Opinion
No. HHB CV 06 4012367S
October 24, 2007
MEMORANDUM OF DECISION
I. Introduction
The plaintiffs Margo F. Rome, Stephen R. Rome, and Edward C. Rome are court-appointed guardians for their mother, the plaintiff Marjorie Rome. The plaintiffs have appealed from a decision of the department of social services (department) that denied Marjorie Rome's application for Title XIX benefits, specifically, Medicaid assistance for her nursing home care. Marjorie Rome is the beneficiary of a trust established under the will of her late father, Joseph Schneider (Joseph Schneider Trust). The plaintiffs have stipulated that the income of the trust is available to Marjorie Rome. The primary issue raised by this appeal is whether the trust is a general support trust, the principal of which is available to Marjorie Rome for Medicaid eligibility purposes.
II. Factual Background
The hearing officer made the following findings of fact: "The appellant has been institutionalized at Grove Manor, a skilled nursing facility since August 1, 2005, following a stay beginning about February of 2002 at Hickory Hill Rest Home in Woodbury.
The appellant, applied through her guardians, for Title XIX Medical Assistance long-term coverage on November 2, 2005.
"On April 15, 1983 the appellant's father, Joseph Schneider was residing in her home in Natick, Massachusetts and he executed his last will and testament, which made provisions for his estate.
"The appellant's father, Joseph Schneider, passed away on February 1, 1985 in Massachusetts.
"A referral was made by the application worker to the department's resources division concerning the trust and the reply of January 9, 2006 advised that the testamentary trust must be examined under the department's policy at [Uniform Policy Manual] UPM 4030.80 as a potential counted asset or source of income and that the [Joseph Schneider Trust] provisions of Clause One and Clause Two indicate a general support trust with principal and income available for the general support of the appellant.
"On January 19, 2006, the trustee since 1995, Atty. J. Robert Casey of Goulston Storrs of Boston, MA, wrote to the application worker that he in his sole discretion had made a decision `that no further distributions of income or principal will be made to Marjorie Rome except in the case of an emergency.'
"From 1996 to 2005, the trustee distributed $178,726.88 from both the trust income and principal for the benefit of the appellant.
"On April 3, 2006 a letter was forwarded from Atty. Dost to Atty. Butler advising that the trust principal was approximately $699,282 as of December 31, 2005 and requesting that the principal not be considered `actually available' to the appellant in light of the trustee's refusal to expend the trust principal for nursing home costs of the appellant.
"A letter from Atty. Dost to the trustee on behalf of the guardians dated March 15, 2006 requested payment of the appellant's nursing home costs from the income and principal of the Joseph Schneider Trust.
"By letter of March 22, 2006 the trustee agreed to pay `the ordinary income generated by the trust assets' to the appellant, but refused to pay principal.
"The appellant was designated the primary beneficiary of a trust fund established by her father through his will dated April 15, 1983 and effective upon his death on February 1, 1985.
"Per Clause Two, Part A and A1 of his last will and testament, the appellant's father established a trust from his estate for the benefit of his daughter, the appellant, named a trustee and then stated that: `The Trustee shall pay over to my daughter during her lifetime — or until the trust of the fund is sooner terminated by the complete distribution of the assets thereof — the net income or part or so much thereof as the trustee may, in his sole discretion, consider necessary or advisable for her best interest and general welfare, the Trustee being hereby authorized and empowered, in his sole discretion, to pay out of the principal of the Trust Estate such additional amounts as he may deem necessary or advisable for her best interest and general welfare, even to the extent of exhausting the entire Trust Estate, if that, in the sole discretion of the Trustee, should be considered necessary or advisable.
"Per Clause Two, Section C of the father's will, the phrase `best interest and general welfare' is deemed to include `the comfort, maintenance, recreation and support of the beneficiary.'
"The clearly expressed intent of the testator in establishing a substantial trust was to provide for his daughter's general support and the entire principal and income of the trust may be spent by the trustee for her benefit.
"Although the trustee has made distributions from income and principal for the support of the appellant from 1996 to 2005, his 2006 refusal to provide for the appellant's support upon her nursing home admission from the trust principal is an abuse of the trustee's discretion provided in the trust, in light of the trust terms, the expressed intent of the trust, the substantial nature of the trust and the history of support distributions made from trust principal and income." (Return of Record [ROR], Notice of Decision, pp. 2-5.)
III. Standard of Review
Judicial review of an appeal taken under the Uniform Administrative Procedure Act (UAPA) is limited by General Statutes § 4-183(j), which provides, in relevant part: "The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court shall affirm the decision of the agency unless the court finds that substantial rights of the person appealing have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (1) In violation of constitutional or statutory provisions; (2) in excess of the statutory authority of the agency; (3) made upon unlawful procedure; (4) affected by other error of law; (5) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or (6) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion."
Our Supreme Court has summarized the circumscribed scope of judicial review of an administrative appeal as follows: "With regard to questions of fact, it is [not] the function of the trial court . . . to retry the case or to substitute its judgment for that of the administrative agency . . . Judicial review of the conclusions of law reached administratively is also limited. The court's ultimate duty is only to decide whether, in light of the evidence, the [agency] has acted unreasonably, arbitrarily, illegally, or in abuse of its discretion . . . Conclusions of law reached by the administrative agency must stand if the court determines that they resulted from a correct application of the law to the facts found and could reasonably and logically follow from such facts." (Citations omitted; internal quotation marks omitted.) Cadlerock Properties Joint Venture L.P. v. Commissioner of Environmental Protection, 253 Conn. 661, 668-69, 757 A.2d 1 (2000), cert. denied, 531 U.S. 1148, 121 S.Ct. 1089, 148 L.Ed.2d 963 (2001).
In the case of Corcoran v. Dept. of Social Services, 271 Conn. 679, 859 A.2d 533 (2004), our Supreme Court stated the applicable standard of review for administrative appeals involving the construction of a trust instrument, and is entirely on point with respect to the analysis that the court is to undertake. It is therefore quoted at length:
"We begin by setting forth our applicable standard of review. Resolution of [the appeal] requires [the court] to determine whether the hearing officer properly construed the terms of the trust instrument. `The construction of a will presents a question of law.' Canaan National Bank v. Peters, 217 Conn. 330, 335, 586 A.2d 562 (1991). As we previously have stated, `[w]ith respect to questions of law, [w]e have said that [c]onclusions of law reached by the administrative agency must stand if the court determines that they resulted from a correct application of the law to the facts found and could reasonably and logically follow from such facts.' Board of Education v. Commission on Human Rights Opportunities, 266 Conn. 492, 504, 717 A.2d 1276 (2003). This court has stated that, `[u]nder applicable federal law, only assets actually available to a medical assistance recipient may be considered by the state in determining eligibility for public assistance programs such as Title XIX [Medicaid] . . . A state may not, in administering the eligibility requirements of its public assistance program pursuant to Title XIX . . . presume the availability of assets not actually available . . .' Zeoli v. Commissioner of Social Services, 179 Conn. 83, 94, 425 A.2d 553 (1979).
"This principle `has served primarily to prevent the States from conjuring fictional sources of income and resources or imputing financial support from persons who have no obligation to furnish it or by overvaluing assets in a manner that attributes nonexistent resources to recipients.' Heckler v. Turner, 470 U.S. 184, 200, 105 S.Ct. 1138, 84 L.Ed.2d 138 (1985). `For the purposes of determining eligibility for the Medicaid program, an available asset is one that is actually available to the applicant or one that the applicant has the legal right, authority or power to obtain or to have applied for the applicant's general or medical support. If the terms of a trust provide for the support of an applicant, the refusal of a trustee to make a distribution from the trust does not render the trust an unavailable asset.' General Statutes § 17b-261(c).
"For Medicaid purposes, general support trusts are considered available because a beneficiary can compel distribution of the trust income. See General Statutes § 52-321. In other words, the beneficiary has a `legal right . . . to obtain' the funds. See General Statutes § 17b-261(c). Conversely, supplemental needs trusts, in which a trustee retains unfettered discretion to withhold the income, are not considered available to the beneficiary. Connecticut Bank Trust Co. v. Hurlbutt, 157 Conn. 315, 327, 254 A.2d 460 (1968) (spendthrift trust not open to alienation or assignment by anyone until income paid over to beneficiary); Bridgeport-City Trust Co. v. Beach, 119 Conn. 131, 141, 174 A. 308 (1934) (beneficiary may not alienate or assign interest of spendthrift trust).
"It is well settled that in the construction of a testamentary trust, the expressed intent of the testator must control. This intent is to be determined from reading the instrument as a whole in the light of the circumstances surrounding the testator when the instrument was executed, including the condition of his estate, his relations to his family and beneficiaries and their situation and condition. Gimbel v. Bernard F. Alva B. Gimbel Foundation, Inc., 166 Conn. 21, 26, 347 A.2d 81 (1974). Therefore, in determining whether the assets of a testamentary trust are available to a beneficiary, this court considers whether the testator intended to create a supplemental needs trust or a general support trust. See Zeoli v. Commissioner of Social Services, supra, 179 Conn. 91-92." Corcoran v. Dept. of Social Services, supra, 271 Conn. 698-700.
IV. Discussion Construction of the Trust
It is the plaintiffs' position that the trustee of the Joseph Schneider Trust is endowed with a degree of discretion that allows him to refuse to distribute principal of the trust for the support of Marjorie Rome. Consequently, they maintain the trust principal is not an asset that is actually available to Marjorie Rome. They rely on Zeoli v. Commissioner of Social Services for the proposition that the "state may not . . . presume the availability of assets not actually available" for Medicaid eligibility purposes. The plaintiffs' position overlooks the explicit language of General Statutes § 17b-261(c), which was enacted after Zeoli by Public Acts, Spec. Sess., June 2001, No. 01-2, § 3. That subsection states in part, "the refusal of a trustee [of a general support trust] to make a distribution from the trust does not render the trust an unavailable asset." Furthermore, in making this claim, the plaintiffs have overstated the level of discretion that was reposed in the trustee.
The plaintiffs argue that the trust is not a general support trust because the trust instrument allows the trustee to withhold payments of principal. For support for this position they point to language of the trust and the surrounding circumstances at the time of its execution. They note that Clause Two (A)(1), which outlines the trustee's responsibilities, states that the "Trustee shall pay over to [Marjorie Rome] . . . the net income or part or so much there of as the Trustee may, in his sole discretion consider necessary or advisable for her best interest and general welfare . . ." (Emphasis added.) ROR, Joseph Schneider Trust, pp. 39-40. They further note that with regard to the principal of the trust, "the Trustee [is] authorized and empowered, in his sole discretion, to pay out of the principal of the Trust Estate such additional amounts as he may deem necessary or advisable for [Marjorie Rome's] best interest and general welfare . . ." (Emphasis added.) ROR, Joseph Schneider Trust, p. 40. They argue that in the absence of words of direction, such as "shall," the testator has granted to the trustee a degree of discretion that allows him to withhold payments of principal, so as to make the principal of the trust "unavailable" for Medicaid purposes.
This nice distinction between "shall," regarding income, and "authorized and empowered," regarding principal, overlooks the fact that the instructions to the trustee concerning payments of income and principal are all contained in one sentence. That sentence sets forth the overarching purpose of the trust, which is to provide for Marjorie Rome's best interest and general welfare. In the context of the instructions, the word "authorized" cannot be viewed in isolation and must be considered to reflect the testator's intent and direction to provide for Marjorie Rome's best interest and general welfare. The plaintiffs' construction also minimizes the testator's authorization to pay amounts of principal for the best interest and general welfare of the beneficiary "even to the extent of exhausting the entire Trust Estate." ROR, Joseph Schneider Trust, p. 40.
Additional language in the instrument does not help the plaintiffs. Clause Two (C) of the Joseph Schneider Trust states: "The phrase `best interest and general welfare,' whenever used in this will, shall be interpreted and applied in the broadest possible sense, absolute reliance being reposed, in this respect, in the discretion of the trustee then acting hereunder; and it shall be deemed to include, but without in any way limiting the generality of the foregoing, the comfort, maintenance, recreation and support of the beneficiary." ROR, Joseph Schneider Trust, p. 42. This language, and language in Clause Two (A)(1), clearly expresses the testator's intent to establish a general support trust reposing sole discretion in the trustee. This level of discretion is similar to the one involved in the Corcoran case where the testator granted the trustee "sole discretion." See Corcoran v. Dept. of Social Services, supra, 271 Conn. 701-02.
As noted earlier, plaintiffs rely on Zeoli v. Commissioner of Social Services to support their claim that the trust principal is not available to Marjorie Rome. In Zeoli, the court found that the trust at issue was not actually available because it was a supplemental needs trust. Zeoli v. Commissioner of Social Services, supra, 179 Conn. 96. The Corcoran court discussed the holding of Zeoli when it analyzed the trust before it. It noted: "In Zeoli, the trust instrument was replete with references to the `absolute and uncontrolled discretion' afforded the trustees in their decision making process . . . In addition to the overt references to the unfettered discretion of the trustees, the court in Zeoli deemed the provision authorizing the trustee to discriminate among the beneficiaries when making distributions highly probative of the vast level of discretion the testator intended to confer upon the trustee . . . In the present case, however, the testator created the trustees `sole discretion' to make distributions and provided them with factors to consider when making `discretionary distributions . . .'
"This language is not as strong as that used in Zeoli and suggests that the testator in the present case intended to confer a lessor amount of discretion." Corcoran v. Dept. of Social Services, supra, 271 Conn. 701-02. Unlike the trust in Zeoli, the Joseph Schneider Trust does not contain overt references to absolute, uncontrolled, or unfettered discretion which would manifest an intent to establish a supplemental needs trust.
The plaintiffs point to the language in Clause Two (C) wherein the testator stated that in interpreting best interest and general welfare, "absolute reliance being reposed, in this respect, in the discretion of the Trustee . . ." The plaintiffs interpret "absolute reliance" as an equivalent for absolute discretion or uncontrolled discretion, which level of discretion is a hallmark of a supplemental needs trust. This interpretation, again, ignores the context of the words in the sentence. The one sentence that comprises Clause Two (C) directs that "the phrase `best interest and general welfare' . . . shall be interpreted in the broadest possible sense, absolute reliance being reposed, in this respect, in the discretion of the Trustee . . ." It is clear that it is the testator who is absolutely relying on the trustee to interpret the clause in the broadest possible sentence for the benefit of the beneficiary. The testator is not granting the trustee absolute and uncontrolled discretion to refuse to fulfill the terms of the trust.
The language in the trust is similar to the language used in the Corcoran trust to instruct the trustee. In Corcoran, the trustees were to expend for the beneficiary "so much of the net income and principal of [the] Trust as the Trustees, in their sole discretion, shall deem proper for her health, support in reasonable comfort, best interests and welfare . . ." (Emphasis in original.) Corcoran v. Dept. of Social Services, supra, 271 Conn. 703. As noted earlier, Joseph Schneider in Clause Two (C) provided specific factors for the trustee to consider when interpreting the best interest and general welfare of Marjorie Rome, including her " comfort, maintenance, recreation and support . . ." (Emphasis added.) ROR, Joseph Schneider Trust, p. 42. The language used by Joseph Schneider, like the language in the Corcoran trust, provides an ascertainable standard that establishes and limits the trustee's discretion. The consequence of this standard is discussed below.
This court cannot conclude that the language used by the testator expresses an intent to provide only for Marjorie Rome's supplemental needs. The language utilized in the trust is similar to the language utilized in the Corcoran trust and expresses "the testator's unambiguous intent to create a general support trust . . ." Corcoran v. Dept. of Social Services, supra, 271 Conn. 701.
The plaintiffs correctly note that the court must construe the trust instrument in the light of the circumstances surrounding the testator when the instrument was executed. In this light, they maintain, the court should not see a general support trust, but one for supplemental needs. The hearing officer did not make many findings regarding the existing circumstances. The hearing officer did note that Joseph Schneider was residing in his daughter's home when he executed his last will and testament on April 15, 1983. It was also found that Marjorie Rome's children were appointed guardians of her person and her estate in Massachusetts on November 15, 1990, and then appointed as conservators of the person and estate in Connecticut in June of 2006. There was no evidence that Marjorie Rome had a conservator at the time of the execution of the will in 1983 or before the first appointment in November of 1990. There was evidence before the hearing officer that Marjorie Rome suffered from bipolar disorder since 1960 and was frequently hospitalized prior to the execution of the Joseph Schneider will.
The plaintiffs argue that the facts of this case are similar to the facts of the case of Bridgeport v. Reilly, 133 Conn. 31, 47 A.2d 865 (1946). In that case the testator established a trust for the benefit of an individual who was institutionalized at the time of the execution of the trust. Id., 38. The Supreme Court found that had the testator intended that the principal and income from the trust be used to make payments for the beneficiary's institutionalization, it would have been natural for him to have so directed. Id., 38-39. The plaintiffs submit that had Joseph Schneider intended for the principal to be used for Marjorie Rome's nursing home care, he would have directed his trustee to make such payments.
Reilly is not apposite because it discusses the rights of a creditor to claim an abuse of discretion by the trustee for not supporting a beneficiary; it does not address the availability to a beneficiary of trust funds for Medicaid eligibility purposes. Furthermore, the Corcoran court noted, "[t]his court considers the rights of a trust beneficiary to be distinct from the rights of the beneficiary's creditor." Corcoran v. Dept. of Social Services, supra, 271 Conn. 696.
Additional facts presented at the hearing argue against a determination that this trust is only for supplemental needs. Joseph Schneider moved into Marjorie Rome's home in 1981 and resided with her until his death in 1985. ROR, Transcript of June 26, 2006, pp. 635-36. Marjorie Rome continued to live in her home until 1990. ROR, Transcript of June 26, 2006, p. 637. She was also employed by her father's law firm, covered by health insurance, until 1995. ROR, Transcript of June 26, 2006, p. 645. This situation is a far cry from the one in Reilly where the beneficiary of the trust had been in a state institution for the insane for twelve years prior to the ratification of the trust document.
The amount that was placed in trust for Marjorie Rome's benefit does not suggest a trust for supplemental needs, but one for general support. Although the amount that initially funded the trust was not established at the hearing, the record indicates that as of Dec 31, 1988, three years after Joseph Schneider's death, the trust had an inventory value of $509,039.37. ROR, Letter of Mark W. Dost, April 3, 2006, p. 61. The hearing officer noted that the department's regulations are contained in the Uniform Policy Manual (UPM). UPM § 4030.80(B)(4) states: "The department considers the following factors in determining whether the trustee would be abusing his or her discretion by refusing to distribute trust principal to the individual:
"[T]he value of the trust created, with a high dollar value tending to indicate an intent to provide for general or medical support."
The plaintiffs also note that Joseph Schneider had a close relationship to Marjorie Rome's children, who are named as remaindermen upon the death of Marjorie Rome. They argue that this provides authority for the trustee to exercise his discretion to preserve the principal of the trust for the remaindermen. The spotlight upon this specific fact is dimmed by the express intention stated by Joseph Schneider in Clause Four of the trust. In that clause the testator explains that he intentionally has omitted making a provision of his son Robert Lawrence Schneider, and Robert's children, because the testator previously made substantial provision for Robert. The testator gives an additional reason for not providing for his son: "because I feel that the well being of my daughter, Marjorie Joan Rome, is entitled to my first consideration." ROR, Joseph Schneider Trust, p. 44. If Joseph Schneider intended to preserve the trust principal for Marjorie Rome's children, it would have been natural for him to split the trust estate into separate shares, one for the benefit of Marjorie Rome and one for her children.
Also, if the testator intended to preserve assets for the remaindermen, he could have given express direction to the trustee to consider the availability of other sources of support, such as Medicaid, which he did not do. The Supreme Judicial Court of Massachusetts recently stated:
"While intent is the lodestar of testamentary construction, it cannot be used to displace what a will has said. Likewise, it cannot be used to supply a missing clause or to permit speculation as to what the testatrix might have intended had she foreseen or contemplated events as they actually turned out, but for which she made no provision." (Internal quotation marks omitted.) Hochberg v. Proctor, 441 Mass. 403, 413, 805 N.E.2d 979 (2004).
Available Assets
Having determined that the trust is a general support trust, the court must determine if it is an available asset which would affect Marjorie Rome's eligibility for the Medicaid program. Assets held in trust are considered available if the beneficiary has the legal right to compel distributions. Corcoran v. Dept. of Social Services, supra, 271 Conn. 699. In Connecticut, the case of Kolodney v. Kolodney, 6 Conn.App. 118, CT Page 17853 503 A.2d 625 (1986), holds that a beneficiary of a trust that contains an ascertainable standard of support may compel a trustee to exercise his discretion in accordance with that standard. Id., 121. The Joseph Schneider Trust expressly provides that it must be interpreted under the laws of Massachusetts.
The leading Massachusetts case dealing with court control of a trustee of a discretionary trust, which provides for the support of a beneficiary, is Copp v. Worcester County National Bank, 347 Mass. 548, 199 N.E.2d 200 (1964). In that case, the Supreme Judicial Court of Massachusetts held: "The power which is given to the trustee is not unrestricted, for a court of equity may control a trustee in the exercise of a fiduciary discretion if it acts beyond the bounds of a reasonable judgment or unreasonably disregards usual fiduciary principles, or the purposes of the trust, or if it fails to observe standards of judgment apparent from the applicable instrument." (Emphasis added.) Id., 551.
As noted earlier, the plaintiffs claim the trustee was justified in withholding principal payments to Marjorie Rome in order to preserve the estate for the remaindermen. The Supreme Judicial Court dealt with a similar situation in the case of Old Colony Trust Co. v. Rodd, 356 Mass. 584, 254 N.E.2d 886 (1970). The court observed: "It is clear from the will that the gift of the remainder was of minor significance. And yet it would appear that the trustee regards the disposition of the remainder as the dominant purpose of the trust." Id., 589. The amounts paid by the trustee to the beneficiaries were described by the court as `parsimonious.' Id., 588. Citing to Copp, the Court stated: "A court of equity may control a trustee in the exercise of a fiduciary discretion if it fails to observe standards of judgment apparent from the applicable instrument. . . It is our view that, whether due to misuse of discretion or to misconception of the purpose of the trust on the part of the trustee, several of the intended primary beneficiaries of the trust are not receiving that which the settlor intended they should receive and which the trustee has the means to provide: "comfortable support and maintenance." (Citation omitted.) Id., 589.
As stated earlier, Corcoran informs that: "For Medicaid purposes, general support trusts are considered available because a beneficiary can compel distribution of the trust income . . . In other words, the beneficiary has a `legal right . . . to obtain' the funds." (Citation omitted.) Corcoran v. Dept. of Social Services, supra, 271 Conn. 699-700. The court concludes that under the holding of Copp, and Old Colony Trust, Marjorie Rome, as beneficiary of the Joseph Schneider Trust, would have the legal right to obtain principal payments in the event a parsimonious trustee did not provide for her best interest and general welfare as defined in the trust instrument.
The applicable law regarding the trust instrument, and the facts of this case, support the hearing officer's conclusion that the Joseph Schneider Trust was a general support trust for the benefit of Marjorie Rome. There is also support for the conclusion that the principal of the trust was an available asset which disqualified her from Medicaid benefits. Just as states cannot "conjur[e] nonexistent resources to recipients," applicable law does allow trust language to be parsed, and particular facts overemphasized, in order to make available resources disappear.
Criteria for Title XIX Eligibility
The plaintiffs also claim that the department's decision seeks to establish criteria for Title XIX eligibility that are more restrictive than criteria employed in determining an applicant's eligibility under the Supplemental Security Income (SSI) program, in violation of 42 U.S.C. §§ 1396a(a)(10)(C)(I)(III) and 1396a(2). The plaintiffs maintain that General Statutes § 17b-261(c), and the department's regulations that construe the statute, are invalid under the supremacy clause, U.S. Const. Art. VI § 2, or under a private right of action under 42 U.S.C. § 1983. Without deciding the applicability of 42 U.S.C. § 1983 and/or the supremacy clause, the court has considered the arguments and law submitted by the plaintiffs and concludes that the methodology employed by the department in this case is not more restrictive than the methodology employed by the SSI program.
A succinct explanation of the interrelationship between the eligibility requirements of Title XIX, Medicaid, and SSI is set forth in a recent United States District Court case, Brown v. Day, 434 F.Sup.2d 1035 (D.Kan. 2006). The court stated: "In determining income and resource eligibility for Medicaid, states may not employ a methodology which renders an individual ineligible for Medicaid where that individual would be eligible for SSI. See 42 U.S.C. § 1396a(2)(A)(1). In addition, states must use reasonable standards for determining eligibility which only take into account income and resources which are available to the recipient and which would not be disregarded in determining eligibility for SSI. 42 U.S.C. § 1396a(a)(17). For SSI purposes, if an individual has no authority to liquidate a property right, it is not considered an `available resource.' 20 C.F.R. § 416.1201(a)(1). Social Security Administration guidance further explains that a trust is an `available resource' only if the beneficiary has the legal authority to compel the use of trust assets for her own support and maintenance. See Social Security Administration, Program Operating Manual System (`POMS') § S01120.200(D)(2)." Brown, 434 F.Sup.2d at 1037-38.
The plaintiffs here state in their brief: "[General Statutes] § 17b-261 and UPM § 4030.80 are invalid in that they consider as available to the applicant the assets of a testamentary trust that the trustee has refused in good faith to make available to the applicant. Regardless of whether the trustee's good-faith action is or is not an abuse of discretion, under the SSI program, if the applicant does not have the authority to revoke the trust or direct distribution of assets, the trust is not available. The state may not use more restrictive criteria to determine Medicaid eligibility." Pl. Br., p. 35.
The essence of the plaintiffs' argument is that Marjorie Rome's beneficial interest in the Joseph Schneider Trust is not an available resource that would disqualify her from SSI benefits, and because the methodology employed by the defendant disqualifies her from Medicaid, it is more restrictive, and thus invalid.
A review of the language used in the rules and regulations formulating the SSI methodology do not support the plaintiffs' position. The definition for resources, for SSI purposes, is contained in 20 C.F.R. § 416.1201(a) which provides: "Resources; defined. For purposes of this subpart L, resources means cash or other liquid assets or any real or personal property that an individual (or spouse, if any) owns and could convert to cash to be used for his or her support and maintenance.
"If the individual has the right, authority or power to liquidate the property or his or her share of the property, it is considered a resource. If a property right cannot be liquidated, the property will not be considered a resource of the individual (or spouse)."
This "right, authority, or power to liquidate" property standard is almost identical to the language in General Statutes § 17b-261(c) which defines an available asset as "one that . . . the applicant has the legal right, authority or power . . . to have applied for the applicant's general or medical support." Since the review standards for determining assets and property are similar, the court cannot find Connecticut Medicaid eligibility methodology to me more restrictive than the SSI methodology.
The plaintiffs stress that for Marjorie Rome's trust interest to be a resource for SSI purposes, 20 C.F.R. § 416.120(a)(1) requires Marjorie Rome be able to "liquidate" the trust interest, which they claim she cannot do, hence it is not a resource. The plaintiffs' over reliance on the word "liquidate" is called into question by the Social Security Administration's Program Operations Manual System (POMS). In the manual, § SI01120.200(A)(1) states in part: "Property held in a trust may or may not be considered a resource for SSI purposes." Section SI01120.200(D) of the manual, entitled "Policy — Trusts as Resources," states: "If an individual (claimant, recipient, or deemor) . . . can direct the use of the trust principal for his/her support and maintenance under the terms of the trust, the trust principal is a resource for SSI purposes." (Emphasis added.) It is significant that the manual contains a "Case Processing Alert" at § SI01120.200(A)(3) which states in part: "Trusts are often complex legal arrangements involving State law and legal principles that a claims representative (CR) may not be able to apply without legal counsel. Therefore, the following instructions may only be sufficient for you to recognize that an issue is present that should be referred to your regional office (RO) for possible referral to the Regional Chief Counsel."
In the event that Marjorie Rome applied for SSI benefits, it is reasonable to conclude that SSI methodology would bring about an inquiry as to her legal rights under the subject trust, which would lead to the Copp and Old Colony Trust cases that have informed this court. As stated earlier, if it were necessary, the holding of these cases could be utilized by Marjorie Rome, in the proper forum, to compel payments by the trustee to comply with standards of support contained in the trust. Otherwise stated, in necessary and appropriate circumstances, Marjorie Rome can direct the use of the trust for her support.
The cases cited by the plaintiffs holding that a more restrictive methodology was employed to count "unavailable" resources are distinguishable. In Brown v. Day, the trust at issue was clearly a supplemental needs trust. In Hecker v. Stark County Social Service Board, 527 N.W.2d. 226 (N.D. 1994), the trust was found to be a special needs or supplemental needs trust.
V. Conclusion
The court finds that the facts found by the hearing officer are supported by substantial evidence in the record. In light of that substantial evidence, the court also finds that the hearing officer's conclusions of law resulted from a correct application of the law to the facts found and could reasonably and logically follow from such facts. Finally, the court concludes that the department has not acted unreasonably, arbitrarily, illegally, or in abuse of its discretion by denying Marjorie Rome's application for Title XIX benefits.
For the foregoing reasons, the appeal is dismissed.