of circumstances
under which it will not be treated as a trust.
But for purposes of counting assets
for Medicaid eligibility, it is treated as a trust.
That is what the statute clearly says.
And we have to go by the language of the statute,
which was indeed designed and amended
to encompass these kinds of instruments.
Where there are efforts to shield property
from Medicaid while giving the benefit to the families.
That's what's happening here.
And Medicaid-
-: Thank you, Mr. Furgang.
Do we have any further questions?
-: No.
-: All right, thank you counsel.