A Washington appeals court rules that a testamentary trust that named a Medicaid applicant as the beneficiary is an available asset because the applicant retained some control over the trust and because the funds in the trust came from either herself or her husband. Matter of Estate of Berto v. State (Wa. Ct. App., Div. 3, No. 33591-7-111, July 19, 2016).
Margaret Berto's husband died, leaving a testamentary trust that named Ms. Berto as co-trustee and the only beneficiary. The trust allowed for distributions at the discretion of the trustees, but provided that Ms. Berto could not be the sole trustee and could not solely determine distributions. Ms. Berto sold her home and deposited some of the proceeds in the testamentary trust.
Ms. Berto applied for Medicaid, and the state counted the trust as an available asset and denied Ms. Berto benefits. Ms. Berto appealed to court, arguing that the trust was not an available asset because she had limited control over it and there were restrictions on distributions.
The Washington Court of Appeals affirms the state's decision, holding that the trust is an available asset. The court rules that the trust does not fall under any of the exemptions for trusts in the state Medicaid regulations because "Ms. Berto had some control over the trust and all of the funds came from either her husband or herself."
For the full text of this decision, go to: https://www.courts.wa.gov/opinions/pdf/335917.pub.pdf
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