Funds Set Aside for Legal Fees Pursuant to a Court Order are Countable Assets

Recently, a Massachusetts trial court upheld a hearing officer’s decision holding that assets which a probate court authorized a Medicaid applicant’s guardian to set aside for legal and guardianship fees are a countable asset for Medicaid eligibility purposes.

In Astukewicz v. Executive Office of Health & Human Servs. (Mass. Sup. Ct., Worcester Co., No. 0800395B, Feb. 2, 2009), a probate court authorized Barry J. Astukewicz, who was his mother’s guardian and a licensed attorney, to set aside $8,000 in an interest-bearing attorney trust account to pay for legal and guardianship fees. Mr. Astukewicz then applied for Medicaid benefits on behalf of his mother. The state denied the benefits, finding that the trust account was an includable asset and that Mrs. Astukewicz exceeded asset limits.

Mr. Astukewicz appealed, and the hearing officer affirmed. The hearing officer concluded that Mrs. Astukewicz had access to the funds because her guardian and son had full access to the account. Mr. Astukewicz appealed, arguing his mother could not access the funds because the probate court’s order authorized the funds to be set aside and used for legal fees.

The Massachusetts Superior Court affirmed the hearing officer’s decision. According to the court, because the probate court order merely authorized Mr. Astukewicz to set up the trust account, it did not require him to create the trust account or prohibit him from returning those funds to his mother. The court also found that:

[The hearing officer] determined that Mrs. Astukewicz could have access to those funds if Mr. Astukewicz so chose. As stated in the Division’s letter denying a rehearing, assets are countable if the applicant would be entitled to them but did not receive them because of the action or inaction of a person acting on the applicant’s behalf. [Citations Omitted] Here, [the hearing officer] opined that Mr. Astukewicz’s motion to set aside the funds-for his own benefit, as they were used to pay his attorneys fees related to representing his mother-was an action that caused Mrs. Astukewicz not to receive assets to which she was otherwise entitled. Therefore the [hearing officer] found that the client fund was a countable asset. The record shows that this determination was supported by substantial evidence and this court so finds.

The Astukewicz v. Executive Office of Health & Human Servs. case is annexed here – astukewicz-1