A Minnesota appeals court rules that a state statute deeming irrevocable trusts to be revocable for the purposes of a Medicaid eligibility determination is preempted by federal law governing irrevocable trusts. Geyen v. Commissioner Minnesota Dept. of Human Services (Minn. Ct. App., No. A20-1300, July 12, 2021).
In 2011, Dorothy Geyen created two irrevocable trusts that named her children and grandchildren as beneficiaries. The trust agreements provided that the trustee was specifically precluded from loaning assets or making gifts to Ms. Geyen. In 2019, Ms. Geyen applied for Medicaid benefits. The state denied her application for excess assets because it determined that under state law, her irrevocable trusts became revocable when she applied for benefits. State law provides that when making a determination about eligibility for Medicaid benefits, any irrevocable trust containing the applicant’s assets becomes revocable for the purpose of that determination.
Ms. Geyen appealed the denial, arguing that state law conflicts with federal law. The state affirmed the denial, and Ms. Geyen appealed to court. The district court determined that under federal law, the trusts were not available assets and federal law preempted state law. The state appealed, arguing that the funds in the trust were available to Ms. Geyen under federal law and that the trusts became revocable under state law.
The Minnesota Court of Appeals affirms, holding that the trusts are not available assets under federal law and that federal law preempted state law. According to the court, “because the trust agreements did not permit the trustees to make payments to or for the benefit of [Ms.] Geyen under any circumstances,” they were not available assets. The court further holds that by “deeming irrevocable trusts to be revocable” for the sole purpose of a Medicaid eligibility determination, the state law “conflicts with the federal requirements governing the treatment of irrevocable trusts.”
(This blog post is reproduced from an article on the ElderLawAnswers website. Mr. Vanarelli is a founding member of ElderLawAnswers.)
The case is attached here –
For additional information concerning Medicaid applications and appeals, visit:
Categories
- Affordable Care Act
- Alzheimer's Disease
- Arbitration
- Attorney Ethics
- Attorneys Fees
- Beneficiary Designations
- Blog Roundup and Highlights
- Blogs and Blogging
- Care Facilities
- Caregivers
- Cemetery
- Collaborative Family Law
- Conservatorships
- Consumer Fraud
- Contempt
- Contracts
- Defamation
- Developmental Disabilities
- Discovery
- Discrimination Laws
- Doctrine of Probable Intent
- Domestic Violence
- Elder Abuse
- Elder Law
- Elective Share
- End-of-Life Decisions
- Estate Administration
- Estate Litigation
- Estate Planning
- Events
- Family Law
- Fiduciary
- Financial Exploitation of the Elderly
- Funeral
- Future of the Legal Profession
- Geriatric Care Managers
- Governmental or Public Benefit Programs
- Guardianship
- Health Issues
- Housing for the Elderly and Disabled
- In Remembrance
- Insolvent Estates
- Institutional Liens
- Insurance
- Interesting New Cases
- Intestacy
- Law Firm News
- Law Firm Videos
- Law Practice Management / Development
- Lawyers and Lawyering
- Legal Capacity or Competancy
- Legal Malpractice
- Legal Rights of the Disabled
- Liens
- Litigation
- Mediation
- Medicaid Appeals
- Medicaid Applications
- Medicaid Planning
- Annuities
- Care Contracts
- Divorce
- Estate Recovery
- Family Part Non-Dissolution Support Orders
- Gifts
- Life Estates
- Loan repayments
- MMMNA
- Promissory Notes
- Qualified Income Trusts
- Spousal Refusal
- Transfers For Reasons Other Than To Qualify For Medicaid
- Transfers to "Caregiver" Child(ren)
- Transfers to Disabled Adult Children
- Trusts
- Undue Hardship Provision
- Multiple-Party Deposit Account Act
- New Cases
- New Laws
- News Briefs
- Newsletters
- Non-Probate Assets
- Nursing Facility Litigation
- Personal Achievements and Awards
- Personal Injury Lawsuits
- Probate
- Punitive Damages
- Reconsideration
- Retirement Benefits
- Reverse Mortgages
- Section 8 Housing
- Settlement of Litigation
- Social Media
- Special Education
- Special Needs Planning
- Surrogate Decision-Making
- Taxation
- Technology
- Texting
- Top Ten
- Trials
- Trustees
- Uncategorized
- Veterans Benefits
- Web Sites and the Internet
- Webinar
- Writing Intended To Be A Will
Vanarelli & Li, LLC on Social Media