Guerriero v. Commissioner of the Division of Medical Assistance

Summary

The Massachusetts Supreme Judicial Court held that assets in an irrevocable self-settled trust could not be counted as available resources for Medicaid eligibility after the beneficiary executed an irrevocable waiver of her equitable interest. Although the lower court relied on a 1993 amendment to the federal Medicaid statute that did not apply to the 1987 trust, the court affirmed on the ground that the waiver legally deprived the trustee of discretion to distribute principal to the beneficiary.

Holdings

1. The 1993 amendments to the Medicaid statute applied only prospectively to trusts created after the effective date of the amendments; therefore, Guerriero's 1987 trust was governed by the earlier version of 42 U.S.C. § 1396a(k).
2. After the trustee received notice of Guerriero's irrevocable waiver, the trustee had no legal discretion to distribute trust principal to Guerriero.
3. The trust principal was not an available resource for Guerriero because her irrevocable waiver completely deprived the trustee of discretion to pay any principal to her.
4. Guerriero retained the capacity, as a beneficiary, to transfer her equitable interest in the trust principal, and her waiver of settlor rights did not waive that separate beneficiary right.

Questions Presented

1. Whether the 1993 amendments to the Medicaid statute, including 42 U.S.C. § 1396p(d)(3)(B)(ii), governed a trust created in 1987.
2. Whether, under the pre-1993 Medicaid qualifying trust statute, Guerriero's irrevocable waiver of her beneficial interest deprived the trustee of any legal discretion to distribute trust principal to her.
3. Whether the trust principal was an available, countable resource for purposes of Guerriero's Medicaid eligibility.

Disposition

affirmed