Contact Us for a Free Consultation 216-464-9999

My Blog

Power of Appointment Does Not Make Trust "Countable"

Posted by Todd W. Bartimole | Sep 07, 2021 | 0 Comments

Often in Medicaid planning we will create irrevocable trusts with a "power of appointment."  A power of appointment is a clause in your trust which enables you, or someone you designate, to do various things.  One of the things we often do in an irrevocable trust is create a power of appointment to change the beneficiary of a trust.  By doing this, an irrevocable trust beneficiary can be changed by the person holding the power.  

In Medicaid planning, we can create an irrevocable trust and hold funds in it for a client.  The power of appointment is limited (thus called a limited power of appointment) to make sure that a person cannot change the beneficiary to themselves, a spouse, or creditors (before or after death).  If they could, the trust would be considered available to them, and would prevent them from qualifying for Medicaid. 

Recently in Massachusetts,, a trust with a limited power of appointment was reviewed by a court.  The power of appointment allowed the trustee essentially to change or add non-profit beneficiaries to the trust.  Because the nursing home was a non-profit, the State argued that the trustee could appoint it to the nursing home for payment. 

The court was not persuaded by the State and ruled that the power of appointment did not allow payment to the nursing home.  In sum, the trust did not allow the ability to appoint property to a creditor, or for the creators own benefit, and thus the Trust successfully sheltered the grantor's property. 

About the Author

Todd W. Bartimole

Todd has been practicing in areas of elder law since 1993.  He obtained his A.B. in Political Science from Ohio University and his Juris Doctor from Cleveland Marshall College of Law in 1993.  Prior to becoming an attorney Todd worked with the local Long Term Care Ombudsman program, advocating fo...

Comments

There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Contact Us Today

Cleveland Elder Law is committed to answering your questions about Elder Law, Estate Law and Probate law issues in Independence, Ohio.

We offer a free consultation and we'll gladly discuss your case with you at your convenience. Contact us today to schedule an appointment.

Menu