## Facts

- Alice and Glenn Pirie executed a joint will leaving their property to the surviving spouse, and, if neither survived, to their daughter, Elenore Gist, “in trust for her lifetime,” with remainder to their granddaughters, Susan Eral and Colleen Conrad.
- A codicil appointed Eral and Conrad as trustees; they served as trustees and remainder beneficiaries after Alice died in 1983.
- The trust authorized distributions of income and principal to Elenore “as may be necessary to provide her with a reasonable standard of living, considering any other means of support or resources which she may have.”
- The instrument contained a spendthrift clause barring trust assets from satisfaction of creditor claims, except as needed to carry out trust purposes.
- Elenore received Medicaid (Title XIX) benefits from 1995 until her death in 2006.
- After the trustees filed a final report and accounting, the Iowa Department of Human Services filed a probate claim and objected to the accounting, seeking reimbursement of $396,570.20 in medical assistance payments from trust assets.
- The trustees denied liability, asserting the spendthrift clause and arguing the trust was not reachable for Medicaid estate recovery.

## Issues

1. Whether the testamentary trust was a discretionary trust with support standards (a discretionary support trust) such that a creditor providing necessities could reach the beneficiary’s interest.
2. Whether the trust’s spendthrift clause barred the State from enforcing a Title XIX (Medicaid) reimbursement claim against the trust.
3. Whether any mismatch between Medicaid eligibility rules and Medicaid estate-recovery rules precluded recovery from the trust.

## Decision

- The Iowa Supreme Court affirmed the probate court’s order allowing the State’s claim.
- The court classified the trust as a discretionary trust with ascertainable support standards, not a purely discretionary trust.
- The court held the State could satisfy its Medicaid reimbursement claim from the trust under the common-law “necessaries” exception, notwithstanding the spendthrift clause.
- The court rejected the argument that a lack of alignment between Medicaid eligibility and estate recovery bars post-death recovery from the trust.

## Legal Principles

- A trust authorizing distributions necessary to maintain a “reasonable standard of living,” while directing consideration of the beneficiary’s other resources, creates discretionary authority constrained by support standards (a discretionary support trust).
- Spendthrift provisions generally restrict creditor access to trust interests, but do not bar claims by providers of “necessaries” supplied to the beneficiary.
- Medicaid-funded medical care may qualify as “necessaries,” permitting the State to enforce a reimbursement claim against a discretionary support trust despite spendthrift language.
- Differences between Medicaid eligibility criteria and estate-recovery mechanisms do not, by themselves, invalidate an otherwise authorized estate-recovery claim.

## Conclusion

The court held that the State could enforce Medicaid estate recovery against a discretionary support trust created for the beneficiary’s maintenance, and that the trust’s spendthrift clause and asserted eligibility-recovery mismatch did not prevent reimbursement from trust assets.


In re Estate of Gist, 763 N.W.2d 561 (Iowa 2009)