MHL ARTICLE 81 - New York State Unified Court System

incapacitated; unlikely to regain capacity; she has no dependents and her needs will be
accommodated by Medicaid and reserving funds for the penalty period; and the court resolved the
question of IP’s testamentary intent by looking to her Totten trusts that name proposed donees as
beneficiaries.
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Matter of Elsie B. (Lerner), 265 A.D.2d 146; 707 N.Y.S.2d 695 (3 Dept., 2000)
Court can empower guardian under MHL §81.21 to authorize guardian to exercise right retained by
IP as settlor of revokable intervivos trust to modify trust by adding co-trustees.
(ii) Medicaid Planning trusts: Supplemental Needs/Pooled Trusts
a. Funds that can be placed into trust
(i) Personal injury awards/own funds
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Matter of Woolworth, 76 A.D.3d 160; 903 N.Y.S.2d 218 (App. Div., 4 Dept)
The Appellate Division, Fourth Department, reversed an Order of the Surrogate’s Court which
denied so much of the petition of a disabled medicaid recipient as sought to establish an SNT to be
funded with her entire share of the settlement proceeds of her action seeking damages for her
husband’s wrongful death ($283,438.30). Ruling that he was only willing to approve an SNT to the
extent that it would be funded with $100,000, the Surrogate stated, “In the end, I believe that I have
a responsibility to the public fisc that takes priority. I recognize that to have someone pay from their
own resources when somehow, [some way] we can get the government’ to pay is an old fashioned
thought but it is a thought I agree with.” The Appellate Division ruled that the Surrogate had abused
its discretion in conditioning its approval of the SNT upon the petitioner’s agreement to limit the
funding thereof to $100,000. The Court explained that by placing these limitations, the Surrogate
ensured that the petitioner would lose her eligibility for Medicaid, “a result that is inconsistent with
the public policy underlying SNTs” (enhancing the life of the beneficiary), and “the Surrogate’s
function in approving and supervising their establishment.” Finally, the Appellate Division noted
that “none of the pertinent statutes or regulations supports a limitation upon the amount of money
that may be used to fund an SNT, and none of the cases construing those statutes and regulations has
in fact imposed such a regulation.”
Matter of Emil Z., 9/4/09, NYLJ 29, (col. 3) (Sup. Ct. Nass.Cty.)(Asarch, J.)
Court permitted Medicaid exempt transfers to the AIP’s wife to allow her to continue to support the
family in the family residence and to reimburse herself for certain expenses she incurred for the
benefit of the IP but declined further transfers that would leave an amount in the IP’s name that
would provide for his care for only a 5 year period. Part of the court’s rational was that the wife had
been delinquent in paying for some of the IP’s past care and the court was hesitant to permit the
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