MHL ARTICLE 81 - New York State Unified Court System

payments for medical care and did not allow ADHS to collect the full amount of benefits paid, and
the ADHS was federally precluded from asserting a lien on the settlement for the full amount.
Matter of Moretti, 159 Misc.2d 654; 606 N.Y.S.2d 543 (Sup. Ct., Kings Cty.,
1993)(superceded by statute)(1994 amendment to EPTL 7-1.12)
Court finds that if AIP had capacity to act, it is apparent that he would have created an SNT with
proceeds of personal injury settlement, naming himself as the beneficiary, which would “supplement
and not supplant” government entitlements, thereby enabling him to enjoy an enhanced quality of
life. While it is noted that §81.21(a)(6), in describing the guardian's powers to make transfers on
behalf of IP, refers to such transfers as those made "for the benefit of another person," OBRA '93
now makes clear that disabled person's assets may be transferred to SNT for his own benefit.
Matter of Bigajer, NYLJ, 5/27/94, (Surrogate Court, Kings Cty.)
Court applies OBRA ‘93 and grants application by co-guardians (parents) to create SNT for
developmentally disabled ward (son) with personal injury award before NY adopted OBRA, citing
supremacy clause of US constitution.
Matter of LaBarbera (Donovan), NYLJ, 4/26/96, p. 36, col. 6 (Suffolk Sup.)(Luciano, J.)
Court denies application to establish SNT for comatose AIP with proceeds of personal injury
settlement where income from settlement currently exceeds and is likely to continue to exceed her
expenses, although it did give guardian opportunity to seek establishment of SNT should this
situation change in future.
(ii) Inheritances
Estate of Devore, 12/16/10 N.Y.L.J. 34, (col. g) (Surr. Ct. Kings Cty.) (Surr. Torres)
Surrogate Court approves a settlement whereby the Office of Mental Health agrees to defer
collecting 90% of a psychiatric patient’s inheritance until after his death, thereby allowing the
inheritance to be placed into a NYSARC third party trust to be used for the patient’s benefit
throughout his lifetime.
Matter of Olive VV., (Stipulation of 12/7/00)(attached)
The Attorney General agreed to withdraw its appeal and has stipulated that inherited funds are not
"available" for Medicaid qualifying purposes until the date of distribution rather that the date of
death. Therefore, such inherited funds may be placed into Supplemental Needs Trusts rather than
applied to satisfy pre-existing Medicaid liens. This agreement is consistent with the outcomes in
Matter of Patrick B.B., Matter of Steven S., and Matter of William S.,either previously reported in
the main volume of this booklet or in this volume.
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