MHL ARTICLE 81 - New York State Unified Court System

easonableness by the court.
(ii) Amendment of Trust Only Upon Court Approval
Matter of the Petition of James Butler to Establish a First Party Supplemental Needs Trust
Pursuant to EPTL §7-1.12 For the Benefit of James Butler, 7/25/2007 NYLJ 34 (col. 1) (Surr.
Ct., New York County)(Surr. Glen)
Although the co-trustees may determine in the exercise of their discretion as fiduciaries that the
retention of an attorney for a particular matter is appropriate, the trust agreement must provide that
any disbursements from the trust to pay attorneys retained by the co-trustees are subject to review
for reasonableness by the court. Second, the trust should provide that it can be amended only upon
court approval.
Matter of the Petition of Debra Berlan-Luterzo to Establish a First Party Supplemental Needs
Trust Pursuant to §7-1.12 for the Benefit of Richard S. Berlan, 7/25/2007 NYLJ 34, col.
3)(Surrogate’s Court, New York County) (Surr. Glen)
Although a trustee may determine in the exercise of her or his discretion as a fiduciary that the
retention of an attorney for a particular matter is appropriate, the trust agreement must provide that
any disbursements from the trust to pay attorneys retained by the trustee are subject to review for
reasonableness by the court. Second, the trust should provide that it can be amended only upon court
approval.
(iii) Reversal of Gifts and Planning Devices
Matter of Ostrander (Reeves), 2009 Slip Op 307794U; 2009 N.Y. Misc. LEXIS 5367 (Sup. Ct,
Wayne Cty. 2009)(Kehoe, J.)
The Court denied the motion of co-conservators, appointed in 1992, to upwardly modify their powers
nunc pro tunc to include the powers to make gifts and to engage in medicaid planning on behalf of
their elderly ward. In so doing, the Court noted that the co-conservators’ plan, if approved, would
result in a unilateral modification of the admission agreement between the ward’s Nursing Home,
and the Co-Conservators (in which they had agreed, inter alia, to guarantee continuity of payment
from the ward’s funds, and to refrain make any transfers which would jeopardize DSS’ ability to
receive full payment for services which would be rendered to the ward), and would violate the intent
of the Medicaid program. The Court added that the nunc pro tunc making of gifts does not appear
to be in accordance with the factors to be considered under MHL § 81.21(d). Nevertheless, the Court
granted the co-conservators the powers to make gifts and to engage in medicaid planning
prospectively.
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