## Facts

- James R. Carlisle, an adult with severe cerebral palsy, received Minnesota medical assistance (MA) beginning in 1979, including daily home health care attendant services paid by the county.
- James operated an accounting business, but his income did not cover the costs of disability-related assistance.
- In 1985, his mother, Leona Carlisle, created and funded an inter vivos trust of approximately $125,000 naming James as the primary beneficiary.
- The trust authorized distributions only in the trustee’s full discretion for nonessential items (e.g., entertainment, education, travel, comfort, convenience, and reasonable luxuries).
- The trust expressly prohibited distributions for basic necessities (food, shelter, clothing, medical care, or other basic needs) to the extent such needs were provided, or to be provided, by a governmental unit.
- The trust directed that distributions were to supplement, not replace, public assistance, and required the trustee to consider other resources available to James.
- In 1992, Dakota County Human Services treated the trust as an “available asset” and notified James his MA benefits would be terminated.
- The district court held the trust was an available asset for MA eligibility; James appealed.

## Issues

1. Whether a discretionary supplemental-needs trust that forbids distributions for basic necessities covered by public assistance constitutes an “available asset” to the beneficiary for Minnesota medical assistance eligibility.

## Decision

- The Minnesota Court of Appeals reversed the district court.
- The court held that James Carlisle’s beneficial interest in the trust was not an available asset for MA eligibility purposes.
- Because the trustee had sole discretion and James had no enforceable right to compel distributions—especially for basic necessities—neither principal nor income was treated as available to him under the MA framework.

## Legal Principles

- For medical assistance eligibility, an asset is “available” only if the applicant has a legal ability to obtain and use the asset to meet basic maintenance needs.
- In a true discretionary trust, the beneficiary generally cannot compel distributions; the beneficiary’s interest in undistributed trust property is not treated as property the beneficiary can access as a matter of right.
- A supplemental-needs trust that (1) grants the trustee sole discretion and (2) restricts distributions to supplemental, non-basic items, while (3) prohibiting payments for basic necessities provided by governmental programs, does not make trust assets available to the beneficiary for means-tested medical assistance.

## Conclusion

The court concluded that a properly drafted discretionary supplemental-needs trust—designed to provide only extra benefits beyond governmental support and giving the beneficiary no right to force distributions—does not create an available asset that disqualifies the beneficiary from Minnesota medical assistance.


In re Leona Carlisle Trust, 498 N.W.2d 260 (Minn. Ct. App. 1993)