Daley & Nadeau, SJC 170125
About a month ago I was invited to dinner with colleagues who were preparing for arguments before the Supreme Judicial Court. The court had consolidated appeals by Mary E. Daley and Lionel C. Nadeau whose applications for MassHealth benefits had been rejected in administrative and judicial hearings. In both cases, MassHealth and courts had found that the life interest or “use and occupancy” each retained in trusts they had created years earlier, constituted “assets” that had to be spent down before they were eligible for MassHealth. Dailey and Nadeau v. Director of the Office of Medicaid, was numbered SJC-12200. Ron Landsman, a colleague from Maryland, was presenting an amicus brief (on behalf of the National Academy of Elder Law Attorneys) to support Daley’s and Nadeau’s attorneys. Ron’s argument, which referred to how other states handled such situations, emphasized that, while state standards for qualifying Medicaid applications for long-term care vary considerably, states may not impose standards that are “more restrictive than [those applied by the federal] SSI program.”
The five of us at dinner share the belief that people who can no longer afford to meet the high cost of nursing home care – if they’ve played by the rules – are entitled to MassHealth to pay for such costs. MassHealth, contended, however, that the SJC had to follow the precedent established in Doherty v. Commissioner (2009) that it had authority to scrutinize trusts that purported to limit the grantor to distributions of income to determine whether, in fact, the grantor “under any circumstances” might receive some or all of the trust’s principal. Such a finding would render an applicant “over assets” even if the trust was deemed irrevocable and even if it had been created more than five years before a MassHealth application. In these cases, the issue is whether retaining a right to a life estate or “use and occupancy” to real estate might constitute a right to principal. We spent some time at dinner anticipating the questions the judges might pose to our colleagues.
At dinner I also learned, for the first time, that one can watch Supreme Judicial Court hearings over the internet, in real time. So the next morning I tuned in to see how my colleagues fared. I was surprised by how tough some of the judges were to my friends’ arguments, but then realized that the judges were equally tough on the two highly qualified attorneys from the Attorney General’s office who represented MassHealth. Towards the end of the hearing, a judge asked one of MassHealth’s defenders, how people like Daley and Nadeau, if they retained an interest in their home via a trust could ever expect to qualify for MassHealth. The answer, given as if it had been rehearsed, was that MassHealth allows for “undue hardship” and all that would have been necessary was for such applicants to show that they had run out of money, so they could no longer afford to remain in their nursing home.
Soon after the hearing, one of my friends who had attended the dinner emailed me asking permission for the attorneys to send to the Court an article I had published about a decade ago in the National Academy of Elder Law’s journal. The article reviewed all of the cases, until that time, that had been appealed to administrative Fair Hearings or to the courts in which “undue hardship” had been pleaded. Exhaustive research in the archives of the Board of Fair Hearings revealed that no such cases had been decided in the applicants’ favor. The article included comments from lawyers in other states that, as far as they could tell, the same was true for their states as well,.
Emily Starr had miraculously remembered my article, found a copy, and asked me for permission to send it to the court, to rebut the impression made during the hearing that the applicants should have simply relinquished their legal argument and begged authorities to grant waivers if they could show that, if the law were strictly followed, they would suffer “undue hardship.” I was, frankly, thrilled that someone remembered an old article of mine and, more, that it might be useful for the two applicants and, possibly, others. Also, I confess, I was delighted that I could contribute, in a very small, almost vicarious way, to righting the scales of justice.
It will be months before the SJC reveals its decision in Daley and Nadeau but I’m not above taking a small amount of credit if the court reverses the previous decisions in these cases although my participation pales in significance to what our appellate attorneys invested in preparing for, briefing, and then arguing such important cases.
If you are interested in receiving a copy of the article, just call the office at 617-431-2669.