MHL ARTICLE 81 - New York State Unified Court System

Matter of De Las Nueces, NYLJ, August 15, 2008, p. 38, col. 4 (Surr Ct. Westchester Cty.)
(Surr. Scarpino)
Trust by its terms requires annual accounting in the form and manner required by MHL 81.31 and
that such accounting be examined in the manner required by MHL 81.31.
(vi) Terms Against the Best Interest of the Beneficiary and/or
Against Public Policy
Matter of the Guardianship of Conor Maloney, 11/20/09 N.Y.L.J. 40 (col. 5)(Surr Ct. Suff Cty)
(Surr. Czygier)
The Surrogate struck down several terms in an SNT as against the best interests of the beneficiary
and/or against public policy including provisions: (1) divesting the court of authority to direct that
payments be made to beneficiary if all his needs for support and education are not being met by the
trustee, (2) allowing the trustee to terminate the trust in her sole discretion during the beneficiary’s
lifetime as if he had died; (3) permitting the trustee to pay the beneficiary’s funeral/burial expenses
before reimbursement has been made to Medicaid, (4) allowing the trust, as an estate planning
devise, to continue beyond the beneficiary’s lifetime if all his heirs at law had not yet turned 35 years
of age; (5) allowing the trustee to make payments to herself in her sole discretion and to name herself
as a custodian of the funds under UGMA; (6) allowing the trustee unilaterally to increase the
number of trustees at anytime, up to a total of three, without the requirement of a bond; (7)
permitting the trustee to lend money to herself or any of the other trustees and for each of them to
have the authority to borrow such funds; (8) to move the situs of the trust without further order of
the court, and (9) to be exonerated from any liability for self-dealing.
l. Retroactive Establishment
In the Matter of the Funding of a Supplemental Needs Trust for the Benefit of Daniel J.V.,
33 Misc3d 1222A; 943 N.Y.S. 2d 791; 2011 N.Y. Misc. LEXIS 5396 (Surr. Ct., Bronx Cty,
2011) (Holzman, Surr.)
The Surrogate allowed for the nunc pro tunc retroactive establishment of an SNT dating back to the
return date of a previous application for the SNT that had been rejected because the disabled
individual did not have the capacity to make application for himself at that time and a 17-A guardian
first need to be appointed to make the application for him. This had the effect of reinstating his
benefits. The Surrogate reasoned that he would have been entitled to a decree establishing and
funding an SNT for his benefit as of the earlier date had a duly appointed guardian of his property
been appointed. The Surrogate stated: “The express purpose of an SNT is to permit a person such
as the ward to have the trust assets available for those needs that are not covered by Medicaid
without affecting his Medicaid eligibility. It would defeat the spirit of EPTL 7-1.12, if not also its
express provisions, to deny its benefits to the ward based on a bequest which he lacked the capacity
to obtain prior to incurring expenses covered by Medicaid and where no other person at that time
was authorized to apply for an SNT on his behalf.”
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