Massachusetts Supreme Judicial Court holds that the retention of the right to live in a home transferred to an irrevocable trust does not render the home an “asset” for Medicaid purposes

On May 31, 2017, the Supreme Judicial Court of Massachusetts reversed and remanded two cases involving determinations of eligibility for long-term care assistance under the Massachusetts Medicaid program (MassHealth). Nadeau v. Director of the Office of Medicaid and Daley v. Secretary of the Executive Office of Health and Human Services, SJC 12200 and 12205, May 31, 2017. 

The two cases raised the issue of whether the fact that the individuals retained the right to use and occupy the homes, which they had placed in an irrevocable trust more than five years prior to applying for entry into a nursing home under MassHealth, rendered the value of the homes an “available” asset pursuant to the Massachusetts regulation at 130 Code Mass. Regs., section 520.023 (C)(1)(d). 

A hearing officer of MassHealth held that the Massachusetts regulation in question required the homes to be considered an “available” asset and the Massachusetts lower courts agreed with this result.  But the Supreme Judicial Court held that “simply because the terms of the trust give the grantors the right of use and occupancy of the home” does not make the home “available” as an asset under Federal Medicaid requirements, which controls the situation.