A New York appeals court rules that a Medicaid applicant's trust is an available asset because the trust instrument gave the trustee too much discretion in the distribution of the trust principal after the trustee had used a home equity line secured by a trust asset to pay for the applicant's expenses. In the Matter of Pugliese v. Zucker (N.Y. Sup. Ct., App. Div., 4th Dept., No. 784 TP 19-00440, Oct. 4, 2019).
Anthony Pugliese was the beneficiary of a trust for which his son was the trustee. His son used a home equity line secured by a trust asset to pay Mr. Pugliese's living and caregiving expenses, which depleted much of the trust's value. Mr. Pugliese applied for Medicaid, but the state found that the trust was an available asset and denied him benefits.
Mr. Pugliese appealed, arguing that his son no longer wished to use his discretion as trustee to make distributions to Mr. Pugliese. The state affirmed the decision, and Mr. Pugliese appealed to court.
The New York Supreme Court, Appellate Division, Forth Department, affirms, holding that the trust was an available asset because "the trust instrument gave the trustees broad discretion in the distribution of the trust principal, including for [Mr. Pugliese's] benefit."
For the full text of this decision, go to: https://www.nycourts.gov/courts/ad4/clerk/Decisions/2019/10-04-19/PDF/0784.pdf
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