## Facts

- Several Medicaid applicants were beneficiaries of irrevocable trusts funded with their own assets or a spouse’s assets and sought long-term care benefits through Massachusetts’ Medicaid program.
- Mary Cohen (1983 trust) transferred assets to an irrevocable trust granting the trustee complete discretion to distribute income and principal to her, while also attempting to restrict distributions that would affect public-benefits eligibility.
- Lillian and Sydney Comins (mid-1980s/1990 arrangements) placed their home in trust for their benefit; upon institutionalization, the trustee could pay for certain benefits and services not otherwise available from public programs, with language aimed at avoiding Medicaid disqualification.
- Mary Kokoska (1983 trust, created by conservator) funded a trust permitting discretionary use of income and principal to supplement Medicaid and provide broadly for her care and support, also including eligibility-preservation language.
- The Division of Medical Assistance treated the trusts’ assets as “available” resources and denied or limited Medicaid eligibility.
- The Superior Court affirmed the agency, treating as available the maximum amount that could be distributed under any circumstances.

## Issues

1. Whether the irrevocable self-settled or spouse-settled trusts were “Medicaid qualifying trusts” under 42 U.S.C. § 1396a(k) (pre-1993).
2. If the trusts were Medicaid qualifying trusts, whether “available” resources equal zero due to eligibility-preservation clauses or instead equal the greatest amount the trustee could distribute under any circumstances.

## Decision

- The court held that the trusts were “Medicaid qualifying trusts” under 42 U.S.C. § 1396a(k).
- The court held that “available” resources include the greatest amount the trustee could distribute to or for the beneficiary under any circumstances permitted by the trust instrument.
- Clauses designed to prevent distributions that would cause Medicaid ineligibility did not reduce the amount deemed available.
- The judgments for the Commissioner were affirmed.

## Legal Principles

- Under 42 U.S.C. § 1396a(k) (as then in effect), a trust established by an individual (or the individual’s spouse) is a Medicaid qualifying trust if the individual may receive payments in the trustee’s discretion.
- For a Medicaid qualifying trust, the amount treated as available to the beneficiary is the maximum amount that could be paid to or for the beneficiary under any circumstances allowed by the trust terms.
- Trust provisions conditioning or restricting distributions based on preserving Medicaid eligibility do not prevent application of § 1396a(k) and do not lower the maximum amount deemed available.

## Conclusion

The court affirmed denial or limitation of Medicaid benefits because the applicants’ discretionary irrevocable trusts were Medicaid qualifying trusts and the maximum distributable trust income and principal were countable as available resources despite provisions attempting to preserve eligibility.


Cohen v. Comm'r of the Div. of Med. Assistance, 423 Mass. 399, 668 N.E.2d 769 (Mass. 1996)