Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, April 15, 2014

Disclaimer by a Beneficiary Is a Transfer for Medicaid Purposes


The testator’s will created a trust for his surviving spouse giving her income for life and authorizing the trustee to invade principal for the surviving spouse and their issue for health, education, maintenance, and support.  The trust also gave the trustee the power to terminate the trust should further administration become impractical.  On termination, the trustee was to pay the trust property to the income beneficiary.  The trustee terminated the trust under this provision and the surviving spouse then renounced any interest in the trust property which was delivered directly from the trust to the couple’s son and daughter.  The surviving spouse applied for Medicaid benefits approximately 13 months after the termination of the trust.  In a case of first impression, a Pennsylvania court upheld a determination by an administrative law judge disqualifying the spouse from benefits for a period of time, holding that the renunciation was a transfer of assets for Medicaid purposes.  Schell v. Department of Public Welfare, 80 A.3d 844 (Pa. Commw. Ct. 2013).

Special thanks to William LaPiana (Professor of Law, New York Law School) for bringing this case to my attention.


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