WEBVTT
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SJC-12922
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JoEllen Guilfoyle, meet Mary Lou Sutter,
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Secretary of the Executive office
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of Health and Human Services.
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Thank you.
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Good morning counsel.
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Good morning.
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We'll hear from Ms. Neeley first.
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Thank you your honors.
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May it please the court.
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My name is Lisa Neeley and I represent the appellant,
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JoEllen Guilfoyle in this matter.
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This case is about Dorothy Frank,
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who is now deceased being improperly denied eligibility
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for MassHealth, longterm care benefits
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because she owned a life estate and real property
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titled in a nominee trust.
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The decision of the hearing officer
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with the MassHealth board of hearings,
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which was affirmed by the superior court is wrong
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because it failed to apply the correct law
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with respect to the nature of real property interests
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owned by beneficiaries of nominee trusts.
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So too has MassHealth simply dismissed the relevance
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of nominee trust law to this case in its papers.
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However, the nature of the ownership interest
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of beneficiaries of a nominee trust,
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is the dispositive issue to be decided by this court.
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Ms. Neeley.
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Go ahead Justice Lowy.
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Ms. Neeley,
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so I think MassHealth looks at this as a revocable trust.
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I understand your position as the nominee trust.
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Correct.
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The issue is,
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are there any circumstances under the trust
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in which the Medicaid beneficiary
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could be able to access the principle?
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And the issue here is
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perhaps confusing because there's five co-beneficiaries,
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and your client has a life estate.
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But any of the beneficiaries can revoke the trust.
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Then if they revoke the trust,
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they get whatever they had under the trust,
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for your client that's a life estate.
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But you've got the five children,
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who have a remainder interest, right?
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So what if it was just one child?
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What if it was just one child?
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And all that one child who now has that remainder interest
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has to do, is say, "Okay, now I have this
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"interest in this property,
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"and I'm just gonna give it right back to mom."
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It's not five of them, it's one.
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Under that scenario, it's MassHealth right
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that this really is a revocable trust,
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where the Medicaid beneficiary could actually access
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the trust property.
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No, your honor,
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that analysis is not correct.
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And throughout its papers
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and throughout the course of these proceedings,
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both when the case was at the administrative level
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and when it was at the superior court
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is MassHealth flip flop between
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calling this trusts an irrevocable trust or,
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and a revocable trust.
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And in reality, it is a nominee trust.
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And that distinction is extremely critical
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because nominate trust beneficiaries,
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unlike beneficiary say in a typical
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revocable or irrevocable trust,
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own vested, real property interests.
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Which is almost as if they just own it outright in a deed.
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And that is essentially what they own.
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Nominee trusts are mere title holding entities.
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So, analyzing this case under the federal statutes,
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any circumstances test is the wrong way to go about it-
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Okay, so let's say it's a nominee trust.
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And let's say that,
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all that's going on is the trustee is the principal
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for the beneficiary,
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but there's, say there's two beneficiaries,
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not five or six, all right.
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So what is your client on?
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A life estate, which is not available to MassHealth,
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at least that's your position.
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So then they get the life estate,
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again, why couldn't if the other beneficiary is the
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40 year old son, why can't they just give back
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the property in the trust
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to the Medicaid beneficiary?
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Your honor, the MassHealth rules
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considered transfers of assets
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beyond a five year look back period non-countable.
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So once Mrs. Frank deeded that property in trust
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to the remainder beneficiaries,
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it was out of her name for MassHealth purposes
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after five years.
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They were the owners immediately
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from a real property perspective
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and for MassHealth perspective,
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there would be no impact on Mrs. Frank's eligibility.
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If you look at the Hayne case,
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and just to back up for a minute,
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MassHealth does not consider assets gifted
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outside of the five year look back countable
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on the hypothetical scenario
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that somebody that now owns those gifted assets
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may decide to give them back to Mrs. Frank, for example.
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And if you look back at the Hayne case,
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which was argued in 2016 in the Massachusetts Appeals Court
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in a decision authored by Judge Green,
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he addressed this scenario with respect to
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MassHealth argument at the time,
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that assets distributed from a trust,
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which again, in this case, it's different,
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it's a nominee trust,
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but assets gifted from an irrevocable trust
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to individual children,
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MassHealth essentially made the same argument
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it's making here that those kids could one day say,
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"Okay, well now I'm gonna decide to give it back to mom."
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And what Judge Green determined in the Hayne decision was,
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there'll be no legal obligation for them to do that.
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There's forcing them to do it.
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So therefore, MassHealth can't treat
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this scenario countable under that,
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hypothetical scenario because they're the owners.
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They don't have to give it back.
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After five years, it's gone from a MassHealth perspective
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and what the beneficiaries of the children
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decide to do with it is really up to them.
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Just a question?
Thank you.
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If any question that this is a nominee trust?
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No, you're on honor,
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not from my perspective, that was never disputed,
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MassHealth and it's papers, essentially, you know,
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a nominee trust, it just says that
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that matter is irrelevant to the outcome of this.
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Okay.
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So there's no question.
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You're just saying it's not a matter of dispute
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that as to whether or not this is a nominee trust?
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From my perspective, no.
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I believe what-
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Not from your perspective,
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I mean, I wanna know from the perspective of the case,
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I mean, you'd be telling me that the other side
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is contesting this or not?
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In their papers, they haven't necessarily contested
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that it's a nominee trust.
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I went through in my papers
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all the reasons why it is a nominee trust,
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how it meets all of those classic nominee trust examples,
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and what MassHealth does is just essentially say
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in it's papers,
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well, whether or not it's a nominee trust
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is irrelevant to the analysis here.
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And we're only gonna look at
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and apply the MassHealth rules and regulations.
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And that is what I'm saying is incorrect.
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Is that I'll skip the step here
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and what they should have done is looked at
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what is a nominee trust unique-
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'Cause it's not a true trust, you're saying?
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It's not true trust at all.
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It's not a true trust.
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True trust don't have
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the obligations of a trustee of a trust, the true trust,
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because they'd rather be the trustees,
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they were the agents, aren't they?
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Correct, your honor, that's-
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Then that's been settled.
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That's been settled law for a long time
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about the nature of nominee trusts, doesn't it?
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Centuries, essentially.
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If you look at the Amicus brief, they trace cases back to,
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I believe the 1800s where this has just settled law
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in Massachusetts.
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And you know, as recently as I believe last year,
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the Massachusetts Appeals Court addressed
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the nominee trust and determined that,
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it's the beneficiary's whole interest in real property.
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And it's a principal agency relationship.
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And this is just settled.
Yeah.
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Okay, so if this is a nominee trust,
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then it's not equivalent to a revocable trust.
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The words revocable trust have no meaning
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in this content, is that true?
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That is correct, your honor.
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Yep, okay, thank you.
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Justice Budd have a question?
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No, that was along the lines of my question.
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I just wanted to make sure I understood.
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So nominee trusts are not either revocable or irrevocable?
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That just is not,
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that doesn't apply?
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That is correct, your honor,
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they are not true trust.
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And this is, you know, settled law in Massachusetts.
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It's a principal agency relationship.
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The beneficiaries control the disposition.
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They are the true owners of the property,
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and they own real property interests.
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It's as if they own it in a deed.
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And it's a nominee trust is a pure title holding entity.
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You know, they're established sometimes for privacy reasons,
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you know, record title at the registry
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and the beneficiaries listed on the schedule
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are real owners.
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So this is a way that anybody could get out of,
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you know, having to use their own assets for
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being taken care of.
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They could just have MassHealth take care of them
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as long as they put their property in a nominee trust?
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No, your honor, that's not really accurate
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because nominee trusts aren't,
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they're very different than, you know,
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say the trust that was analyzed by this court
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in the Daley matter several years ago,
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because that was an irrevocable trust
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where a trustee are,
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there was issues about whether there's discretion
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to distribute principle, here that is not at play at all
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because it's a nominee trust.
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So the trustee has no power.
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So the person would take all of their real property,
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put it into a nominee trust,
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and then it can't be reached by MassHealth?
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It's essentially as if they made a transfer via a deed.
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So you'd have to look beyond-
It's five years.
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Five year rule, right?
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Yes, correct.
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It's a five year rule.
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So once you make that transfer,
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you're ineligible for Medicaid benefits
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for a period of five years.
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And that is in the Medicaid statute.
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And, it's been called,
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I believe, you know, in the Hayne decision,
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it was called a compromise that,
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MassHealth allows,
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based on the federal statute allows transfers.
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But you're gonna be disqualified from benefits
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for a period of five years.
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And that is what occurred here.
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And the schedule reflects that this,
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the children became the remainder beneficiary owners,
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joint tenants with rights of survivorship in 2001.
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So by that calculation in 2006,
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there should have been no issue with Medicaid eligibility
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'cause the transfer penalty was met.
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Why isn't it true then,
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that anybody can take any real property that they own,
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put it into a nominee trust, wait five years
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and then that can't be reached by MassHealth?
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It's an accurate statement to say that
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anybody who owns property
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can decide to transfer that property
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to another person, wait the five years
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and apply for benefits.
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It is a risk in doing that
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because you are transferring property.
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I guess it's not dissimilar from other areas of the law,
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like a state tax planning where individuals
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gift away assets as well.
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And it really is a compromise between
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what Congress has decided as an acceptable look back period
270
00:11:57.970 --> 00:11:59.301
of five years-
271
00:11:59.301 --> 00:12:02.540
Isn't this even more complicated though,
272
00:12:02.540 --> 00:12:04.770
because it's not a complete transfer,
273
00:12:04.770 --> 00:12:07.481
she retains a life estate.
274
00:12:07.481 --> 00:12:11.800
And I'm nervous about the life estate because,
275
00:12:11.800 --> 00:12:13.270
Hayne doesn't decided it,
276
00:12:13.270 --> 00:12:16.460
Daley doesn't decide the life estate issue.
277
00:12:16.460 --> 00:12:19.840
And I can't tell whether it's back in this case or not.
278
00:12:19.840 --> 00:12:23.710
Because it's not just like she gave away her property.
279
00:12:23.710 --> 00:12:26.190
She's retained full benefit of the property
280
00:12:26.190 --> 00:12:27.453
for her lifetime.
281
00:12:28.420 --> 00:12:31.360
But she's retained a life estate interest.
282
00:12:31.360 --> 00:12:34.710
And arguably, that would be the only
283
00:12:34.710 --> 00:12:38.520
portion that could presumably be countable
284
00:12:38.520 --> 00:12:39.930
under the MassHealth rules.
285
00:12:39.930 --> 00:12:43.920
But MassHealth has a very definitive set of rules
286
00:12:43.920 --> 00:12:45.953
on how they count life estates.
287
00:12:45.953 --> 00:12:48.980
I'm gonna ask Mr. Furgang that,
288
00:12:48.980 --> 00:12:51.653
cause it seems like they're backing away from,
289
00:12:52.830 --> 00:12:55.310
I don't quite understand why a life estate
290
00:12:55.310 --> 00:12:58.150
isn't significant.
291
00:12:58.150 --> 00:13:01.440
I know we keep ducking the issue in our cases, Hayne,
292
00:13:01.440 --> 00:13:04.973
has the Supreme, US Supreme Court settled life estate?
293
00:13:04.973 --> 00:13:06.750
Does it matter?
294
00:13:06.750 --> 00:13:10.693
'Cause in Daley and in Hayne, this issue was ducked.
295
00:13:12.150 --> 00:13:14.880
And seems like it's fairly significant that you,
296
00:13:14.880 --> 00:13:17.835
not only get to transfer your house to your beneficiaries,
297
00:13:17.835 --> 00:13:22.280
but you get to keep the house too, during your lifetime.
298
00:13:22.280 --> 00:13:25.050
I just don't know what has actually been transferred here.
299
00:13:25.050 --> 00:13:27.570
Well, the remainder value has been transferred
300
00:13:27.570 --> 00:13:29.240
and I believe that this is,
301
00:13:29.240 --> 00:13:30.217
it is settled law,
302
00:13:30.217 --> 00:13:34.140
and Daley, essentially the agency raised the argument,
303
00:13:34.140 --> 00:13:36.080
that the retention of a life estate
304
00:13:36.080 --> 00:13:38.100
made the entire corporate-
305
00:13:38.100 --> 00:13:40.670
No, I read the footnote in Daley.
306
00:13:40.670 --> 00:13:42.953
We don't decide it.
307
00:13:42.953 --> 00:13:46.560
We rely on a concession sort of,
308
00:13:46.560 --> 00:13:49.270
and then Hayne doesn't decide it either.
309
00:13:49.270 --> 00:13:51.880
It also relies on a concession.
310
00:13:51.880 --> 00:13:54.900
But I can't tell whether that concession's been withdrawn
311
00:13:54.900 --> 00:13:56.130
or not?
312
00:13:56.130 --> 00:13:57.440
You didn't decide,
313
00:13:57.440 --> 00:14:01.410
you did not decide the specific issue of how a retention,
314
00:14:01.410 --> 00:14:03.790
how a life of state impacts eligibility.
315
00:14:03.790 --> 00:14:07.030
And for that, you have to look at their regulations
316
00:14:07.030 --> 00:14:09.030
of how they value a life estate.
317
00:14:09.030 --> 00:14:11.990
And in the footnote of my papers,
318
00:14:11.990 --> 00:14:16.490
I propose a hypothetical calculation based on Mrs. Frank's
319
00:14:16.490 --> 00:14:18.110
life expectancy at the time
320
00:14:18.110 --> 00:14:19.960
in accordance with the tables
321
00:14:19.960 --> 00:14:21.960
and the remainder value of the property,
322
00:14:21.960 --> 00:14:24.490
which is clearly no longer hers,
323
00:14:24.490 --> 00:14:27.880
is that the life estate had a value of about $10,000.
324
00:14:27.880 --> 00:14:29.935
So if the property was sold,
325
00:14:29.935 --> 00:14:34.080
that 10,000 would have to be paid, say to the nursing home,
326
00:14:34.080 --> 00:14:36.980
I would make her ineligible if she kept it,
327
00:14:36.980 --> 00:14:40.070
potentially the agency also has a lien against it,
328
00:14:40.070 --> 00:14:41.850
which was discussed.
329
00:14:41.850 --> 00:14:44.520
So the retention of a life estate however,
330
00:14:44.520 --> 00:14:47.690
doesn't make the whole underlying value of
331
00:14:47.690 --> 00:14:49.320
whatever was transferred accountable,
332
00:14:49.320 --> 00:14:51.370
does not draw it back in.
333
00:14:51.370 --> 00:14:54.850
Counsel, do you agree that the Uniform Trust Code,
334
00:14:54.850 --> 00:14:57.403
the Mass Uniform Trust Code does not apply here?
335
00:14:58.970 --> 00:15:00.490
I agree,
336
00:15:00.490 --> 00:15:04.010
and I cited to,
337
00:15:04.010 --> 00:15:07.310
because it is a nominee trust that I'm UTC,
338
00:15:07.310 --> 00:15:10.410
essentially defines or carves out a specific,
339
00:15:10.410 --> 00:15:12.610
it talks about how a nominee trust is a mere
340
00:15:12.610 --> 00:15:14.810
title holding entity.
341
00:15:14.810 --> 00:15:19.160
So I didn't focus on the Mass Uniform Trust Code
342
00:15:19.160 --> 00:15:20.970
in my papers just because,
343
00:15:20.970 --> 00:15:24.020
my position is that this is a nominee trust
344
00:15:24.020 --> 00:15:24.853
and it doesn't,
345
00:15:24.853 --> 00:15:28.145
it is not a revocable or an irrevocable trust.
346
00:15:28.145 --> 00:15:30.370
And if you do look at the,
347
00:15:30.370 --> 00:15:32.520
when you do look at that code, though,
348
00:15:32.520 --> 00:15:35.830
it defines the revocable trust is one
349
00:15:35.830 --> 00:15:38.470
that's revocable by the settler without the consent
350
00:15:38.470 --> 00:15:40.040
of the trustee.
351
00:15:40.040 --> 00:15:43.750
So could we look to the Uniform Trust Code
352
00:15:43.750 --> 00:15:47.810
to just define what revocable and irrevocable trusts are,
353
00:15:47.810 --> 00:15:50.423
without relationship to the nominee trust?
354
00:15:51.410 --> 00:15:53.690
Yes, you could look at the Uniform Trust Code
355
00:15:53.690 --> 00:15:57.640
to the extent it defines revocable and irrevocable
356
00:15:57.640 --> 00:16:00.580
and I believe what it says with respect to revocable
357
00:16:00.580 --> 00:16:03.540
is without the consent of the trustee
358
00:16:03.540 --> 00:16:04.880
or an adverse-
359
00:16:04.880 --> 00:16:06.514
Or an adverse interest, that's right,
360
00:16:06.514 --> 00:16:07.680
an adverse interest, great.
361
00:16:07.680 --> 00:16:08.513
Okay, thank you.
362
00:16:08.513 --> 00:16:10.305
Those definitions are controlling.
363
00:16:10.305 --> 00:16:13.820
Can you address the actual language that they,
364
00:16:13.820 --> 00:16:15.370
the come hosts were lying on?
365
00:16:15.370 --> 00:16:19.180
Which is decisions made and actions taken here under,
366
00:16:19.180 --> 00:16:22.850
including without limitation amendment of this trust,
367
00:16:22.850 --> 00:16:25.060
shall be made or taken as the case may be
368
00:16:25.060 --> 00:16:27.010
by any of the beneficiaries.
369
00:16:27.010 --> 00:16:31.980
So why is that not make this irrevocable trust?
370
00:16:31.980 --> 00:16:34.230
That particular language?
371
00:16:34.230 --> 00:16:37.900
Again, because it is a nominee trust,
372
00:16:37.900 --> 00:16:39.680
it is not a revocable trust.
373
00:16:39.680 --> 00:16:42.960
It is a principal agency relationship.
374
00:16:42.960 --> 00:16:46.439
And with respect to that provision,
375
00:16:46.439 --> 00:16:49.700
there's also another article, article six,
376
00:16:49.700 --> 00:16:52.650
which discusses how any amendments to the declaration
377
00:16:52.650 --> 00:16:55.040
need to be made by all beneficiaries.
378
00:16:55.040 --> 00:16:59.590
And that for my position is the operational article here.
379
00:16:59.590 --> 00:17:02.620
And arguably this only speaks to the ability to amend,
380
00:17:02.620 --> 00:17:05.800
the quote unquote nominee trust.
381
00:17:05.800 --> 00:17:06.670
You know, again,
382
00:17:06.670 --> 00:17:09.460
the interests are vested property interests.
383
00:17:09.460 --> 00:17:12.710
They own interest in real property that are vested,
384
00:17:12.710 --> 00:17:15.580
that no single beneficiary can take away
385
00:17:15.580 --> 00:17:17.203
from another beneficiary.
386
00:17:18.453 --> 00:17:20.680
Can I ask a question?
387
00:17:20.680 --> 00:17:21.513
Can they value
388
00:17:23.252 --> 00:17:26.140
the life through major interests that she had?
389
00:17:26.140 --> 00:17:28.783
And impose a monetary value on that?
390
00:17:29.975 --> 00:17:32.500
You can retain the life interest in the property, right?
391
00:17:32.500 --> 00:17:34.740
She retained a life estate in trust.
392
00:17:34.740 --> 00:17:36.793
Does that have a market value?
393
00:17:38.140 --> 00:17:40.070
I don't know if it would have a fair market value,
394
00:17:40.070 --> 00:17:42.170
but under the social security tables,
395
00:17:42.170 --> 00:17:44.980
and how MassHealth looks at a value
396
00:17:44.980 --> 00:17:46.080
of a life estate interest,
397
00:17:46.080 --> 00:17:49.030
I valued it as about $10,000,
398
00:17:49.030 --> 00:17:52.870
just based on my calculations of how MassHealth values-
399
00:17:52.870 --> 00:17:55.633
So could they in fact get that?
400
00:17:57.240 --> 00:17:59.430
She does have a life estate interest.
401
00:17:59.430 --> 00:18:02.610
And that is potentially the only asset
402
00:18:02.610 --> 00:18:03.730
that could be countable,
403
00:18:03.730 --> 00:18:05.380
not the whole thing.
404
00:18:05.380 --> 00:18:09.520
If property say was sold during her, she's now deceased,
405
00:18:09.520 --> 00:18:12.460
but if it had been sold during her lifetime
406
00:18:12.460 --> 00:18:14.033
and she was on MassHealth,
407
00:18:14.033 --> 00:18:18.030
that would go back to her, and it would be countable
408
00:18:18.030 --> 00:18:19.810
until she spent it down, for example,
409
00:18:19.810 --> 00:18:21.400
on her nursing home care.
410
00:18:21.400 --> 00:18:24.210
And all of these rules are spelled out
411
00:18:24.210 --> 00:18:25.710
in the MassHealth regulations.
412
00:18:27.670 --> 00:18:28.870
Any further questions?
413
00:18:30.490 --> 00:18:31.786
Thank you, Ms. Neeley.
414
00:18:31.786 --> 00:18:33.108
Mr. Furgang.
415
00:18:33.108 --> 00:18:35.450
Morning your honor, may it please the court.
416
00:18:35.450 --> 00:18:38.680
The issue in this case is whether the Frank family trusts
417
00:18:38.680 --> 00:18:43.230
assets accountable for purposes of Medicaid eligibility.
418
00:18:43.230 --> 00:18:44.660
What makes you think it's a trust?
419
00:18:44.660 --> 00:18:46.620
What makes you think it's a trust?
420
00:18:46.620 --> 00:18:47.900
Well, your honor, first of all,
421
00:18:47.900 --> 00:18:51.000
the definition under the federal statute determines whether
422
00:18:51.000 --> 00:18:53.780
it's considered to be a trust for accountability-
423
00:18:53.780 --> 00:18:54.613
Do you think it's making any difference
424
00:18:54.613 --> 00:18:58.390
what our rules are in Massachusetts about nominee trusts?
425
00:18:58.390 --> 00:19:00.730
Your honor, everything's determined by the language
426
00:19:00.730 --> 00:19:02.190
of the document itself.
427
00:19:02.190 --> 00:19:06.030
And this is not a trust issue per say,
428
00:19:06.030 --> 00:19:07.620
under Massachusetts law.
429
00:19:07.620 --> 00:19:09.920
This is a Medicaid eligibility-
430
00:19:09.920 --> 00:19:11.650
Well let's get your definition of what the issue is.
431
00:19:11.650 --> 00:19:12.540
I'm saying to you,
432
00:19:12.540 --> 00:19:14.120
that I think it matters what the vehicle is,
433
00:19:14.120 --> 00:19:15.840
in terms of what kind of interests she has,
434
00:19:15.840 --> 00:19:17.450
under Massachusetts law,
435
00:19:17.450 --> 00:19:19.140
and Massachusetts law, the nominee trust
436
00:19:19.140 --> 00:19:20.330
is not a true trust.
437
00:19:20.330 --> 00:19:21.574
Isn't that true?
438
00:19:21.574 --> 00:19:22.493
No, your honor.
439
00:19:22.493 --> 00:19:25.226
Is that true? That is not true?
440
00:19:25.226 --> 00:19:26.310
No, it is not true your honor,
441
00:19:26.310 --> 00:19:29.460
a nominee trust is a trust like vehicle-
442
00:19:29.460 --> 00:19:30.950
It is not, it is not,
443
00:19:30.950 --> 00:19:31.930
it's not what our law says,
444
00:19:31.930 --> 00:19:34.010
it is never what our law has said about nominee trust.
445
00:19:34.010 --> 00:19:35.460
Nominee trusts are not true trust,
446
00:19:35.460 --> 00:19:37.930
that has been clear for years.
447
00:19:37.930 --> 00:19:40.280
Well, your honor, I refer again to the cases where
448
00:19:40.280 --> 00:19:41.743
it is treated in some way,
449
00:19:41.743 --> 00:19:45.290
this court has stated that in some circumstances
450
00:19:45.290 --> 00:19:47.010
it is treated as a trust,
451
00:19:47.010 --> 00:19:49.440
and in some circumstances it is not.
452
00:19:49.440 --> 00:19:52.540
And in this case, we have to look to the federal statute
453
00:19:52.540 --> 00:19:55.020
to determine how it should be treated.
454
00:19:55.020 --> 00:19:57.740
But Counsel, the case law and the federal side says
455
00:19:57.740 --> 00:20:00.844
that we look the federal law,
456
00:20:00.844 --> 00:20:03.140
federal judges or courts like the bankruptcy court,
457
00:20:03.140 --> 00:20:05.440
or whoever are going to look at Massachusetts law
458
00:20:05.440 --> 00:20:07.300
to see what a nominee trust is.
459
00:20:07.300 --> 00:20:08.470
What's the definition of it?
460
00:20:08.470 --> 00:20:09.440
What does it mean?
461
00:20:09.440 --> 00:20:11.050
So we go back to our law again,
462
00:20:11.050 --> 00:20:12.730
even if you apply the statute,
463
00:20:12.730 --> 00:20:14.810
even if you apply the federal statutes.
464
00:20:14.810 --> 00:20:16.790
Well, I don't see federal saying that
465
00:20:16.790 --> 00:20:18.390
with respect to this particular issue
466
00:20:18.390 --> 00:20:20.150
under the Medicaid eligibility.
467
00:20:20.150 --> 00:20:22.180
Under the federal law,
468
00:20:22.180 --> 00:20:25.951
it says that a trust is any legal instrument or device
469
00:20:25.951 --> 00:20:28.760
that is similar to a trust.
470
00:20:28.760 --> 00:20:31.230
It need not be a trust in the form
471
00:20:31.230 --> 00:20:33.380
that is traditionally accepted, as long as it-
472
00:20:33.380 --> 00:20:36.160
What would make this similar to a trust counsel?
473
00:20:36.160 --> 00:20:38.490
What would make this similar to a trust?
474
00:20:38.490 --> 00:20:40.400
The fact that the trustee by the,
475
00:20:40.400 --> 00:20:41.260
well, first of all,
476
00:20:41.260 --> 00:20:44.921
under any examination of a property document,
477
00:20:44.921 --> 00:20:47.500
you look at the terms of the document
478
00:20:47.500 --> 00:20:49.330
and the terms of this document in this case,
479
00:20:49.330 --> 00:20:52.277
say on the one hand, it is a nominee trust.
480
00:20:52.277 --> 00:20:55.530
On the other hand, it says the property is held
481
00:20:55.530 --> 00:20:59.950
by a trustee for the benefit of the beneficiaries.
482
00:20:59.950 --> 00:21:03.237
It says that the document, that the trust property,
483
00:21:03.237 --> 00:21:07.160
the trust document itself, maybe amended by-
484
00:21:07.160 --> 00:21:10.460
Well now there's two parts in that trust document
485
00:21:10.460 --> 00:21:11.440
you were referring to.
486
00:21:11.440 --> 00:21:15.030
One requires the amendment of all the beneficiaries,
487
00:21:15.030 --> 00:21:16.590
but another part you were pointing to,
488
00:21:16.590 --> 00:21:19.690
I think it was section three, just talked about amendments.
489
00:21:19.690 --> 00:21:23.290
Can you explain to me what that language means to you
490
00:21:23.290 --> 00:21:24.403
in section three?
491
00:21:25.428 --> 00:21:27.900
In a way, well, just first of all,
492
00:21:27.900 --> 00:21:28.880
I would say that it doesn't matter
493
00:21:28.880 --> 00:21:30.910
which of these two provisions-
494
00:21:30.910 --> 00:21:32.150
Well, I read very differently.
495
00:21:32.150 --> 00:21:36.560
One seemed very explicit section forcing very explicit,
496
00:21:36.560 --> 00:21:38.050
or whether it's four or five, I don't remember.
497
00:21:38.050 --> 00:21:41.085
But section three, is the language was a bit different.
498
00:21:41.085 --> 00:21:42.713
Well I think it does matter.
499
00:21:43.593 --> 00:21:44.810
A section of this deed
500
00:21:44.810 --> 00:21:47.260
described the powers of the beneficiaries,
501
00:21:47.260 --> 00:21:52.120
and basically said that several specific actions,
502
00:21:52.120 --> 00:21:54.720
may be conducted by any beneficiary.
503
00:21:54.720 --> 00:21:58.110
And one of those actions included amendment of the trust.
504
00:21:58.110 --> 00:22:02.250
Section six, dealt with amendment per say.
505
00:22:02.250 --> 00:22:06.078
And there, it talked about amendment of the deed of trust,
506
00:22:06.078 --> 00:22:09.260
which has to be conducted only with the consent,
507
00:22:09.260 --> 00:22:11.970
written consent of all the beneficiaries.
508
00:22:11.970 --> 00:22:14.330
And what we are arguing is again,
509
00:22:14.330 --> 00:22:16.920
looking at the document and the language of the document.
510
00:22:16.920 --> 00:22:20.440
It doesn't matter which of those two could apply
511
00:22:20.440 --> 00:22:22.740
in any particular circumstance.
512
00:22:22.740 --> 00:22:27.010
The end result is that unlike in a standard nominee trust,
513
00:22:27.010 --> 00:22:30.961
where the property is considered deeded in effect
514
00:22:30.961 --> 00:22:32.990
to the beneficiaries,
515
00:22:32.990 --> 00:22:37.890
here, the document itself anticipates situations
516
00:22:37.890 --> 00:22:40.760
where the beneficial ownership will change
517
00:22:40.760 --> 00:22:43.190
within the context of the trust itself.
518
00:22:43.190 --> 00:22:45.470
Well, isn't the point that at the moment
519
00:22:45.470 --> 00:22:49.000
it was executed and illegally,
520
00:22:49.000 --> 00:22:52.330
the beneficiaries had a vested interest.
521
00:22:52.330 --> 00:22:54.110
They had a vested interest at that point,
522
00:22:54.110 --> 00:22:57.495
the other five beneficiaries, right?
523
00:22:57.495 --> 00:23:00.992
For certain instances-
524
00:23:00.992 --> 00:23:03.350
Was either vested or it isn't?
525
00:23:03.350 --> 00:23:05.870
They are treated as having vested interest.
526
00:23:05.870 --> 00:23:08.510
But from the point of view of the Medicaid statute,
527
00:23:08.510 --> 00:23:11.730
it doesn't care about whether or not it has a best interest
528
00:23:11.730 --> 00:23:14.980
or not, because it explicitly says in the statute
529
00:23:14.980 --> 00:23:16.250
that the provisions apply,
530
00:23:16.250 --> 00:23:18.370
regardless of the purpose of the trust,
531
00:23:18.370 --> 00:23:20.610
which in this case is to,
532
00:23:20.610 --> 00:23:24.390
give some kind of a vested interest to the beneficiaries.
533
00:23:24.390 --> 00:23:27.840
And regardless of whether the trustee can exercise
534
00:23:27.840 --> 00:23:29.140
any discretion.
535
00:23:29.140 --> 00:23:32.680
And the key element of normally of a nominee trust,
536
00:23:32.680 --> 00:23:36.410
is that unlike the normal trust that we deal with,
537
00:23:36.410 --> 00:23:39.330
the trustee is empowered with the right to,
538
00:23:39.330 --> 00:23:41.120
with a certain degree of discretion.
539
00:23:41.120 --> 00:23:44.413
Here, main characteristic of a nominee trust
540
00:23:44.413 --> 00:23:47.832
is that the trustee has no discretion and always-
541
00:23:47.832 --> 00:23:50.220
Tell me what discretion this plaintiff has,
542
00:23:50.220 --> 00:23:52.193
or this person has here?
543
00:23:54.977 --> 00:23:56.750
There's no question that the trustee
544
00:23:56.750 --> 00:23:58.911
does not have any discretion.
545
00:23:58.911 --> 00:24:01.560
I can see that your honor, but again,
546
00:24:01.560 --> 00:24:03.590
the Medicaid statute applies
547
00:24:03.590 --> 00:24:05.940
even if the trustee has no discretion.
548
00:24:05.940 --> 00:24:10.130
That is explicit and in fact, that is a significant change
549
00:24:10.130 --> 00:24:13.650
in the provisions from the pre 1993 version.
550
00:24:13.650 --> 00:24:15.870
In earlier cases that where they were construing
551
00:24:15.870 --> 00:24:19.840
a Medicaid coverage, they jumped with a pre 1993 version,
552
00:24:19.840 --> 00:24:22.070
and a key element of those decisions
553
00:24:22.070 --> 00:24:26.920
was whether or not a trustee was able to exercise its
554
00:24:26.920 --> 00:24:28.970
discretion, exercise discretion,
555
00:24:28.970 --> 00:24:31.940
to transmit funds to the beneficiary.
556
00:24:31.940 --> 00:24:34.120
And if he could, then it was countable.
557
00:24:34.120 --> 00:24:38.380
If I could jump in for a moment, and I ask,
558
00:24:38.380 --> 00:24:41.650
so any of the beneficiaries under this trust,
559
00:24:41.650 --> 00:24:46.650
can revoke the trust including the appellant.
560
00:24:47.040 --> 00:24:50.760
But if the trust is terminated,
561
00:24:50.760 --> 00:24:52.110
then they can terminate the trust,
562
00:24:52.110 --> 00:24:53.730
any one of the beneficiaries.
563
00:24:53.730 --> 00:24:56.020
If the trust is terminated,
564
00:24:56.020 --> 00:25:00.080
then all that the appellant has
565
00:25:00.080 --> 00:25:01.570
is a life estate.
566
00:25:01.570 --> 00:25:03.370
And it's just as Cafco said,
567
00:25:03.370 --> 00:25:05.080
well, that's another case perhaps,
568
00:25:05.080 --> 00:25:05.913
well in this case,
569
00:25:05.913 --> 00:25:08.570
what we value the life estate to be.
570
00:25:08.570 --> 00:25:13.240
But all she has under the trust is a life estate.
571
00:25:13.240 --> 00:25:16.700
For her to have anything beyond that life estate,
572
00:25:16.700 --> 00:25:20.970
there has to be another transaction beyond the trust,
573
00:25:20.970 --> 00:25:24.690
which is if the beneficiaries gift,
574
00:25:24.690 --> 00:25:26.890
the remainder back to her.
575
00:25:26.890 --> 00:25:30.630
But within the four corners of the trust,
576
00:25:30.630 --> 00:25:33.370
all she owns is a life estate.
577
00:25:33.370 --> 00:25:36.350
So all you have access to,
578
00:25:36.350 --> 00:25:40.370
if at all with your regulations is the life estate.
579
00:25:40.370 --> 00:25:42.710
I respectfully disagree your honor.
580
00:25:42.710 --> 00:25:45.330
Under the language of, for two reasons;
581
00:25:45.330 --> 00:25:46.700
firstly, under the language
582
00:25:46.700 --> 00:25:49.090
of the termination provision itself,
583
00:25:49.090 --> 00:25:53.403
any individual beneficiary may terminate the trust.
584
00:25:53.403 --> 00:25:54.236
Just as I said.
585
00:25:54.236 --> 00:25:56.840
There are two possible consequences.
586
00:25:56.840 --> 00:25:59.170
One consequence is, as you said,
587
00:25:59.170 --> 00:26:01.300
that the property is distributed
588
00:26:01.300 --> 00:26:04.300
to each of the beneficiaries, as they set out,
589
00:26:04.300 --> 00:26:06.950
as a share is set out in the schedule.
590
00:26:06.950 --> 00:26:10.290
The other potential alternative consequence,
591
00:26:10.290 --> 00:26:11.860
is that the beneficiaries
592
00:26:11.860 --> 00:26:14.920
may otherwise direct the distribution of the property.
593
00:26:14.920 --> 00:26:19.860
So as in the termination of the trust,
594
00:26:19.860 --> 00:26:21.730
the beneficiaries can direct,
595
00:26:21.730 --> 00:26:25.670
that the property be distributed to the grantor.
596
00:26:25.670 --> 00:26:29.440
That is completely allowable
597
00:26:29.440 --> 00:26:32.210
under the terms of the termination provision.
598
00:26:32.210 --> 00:26:35.200
Secondly, even apart from the termination provision
599
00:26:35.200 --> 00:26:36.240
as I've inverted to-
600
00:26:36.240 --> 00:26:38.642
But wouldn't that be a gift?
601
00:26:38.642 --> 00:26:42.290
Doesn't that then fall into this category that
602
00:26:42.290 --> 00:26:44.330
the beneficiaries are doing this
603
00:26:44.330 --> 00:26:45.690
out of the goodness of their heart,
604
00:26:45.690 --> 00:26:47.220
not out of any obligation.
605
00:26:47.220 --> 00:26:51.020
So it's like the gift that we've said is not the same?
606
00:26:51.020 --> 00:26:52.633
That's where I get confused.
607
00:26:54.237 --> 00:26:57.540
I get your argument that they can terminate the trust
608
00:26:57.540 --> 00:27:01.140
and convert it into a life estate and remain dormant.
609
00:27:01.140 --> 00:27:04.980
But I don't understand how the beneficiaries
610
00:27:04.980 --> 00:27:06.690
give her back the whole house
611
00:27:06.690 --> 00:27:08.780
unless they do it out of the goodness of their heart,
612
00:27:08.780 --> 00:27:11.290
'cause they have no legal obligation to do that.
613
00:27:11.290 --> 00:27:13.390
So is it becoming a gift?
614
00:27:13.390 --> 00:27:16.250
No, your honor, because even under the earlier cases,
615
00:27:16.250 --> 00:27:18.808
like the LeBow case, for example,
616
00:27:18.808 --> 00:27:22.270
there are many instances where a beneficiary,
617
00:27:22.270 --> 00:27:27.270
can give up their entitlement to the trust proceeds
618
00:27:28.350 --> 00:27:29.183
for the benefit
619
00:27:30.370 --> 00:27:33.280
of the grantor without having-
620
00:27:33.280 --> 00:27:34.887
How is it that's not a gift?
621
00:27:36.634 --> 00:27:38.230
You don't have to give it over.
622
00:27:38.230 --> 00:27:39.360
Why is that not a gift?
623
00:27:39.360 --> 00:27:40.820
Because it's done,
624
00:27:40.820 --> 00:27:43.763
well in LeBow, this court held that was not a gift.
625
00:27:46.021 --> 00:27:48.849
The beneficiary can in fact,
626
00:27:48.849 --> 00:27:52.940
give back part of their beneficiary entitlement
627
00:27:52.940 --> 00:27:55.111
to the grantor, it countable.
628
00:27:55.111 --> 00:27:59.880
As long as it is done within the confines of the trust,
629
00:27:59.880 --> 00:28:01.510
it is not considered a gift
630
00:28:01.510 --> 00:28:04.910
because as long as it is within the confines of the trust,
631
00:28:04.910 --> 00:28:06.550
both under the federal statute
632
00:28:06.550 --> 00:28:09.200
and under the LeBow case, for example,
633
00:28:09.200 --> 00:28:11.680
it is still trust property,
634
00:28:11.680 --> 00:28:13.773
and therefore it is countable.
635
00:28:16.820 --> 00:28:18.697
Go ahead, I'm sorry.
636
00:28:18.697 --> 00:28:20.830
No go ahead Justice Lowy, go ahead.
637
00:28:20.830 --> 00:28:22.940
But in LeBow,
638
00:28:22.940 --> 00:28:26.220
the trustee had the discretion
639
00:28:26.220 --> 00:28:30.623
to provide assets to the beneficiary,
640
00:28:32.130 --> 00:28:35.760
and the corpus, the entire corpus
641
00:28:35.760 --> 00:28:37.440
could go to the beneficiary
642
00:28:37.440 --> 00:28:39.880
at the discretion of the trustee.
643
00:28:39.880 --> 00:28:42.880
That is completely different
644
00:28:42.880 --> 00:28:44.100
than this situation.
645
00:28:44.100 --> 00:28:46.563
So I'm really confused how LeBow helps you.
646
00:28:47.420 --> 00:28:49.300
Well LeBow helps for two reasons your honor,
647
00:28:49.300 --> 00:28:50.520
first of all, in LeBow,
648
00:28:50.520 --> 00:28:55.030
the court said that the right to amend first of all,
649
00:28:55.030 --> 00:28:58.560
was vested in a beneficiary.
650
00:28:58.560 --> 00:29:01.580
And it wasn't specified whether
651
00:29:01.580 --> 00:29:06.540
that why two men was granted as a trustee or a beneficiary.
652
00:29:06.540 --> 00:29:09.280
And it was immaterial to the court's decision.
653
00:29:09.280 --> 00:29:12.760
All that mattered was that the beneficiary
654
00:29:12.760 --> 00:29:15.420
had the right to amend the trust,
655
00:29:15.420 --> 00:29:19.440
so that the trustee could then give the property over
656
00:29:19.440 --> 00:29:21.340
to the beneficiary.
657
00:29:21.340 --> 00:29:22.900
And as I said, at that point,
658
00:29:22.900 --> 00:29:25.610
the fact that the trustee could do that mattered
659
00:29:25.610 --> 00:29:28.210
because the pre 1993 statute
660
00:29:28.210 --> 00:29:30.770
required that there be some discretion
661
00:29:30.770 --> 00:29:33.600
vested in the trustee to transfer property.
662
00:29:33.600 --> 00:29:35.660
But post 1993,
663
00:29:35.660 --> 00:29:38.030
the federal statute eliminated that requirement
664
00:29:38.030 --> 00:29:39.150
for accountability.
665
00:29:39.150 --> 00:29:42.878
Now, the trustee can zero discretion
666
00:29:42.878 --> 00:29:44.550
as in a nominee trust,
667
00:29:44.550 --> 00:29:47.900
and yet still the assets must be countered
668
00:29:47.900 --> 00:29:50.040
if there's any circumstance
669
00:29:50.040 --> 00:29:55.040
in which the property can be given back to the grantor.
670
00:29:55.390 --> 00:29:56.410
And those-
671
00:29:56.410 --> 00:29:58.350
I guess if I could distill,
672
00:29:58.350 --> 00:30:02.700
if I could distill my problem, because I mean,
673
00:30:02.700 --> 00:30:04.740
maybe you're right, I mean,
674
00:30:04.740 --> 00:30:06.720
other taxpayers don't wanna pay for
675
00:30:06.720 --> 00:30:09.890
people who can afford it to, you know,
676
00:30:09.890 --> 00:30:12.990
to have this care, be a nursing homes.
677
00:30:12.990 --> 00:30:15.540
That's not fair for other taxpayers to pay if they can,
678
00:30:15.540 --> 00:30:16.700
they have the money to afford it.
679
00:30:16.700 --> 00:30:18.010
So I understand.
680
00:30:18.010 --> 00:30:19.950
But here's my problem.
681
00:30:19.950 --> 00:30:23.520
My problem is it takes a transaction,
682
00:30:23.520 --> 00:30:25.710
be on the trust,
683
00:30:25.710 --> 00:30:30.250
to get that property,
684
00:30:30.250 --> 00:30:32.630
real property, not life estate,
685
00:30:32.630 --> 00:30:35.583
into the hands of the
686
00:30:37.430 --> 00:30:39.200
Medicaid recipient.
687
00:30:39.200 --> 00:30:41.820
And that's in a nutshell my problem,
688
00:30:41.820 --> 00:30:44.490
is it takes another transaction beyond the trust.
689
00:30:44.490 --> 00:30:46.763
Your honor, I don't believe that is,
690
00:30:48.908 --> 00:30:52.360
that is the case here, under the any circumstances test,
691
00:30:52.360 --> 00:30:54.530
one of the circumstances that could occur
692
00:30:54.530 --> 00:30:57.130
within the confines of the trust,
693
00:30:57.130 --> 00:31:00.860
is that the trust could be amended by the beneficiaries,
694
00:31:00.860 --> 00:31:02.360
and in that amendment,
695
00:31:02.360 --> 00:31:04.643
they change the schedule of beneficiaries,
696
00:31:04.643 --> 00:31:08.960
that as the sole beneficiary is the grantor.
697
00:31:08.960 --> 00:31:12.070
Therefore, within the confines of the trust,
698
00:31:12.070 --> 00:31:15.500
the grantor assumes complete ownership of the property.
699
00:31:15.500 --> 00:31:17.870
And in fact, the trust document itself
700
00:31:17.870 --> 00:31:21.060
anticipates that kind of an action,
701
00:31:21.060 --> 00:31:26.020
under section three, paragraph three,
702
00:31:26.020 --> 00:31:29.780
the trust anticipates a situation where both the legal
703
00:31:29.780 --> 00:31:32.450
and equitable title of the property,
704
00:31:32.450 --> 00:31:36.290
mergers when it is held by a single individual.
705
00:31:36.290 --> 00:31:39.200
So the trust both allows for an amendment
706
00:31:39.200 --> 00:31:42.080
of its own provisions and anticipates
707
00:31:42.080 --> 00:31:44.490
that that amendment will lead to
708
00:31:44.490 --> 00:31:47.240
a single individual beneficiary
709
00:31:47.240 --> 00:31:50.750
having complete title to the property.
710
00:31:50.750 --> 00:31:54.430
That is a case that Medicaid insist means
711
00:31:54.430 --> 00:31:56.050
that the trust should be countered,
712
00:31:56.050 --> 00:31:58.510
because there is a circumstance
713
00:31:58.510 --> 00:32:01.490
where the entire corpus of the trust
714
00:32:01.490 --> 00:32:04.363
could be returned to the grantor.
715
00:32:05.210 --> 00:32:09.490
And that takes place within the confines and the provisions
716
00:32:09.490 --> 00:32:10.978
of the trust itself.
717
00:32:10.978 --> 00:32:13.194
(mumbles)
718
00:32:13.194 --> 00:32:14.520
This send over could be means,
719
00:32:14.520 --> 00:32:17.040
I mean, in that analysis could be,
720
00:32:17.040 --> 00:32:18.940
is completely dependent on the goodwill
721
00:32:18.940 --> 00:32:21.600
and the beneficial interests
722
00:32:21.600 --> 00:32:26.210
of the other children, saying, "Oh, mom, take it back."
723
00:32:26.210 --> 00:32:27.690
Yeah, I mean, you cannot make them take,
724
00:32:27.690 --> 00:32:29.110
you cannot make them do that.
725
00:32:29.110 --> 00:32:30.120
You cannot make them do that.
726
00:32:30.120 --> 00:32:33.000
But so it could be, it's only if they want to,
727
00:32:33.000 --> 00:32:35.312
if they out of the goodness of their heart, want to.
728
00:32:35.312 --> 00:32:36.145
Absolutely.
729
00:32:36.145 --> 00:32:39.730
Very slenderly, very slenderly, very slenderly.
730
00:32:39.730 --> 00:32:42.900
Absolutely, and of course the courts are full of cases
731
00:32:42.900 --> 00:32:45.080
where assets accountable,
732
00:32:45.080 --> 00:32:49.730
even if there is no compulsion for any action,
733
00:32:49.730 --> 00:32:53.170
any circumstance test means exactly what it says.
734
00:32:53.170 --> 00:32:56.670
If a beneficiary out of the goodness of their heart,
735
00:32:56.670 --> 00:32:59.197
wants to help out their family,
736
00:32:59.197 --> 00:33:01.813
and give up their-
737
00:33:01.813 --> 00:33:03.620
How does that help out the family?
738
00:33:03.620 --> 00:33:05.283
It helps the rest of us,
739
00:33:05.283 --> 00:33:06.760
it doesn't help out the family.
740
00:33:06.760 --> 00:33:08.823
Well, the courts also,
741
00:33:09.880 --> 00:33:13.230
the reason why the accountability statute exists
742
00:33:13.230 --> 00:33:16.540
is because of the recognition by the Federal Government.
743
00:33:16.540 --> 00:33:19.530
And this court has repeatedly acknowledged that recognition
744
00:33:19.530 --> 00:33:21.863
that is created as a way,
745
00:33:21.863 --> 00:33:24.804
for the family, together,
746
00:33:24.804 --> 00:33:29.260
to sequester assets for the benefit of either
747
00:33:29.260 --> 00:33:32.530
the grantor or themselves as heirs.
748
00:33:32.530 --> 00:33:36.020
That is what, It's a shielding device, in effect
749
00:33:36.020 --> 00:33:39.010
that either the mother gets it or they get it,
750
00:33:39.010 --> 00:33:40.680
but Medicaid does not get it.
751
00:33:40.680 --> 00:33:42.690
What about another kind of beneficiary?
752
00:33:42.690 --> 00:33:45.273
Could a creditor reach and get that?
753
00:33:46.280 --> 00:33:47.730
I don't, your honor.
754
00:33:47.730 --> 00:33:51.050
And frankly, the Medicaid statute is unconcerned with that.
755
00:33:51.050 --> 00:33:52.180
As LeBow said,
756
00:33:52.180 --> 00:33:55.630
issue of access to creditors or other purposes,
757
00:33:55.630 --> 00:33:58.490
is immaterial to the Medicaid statute.
758
00:33:58.490 --> 00:34:00.750
The statute looks simply at the language
759
00:34:00.750 --> 00:34:02.780
of the trust vehicle,
760
00:34:02.780 --> 00:34:05.340
and sees whether under each terms,
761
00:34:05.340 --> 00:34:07.600
there is any circumstance in which
762
00:34:08.490 --> 00:34:11.970
the property could revert back to the grantor.
763
00:34:11.970 --> 00:34:14.520
And the fact that under other circumstances,
764
00:34:14.520 --> 00:34:17.810
that probably could be considered vested, is immaterial.
765
00:34:17.810 --> 00:34:20.130
And LeBow specifically says that.
766
00:34:20.130 --> 00:34:22.220
And indeed, in the Cohen case also,
767
00:34:22.220 --> 00:34:25.200
it noted that the trust may considered,
768
00:34:25.200 --> 00:34:27.910
the trust may be interpreted in one way,
769
00:34:27.910 --> 00:34:30.060
under probate law for Massachusetts
770
00:34:30.060 --> 00:34:32.470
and in other way under the Medicaid statute,
771
00:34:32.470 --> 00:34:34.480
because they serve different purposes.
772
00:34:34.480 --> 00:34:37.110
This is not an effort to change Massachusetts
773
00:34:37.110 --> 00:34:38.510
press law your honor.
774
00:34:38.510 --> 00:34:41.642
This is not an effort to change the relationship
775
00:34:41.642 --> 00:34:44.290
between the beneficiaries, the property,
776
00:34:44.290 --> 00:34:47.320
and other parties for other reasons.
777
00:34:47.320 --> 00:34:50.200
This is only for the purpose of determining,
778
00:34:50.200 --> 00:34:54.870
whether an individual has access to Medicaid benefits
779
00:34:54.870 --> 00:34:55.810
or not.
780
00:34:55.810 --> 00:34:57.527
And so as we look at this document-
781
00:34:57.527 --> 00:34:59.980
Mr. Furgang, can I ask a quick question?
782
00:34:59.980 --> 00:35:03.310
Has MassHealth changed its views on life estates?
783
00:35:03.310 --> 00:35:05.160
'Cause at one point they were conceding
784
00:35:05.160 --> 00:35:07.310
that a life estate doesn't count.
785
00:35:07.310 --> 00:35:10.831
But it seems vaguer in this case than it has in the past.
786
00:35:10.831 --> 00:35:13.250
Is there a change in position out there?
787
00:35:13.250 --> 00:35:17.070
Or do we ignore this life estate issue?
788
00:35:17.070 --> 00:35:20.700
I think they have not made a pronouncement on that yet,
789
00:35:20.700 --> 00:35:23.540
but certainly the Hayne and Daley cases,
790
00:35:23.540 --> 00:35:28.131
have opened the door for them to go back
791
00:35:28.131 --> 00:35:30.830
and look at that issue again,
792
00:35:30.830 --> 00:35:34.200
because under those decisions, it would appear that
793
00:35:34.200 --> 00:35:36.800
the value of a life estate would be countable.
794
00:35:36.800 --> 00:35:40.740
But again, that's not the issue in this case itself.
795
00:35:40.740 --> 00:35:43.059
It may certainly come up again,
796
00:35:43.059 --> 00:35:45.410
but here, the issue is more about,
797
00:35:45.410 --> 00:35:46.780
do we apply the Stevie,
798
00:35:46.780 --> 00:35:49.390
the language of the Medicaid statute or not?
799
00:35:49.390 --> 00:35:51.660
And frankly we have no choice,
800
00:35:51.660 --> 00:35:53.470
because that's what the law is.
801
00:35:53.470 --> 00:35:54.963
And the law is that,
802
00:35:56.278 --> 00:35:58.423
the federal government statute,
803
00:36:00.440 --> 00:36:03.010
is agnostic at best,
804
00:36:03.010 --> 00:36:07.460
about whether or not this is labeled as a nominee trust
805
00:36:07.460 --> 00:36:08.910
or any other kinds of trust?
806
00:36:08.910 --> 00:36:10.520
All it cares about,
807
00:36:10.520 --> 00:36:13.740
is what the language of the trust permits.
808
00:36:13.740 --> 00:36:15.890
And hear the language of the trust,
809
00:36:15.890 --> 00:36:19.430
permits the property under some circumstances-
810
00:36:19.430 --> 00:36:21.360
Doesn't mean it's a trust at all.
811
00:36:21.360 --> 00:36:23.670
You keep saying it, assuming it's the trust.
812
00:36:23.670 --> 00:36:25.030
You keep assuming that this is a trust.
813
00:36:25.030 --> 00:36:26.680
And I'm telling you it is not a trust.
814
00:36:26.680 --> 00:36:27.513
No, your honor.
815
00:36:27.513 --> 00:36:29.240
I'm assuming that it's a trust under the definition
816
00:36:29.240 --> 00:36:31.360
of the Medicaid statute.
817
00:36:31.360 --> 00:36:32.810
Under the Medicaid statute,
818
00:36:32.810 --> 00:36:36.153
any legal instrument or device that is similar to a trust,
819
00:36:36.153 --> 00:36:37.872
not even a trust.
820
00:36:37.872 --> 00:36:40.691
And here-
Similar to a trust.
821
00:36:40.691 --> 00:36:42.460
How is it similar to a trust?
822
00:36:42.460 --> 00:36:43.293
Because it's called a trust?
823
00:36:43.293 --> 00:36:45.220
Because under the terms of the document,
824
00:36:45.220 --> 00:36:47.930
a trustee holds the property for the beneficiary.
825
00:36:47.930 --> 00:36:49.493
A trustee is an agent in Massachusetts Law.
826
00:36:49.493 --> 00:36:52.370
it's not a trustee, it's not a true trustee either.
827
00:36:52.370 --> 00:36:55.374
Under Massachusetts law, it's not a true trustee either.
828
00:36:55.374 --> 00:36:58.160
Your honor, for certain purposes, that is correct.
829
00:36:58.160 --> 00:37:01.100
But in this case, the plaintiffs made a decision.
830
00:37:01.100 --> 00:37:02.113
They could have,
831
00:37:03.270 --> 00:37:06.250
the grantor could have deeded her property,
832
00:37:06.250 --> 00:37:09.070
free of any trust to her relatives
833
00:37:09.070 --> 00:37:10.700
and retain a life estate.
834
00:37:10.700 --> 00:37:12.020
And she chose not to do that.
835
00:37:12.020 --> 00:37:16.040
She chose instead to create a nominee trust
836
00:37:16.040 --> 00:37:17.627
and take the consequences of that.
837
00:37:17.627 --> 00:37:20.080
And there are consequences that are both positive
838
00:37:20.080 --> 00:37:21.040
and negative.
839
00:37:21.040 --> 00:37:22.570
We don't know what the reasons are
840
00:37:22.570 --> 00:37:24.960
for why she chose that methodology,
841
00:37:24.960 --> 00:37:28.970
but the fact that she chose to create a nominee trust,
842
00:37:28.970 --> 00:37:33.970
put it into the ambit of the Medicaid statute under 1396 PD.
843
00:37:34.860 --> 00:37:38.630
And both the Massachusetts regulation that applies to that.
844
00:37:38.630 --> 00:37:41.210
And the federal statute itself saying,
845
00:37:41.210 --> 00:37:45.950
even if this document is not in all ways a trust,
846
00:37:45.950 --> 00:37:47.690
what they did here,
847
00:37:47.690 --> 00:37:50.910
was an effort should be looked at
848
00:37:50.910 --> 00:37:54.030
to see if it was an effort to shield the assets
849
00:37:54.030 --> 00:37:56.290
from being reached by Medicaid.
850
00:37:56.290 --> 00:37:59.250
And you look at it to see does it have
851
00:37:59.250 --> 00:38:02.970
the characteristics of a document that looks like a trust,
852
00:38:02.970 --> 00:38:07.010
even if it isn't really a trust under certain circumstances.
853
00:38:07.010 --> 00:38:11.210
And I defy anyone who's familiar with the law of trust
854
00:38:11.210 --> 00:38:15.310
to read that document and not tell me it looks like a trust.
855
00:38:15.310 --> 00:38:17.090
It is called a trust.
856
00:38:17.090 --> 00:38:18.630
It has a trustee.
857
00:38:18.630 --> 00:38:20.890
The trustee holds the property,
858
00:38:20.890 --> 00:38:23.540
which is exactly what trustees are supposed to do.
859
00:38:23.540 --> 00:38:25.640
It has beneficiaries of the trust.
860
00:38:25.640 --> 00:38:27.460
It has the right to be amended
861
00:38:27.460 --> 00:38:29.950
so that the properties of the truth can change
862
00:38:29.950 --> 00:38:31.800
in any number of ways.
863
00:38:31.800 --> 00:38:35.980
So for all those reasons, it is treated as a trust,
864
00:38:35.980 --> 00:38:39.810
only for the purpose of counting the assets for Medicaid.
865
00:38:39.810 --> 00:38:43.130
It may not be treated as a trust under Massachusetts law,
866
00:38:43.130 --> 00:38:44.960
for purposes of liability,
867
00:38:44.960 --> 00:38:47.220
for purposes of transfer of ownership,
868
00:38:47.220 --> 00:38:49.050
for purposes of taxes.
869
00:38:49.050 --> 00:38:50.880
There are all kinds of circumstances
870
00:38:50.880 --> 00:38:53.470
under which it will not be treated as a trust.
871
00:38:53.470 --> 00:38:55.950
But for purposes of counting assets
872
00:38:55.950 --> 00:38:59.910
for Medicaid eligibility, it is treated as a trust.
873
00:38:59.910 --> 00:39:02.970
That is what the statute clearly says.
874
00:39:02.970 --> 00:39:06.390
And we have to go by the language of the statute,
875
00:39:06.390 --> 00:39:09.830
which was indeed designed and amended
876
00:39:09.830 --> 00:39:12.920
to encompass these kinds of instruments.
877
00:39:12.920 --> 00:39:15.660
Where there are efforts to shield property
878
00:39:15.660 --> 00:39:19.680
from Medicaid while giving the benefit to the families.
879
00:39:19.680 --> 00:39:20.930
That's what's happening here.
880
00:39:20.930 --> 00:39:21.763
And Medicaid-
881
00:39:22.692 --> 00:39:24.013
Thank you, Mr. Furgang.
882
00:39:24.013 --> 00:39:26.740
Do we have any further questions?
883
00:39:26.740 --> 00:39:27.758
No.
884
00:39:27.758 --> 00:39:29.253
All right, thank you counsel.