A trigger trust, in the Medicaid-trust world, is one in which access to trust funds is removed once a triggering event occurs, such as the grantor entering a nursing home. Since the Omnibus Budget Reconciliation Act of 1993, trigger trusts are not allowed for Medicaid planning, as such trust would violate the any circumstances rule of 42 U.S. Code § 1396p(d)(3)(B). However, in a new case out of Connecticut, a court analyzes whether a trigger trust keeps trust assets from being counted for Medicaid eligibility purposes. Let’s take a look at the facts and see how the court analyzes the case.

Antonio and Antoinetta, husband and wife, established a Declaration of Trust in 2001. Per the terms of the trust, each grantor had the right to withdraw his or her portion of trust property only if the pertinent grantor was “alive and competent”. In the event a grantor was not competent, the trust could not be revoked and trust assets could not be accessed, not even by the grantor’s legal representative.

As attorneys, we are in a fiduciary role and must be honest and fair with our clients. Our clients trust us with their lives, their families, and their savings. Hopefully, you don’t need to be told to not steal money from your clients because it is obviously egregious. But when a case comes out about an attorney who lost his way, it can serve as a reminder to keep us on our ethical toes.

An attorney out of Salt Lake City, Mr. Curtis, was just sentenced to 97 months in federal prison and assessed with almost $13 million dollars in restitution. The prosecuting team initially had reached a plea deal with Mr. Curtis for 6 years in prison, but the judge rejected those terms as unreasonable. Mr. Curtis plead guilty to wire fraud and money laundering. The clients he was charged with committing these crimes against were elderly or disabled folks.

A big part of elder law is helping clients get eligible for Medicaid since that government program has strict rules about an applicant’s assets, income, and prior transfers. There are a variety of legal strategies to employ to meet the eligibility rules and obtain long-term care benefits. However, is submitting a seemingly one-sided consent judgment a viable strategy? Can the judge reject the consent judgment because Medicaid qualification might be a motivating factor for the parties? This issue was recently litigated in Michigan.