For years, attorneys have been advising their clients regarding the advantages for Medicaid Estate Planning by using a Irrevocable Trust. That advice usually includes transferring the client’s home into the trust but retaining a life interest in the property thereby allowing the client the use of the home until such time as they pass.
However, MassHealth has declared any life estate retained to be a “countable asset” for purposes of determining eligibility for MassHealth benefits.
Now there are two cases pending before the Supreme Judicial Court which are asking the court to reverse MassHealth’s decisions.
At oral argument, MassHealth argued that the homes remained available to the applicants and that they then counted for purposes of determining benefits.
Many believe that this is in contrast to settled Federal Medicaid law and, further, that Masshealth has allowed the use of life estates before.
It has been more than two decades since the SJC has addressed the issue.
MassHealth merely claims that they are protecting the interests of the taxpayers, avoiding, when possible, picking up the cost of nursing home care while the applicant’s heirs get the value of the transferred property.
While awaiting the outcomes of the cases, it would be prudent to review any trust you have with a qualified attorney.