Title: Guilfoil v. Secretary of Executive Office of Health & Human Services

State: massachusetts

Issuer: Massachusetts Supreme Court

Document:

NOTICE:  All slip opinions and orders are subject to formal 
revision and are superseded by the advance sheets and bound 
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error or other formal error, please notify the Reporter of 
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SJC-12922 
 
JOELLEN GUILFOIL, personal representative,1  vs.  SECRETARY OF 
THE EXECUTIVE OFFICE OF HEALTH AND HUMAN SERVICES. 
 
 
 
Worcester.     October 7, 2020. - February 9, 2021. 
 
Present:  Budd, C.J., Gaziano, Lowy, Cypher, & Kafker, JJ. 
 
 
MassHealth.  Medicaid.  Trust, Nominee trust, Remainder 
interests.  Real Property, Life estate. 
 
 
 
 
Civil action commenced in the Superior Court Department on 
February 1, 2018. 
 
 
The case was heard by Jane E. Mulqueen, J., on a motion for 
judgment on the pleadings. 
 
 
The Supreme Judicial Court on its own initiative 
transferred the case from the Appeals Court. 
 
 
Lisa M. Neeley for the plaintiff. 
Samuel M. Furgang, Assistant Attorney General, for the 
defendant. 
Patricia Keane Martin & C. Alex Hahn, for Massachusetts 
Chapter of the National Academy of Elder Law Attorneys, amicus 
curiae, submitted a brief. 
 
 
                     
 
1 Of the estate of Dorothy E. Frank. 
2 
 
 
CYPHER, J.  This case concerns whether the entire interest 
in a property transferred into a nominee trust is a countable 
asset in an individual's Medicaid eligibility determination 
where the individual has retained a life estate in the property.  
The plaintiff, Dorothy Frank,2 created a trust, the sole corpus 
of which consisted of her home.  The plaintiff retained a life 
estate interest in the property as a beneficiary, while her five 
children had a remainder interest.  The office of Medicaid's 
board of hearings determined that the property was a countable 
asset that rendered the plaintiff ineligible for long-term care 
benefits.  The plaintiff appealed, and a Superior Court judge 
ruled in favor of the agency.  We conclude that because the 
trust is a nominee trust, not a true trust, the plaintiff 
possesses no ability to reclaim ownership of the property's 
remainder interest and her only interest in the property is a 
life estate.  We further conclude that the plaintiff's life 
estate is not a countable asset for Medicaid eligibility 
purposes.  Accordingly, we reverse.3 
                     
 
2 We refer to Dorothy Frank, who initially commenced this 
lawsuit but died during the pendency of the case, as the 
plaintiff.  Currently, Frank's daughter, JoEllen Guilfoil, is 
the named plaintiff, as personal representative of Frank's 
estate.  Additionally, Guilfoil now is the trustee of the Frank 
Family Realty Trust, although it originally was Frank. 
 
 
3 We acknowledge the amicus brief submitted by the 
Massachusetts Chapter of the National Academy of Elder Law 
Attorneys. 
3 
 
 
1.  Background.  We set forth the basic facts and the 
procedural background of the case, reserving additional details 
for the discussion section.  We begin with an overview of the 
Medicaid framework to provide context for the discussion. 
 
a.  Medicaid framework.  Medicaid is a cooperative Federal 
and State program that "provides medical assistance to low 
income persons based on financial need."  Rudow v. Commissioner 
of the Div. of Med. Assistance, 429 Mass. 218, 221-222 (1999).  
See Tarin v. Commissioner of the Div. of Med. Assistance, 424 
Mass. 743, 746 (1997).  See also 42 U.S.C. § 1396-1.  "State 
participation in this public assistance program is voluntary, 
and those that choose to participate must submit, for Federal 
approval, a State Medicaid plan that complies with the Medicaid 
Act and its implementing regulations."  Rudow, supra at 222, 
citing 42 U.S.C §§ 1396 et seq.  The Medicaid program in 
Massachusetts is known as MassHealth.  See G. L. c. 118E, § 9.  
Recipients of MassHealth must meet certain financial eligibility 
requirements pursuant to 130 Code Mass. Regs. § 520.001 (2014).  
See Tarin, supra at 747. 
 
Relevant here is the provision that "[t]he total value of 
countable assets owned by or available to individuals applying 
for" MassHealth may not exceed $2,000.  130 Code Mass. Regs. 
§ 520.003(A)(1) (2019).  Title 130 Code Mass. Regs. § 520.007 
(2019) defines countable assets as "all assets that must be 
4 
 
included in the determination of eligibility.  Countable assets 
include assets to which the applicant or member or his or her 
spouse would be entitled whether or not these assets are 
actually received when failure to receive such assets results 
from the action or inaction of the applicant, member, spouse, or 
person acting on his or her behalf."  All real estate owned by 
the applicant, with the exception of the principal place of 
residence, is considered a countable asset.  130 Code Mass. 
Regs. § 520.007(G) (2014). 
 
In order to preserve scarce public resources, 
"[i]ndividuals are expected to deplete their own resources 
before obtaining assistance from the government."  Lebow v. 
Commissioner of the Div. of Med. Assistance, 433 Mass. 171, 172 
(2001).  On many occasions, however, we have been tasked with 
confronting the "unfortunate reality" that affluent individuals 
sometimes "devise strategies to appear impoverished in order to 
qualify for Medicaid benefits."  Id.  "One such strategy is to 
transfer assets into an inter vivos trust, whereby funds appear 
to be out of the individual's control, yet generally are 
administered by a family member or loved one."  Id.  Often known 
as "Medicaid planning," such strategies may dangerously 
"divert[] scarce Federal and State resources from low-income 
[qualifying individuals]."  Cohen v. Commissioner of the Div. of 
Med. Assistance, 423 Mass. 399, 404 (1996), cert. denied sub 
5 
 
nom. Kokoska v. Bullen, 519 U.S. 1057 (1997), quoting H.R. Rep. 
No. 265, 99th Cong., 1st Sess., pt. 1, at 72 (1985).  See Daley 
v. Secretary of the Exec. Office of Health & Human Servs., 477 
Mass. 188, 192 (2017). 
 
Congress has attempted to curtail such practices by 
enacting what is known as the "any circumstances" provision.  In 
the case of an irrevocable trust, for the purpose of 
demonstrating Medicaid eligibility, the Federal statute provides 
that "if there are any circumstances under which payment from 
the trust could be made to or for the benefit of the individual, 
the portion of the corpus from which, or the income on the 
corpus from which, payment to the individual could be made shall 
be considered resources available to the individual" (emphasis 
added).  42 U.S.C. § 1396p(d)(3)(B)(i).4  The relevant MassHealth 
regulation defines an irrevocable trust as "a trust that cannot 
be in any way revoked by the grantor," 130 Code Mass. Regs. 
§ 515.001 (2013), and adopts the same "any circumstances test."  
The regulation provides that "[a]ny portion of the principal or 
income from the principal (such as interest) of an irrevocable 
trust that could be paid under any circumstances to or for 
                     
 
4 Trusts created before 1993 are governed by 42 U.S.C. 
§ 1396a(k) (1986), which Congress repealed and replaced with 
§ 1396p(d) in 1993.  See Cohen v. Commissioner of the Div. of 
Med. Assistance, 423 Mass. 399, 404-406 & n.14 (1996), cert. 
denied sub nom. Kokoska v. Bullen, 519 U.S. 1057 (1997). 
6 
 
benefit of the individual is a countable asset."  130 Code Mass. 
Regs. § 520.023(C)(1)(a) (2014). 
 
The Federal statute also provides that, in the case of a 
revocable trust, "the corpus of the trust shall be considered 
resources available to the individual."  42 U.S.C. 
§ 1396p(d)(3)(A)(i).  The Massachusetts regulation defines a 
revocable trust as a "trust whose terms allow the grantor to 
take action to regain any of the property or funds in the 
trust."5  130 Code Mass. Regs. § 515.001.  Much like the Federal 
statute, the State regulation provides that "[t]he entire 
principal in a revocable trust is a countable asset."  130 Code 
Mass. Regs. § 520.023(B)(1) (2013).6 
 
One further constraint that Congress established to protect 
against Medicaid planning is the so-called "look-back" rule.  
                     
 
5 Under current Massachusetts law, "[u]nless the terms of a 
trust expressly provide that the trust is irrevocable, the 
settlor may revoke or amend the trust."  G. L. c. 203E, § 602.  
This provision only applies to trust instruments executed after 
July 8, 2012, and thus is not applicable here, where the trust 
was created in 1999. 
 
 
6 The regulation further specifies that "[t]he home or 
former home of a nursing-facility resident or spouse held in an 
irrevocable trust that is available according to the terms of 
the trust is a countable asset" that is not subject to the 
exemptions of 130 Code Mass. Regs. § 520.007(G)(2) or (G)(8).  
130 Code Mass. Regs. § 520.023(C)(1)(d) (2014).  Similarly, 
"[t]he home or former home of a nursing-facility resident or 
spouse held in a revocable trust is a countable asset" that is 
not subject to the exemptions.  130 Code Mass. Regs. 
§ 520.023(B)(4) (2014). 
7 
 
Under 42 U.S.C. § 1396p(c)(1)(B)(i), the look-back rule "imposes 
a penalty for any asset transfer for less than fair market value 
made by an individual within five years of the individual's 
application for Medicaid benefits."  Daley, 477 Mass. at 193.  
If such a transfer occurs during the five years (the look-back 
period), the applicant is ineligible for Medicaid benefits for a 
period of time determined by dividing the value of the transfer 
by the average monthly cost of the nursing home facility.  See 
42 U.S.C. § 1396p(c)(1)(E).  After the look-back period has 
expired, the individual is not subject to any penalty. 
 
b.  The trust.  On December 16, 1999, the plaintiff 
established the Frank Family Realty Trust (trust).  The 
plaintiff transferred her home in Fitchburg to the trust, which 
was "intended to be a nominee trust."  Under the terms of the 
trust, the plaintiff was the trustee, as well as one of six 
beneficiaries of the trust.  The schedule of beneficiaries, a 
separate document established under the agreement and 
declaration of trust on June 25, 2001, lists each beneficiary's 
interest in the property.  The plaintiff had a life estate 
interest in the property under the trust, and the other five 
beneficiaries, her children, have a remainder interest as joint 
tenants with rights of survivorship.  The trust contains nine 
articles.  Of particular significance here are the articles 
titled "Trustees," "Beneficiaries," Powers of Trustees," 
8 
 
"Termination," and "Amendments."  According to the agreement and 
declaration of trust, the trust can be amended in a writing 
signed by all beneficiaries.  The trust can be terminated at any 
time by notice in writing from any of the beneficiaries.  If 
terminated, the trust's assets will be transferred and conveyed 
to the beneficiaries as tenants in common in proportion to their 
respective interests or as otherwise directed by all of the 
beneficiaries.  The trustee, except in a case of termination, 
has "no power to deal in or with the Trust Estate except as 
directed by all of the Beneficiaries." 
 
At the time this suit was initiated, the plaintiff was a 
ninety-one year old woman who had been living in a long-term 
nursing facility since March 2017.  Shortly after she moved to 
the facility, she applied for long-term benefits from 
MassHealth.  Her application was denied because MassHealth 
determined that her countable assets exceeded the $2,000 limit.  
In its determination of her countable assets, MassHealth 
included a small amount of funds the plaintiff had in a credit 
union account and her real property, worth $109,000, that had 
been transferred to the trust.  The credit union account 
contained less than $2,000; therefore, the only issue in dispute 
is whether the real property was a countable asset that rendered 
the plaintiff ineligible for long-term benefits.  The plaintiff 
appealed, and after a hearing, the hearing officer upheld 
9 
 
MassHealth's denial of her application.  A Superior Court judge 
denied the plaintiff's motion for judgment on the pleadings and 
affirmed the decision of the hearing officer.  The plaintiff 
appealed, and we transferred the case to this court on our own 
motion. 
 
2.  Standard of review.  In reviewing administrative agency 
decisions, we give "due weight to the experience, technical 
competence, and specialized knowledge of the agency, as well as 
to the discretionary authority conferred upon it."  G. L. 
c. 30A, § 14 (7).  "The burden of proof is on the appealing 
party to show that the order appealed from is invalid, and we 
have observed that this burden is heavy."  Massachusetts Inst. 
of Tech. v. Department of Pub. Utils., 425 Mass. 856, 867 
(1997).  Where an agency's finding is supported by substantial 
evidence, we do not disturb it.  See Springfield v. Department 
of Telecomm. & Cable, 457 Mass. 562, 568 (2010).  "Where an 
agency's determination involves a question of law, however, it 
is subject to de novo review."  Id.  At issue here -- whether 
the entire interest in a property transferred to a nominee trust 
is a countable asset in a MassHealth eligibility determination 
where the trustee retains a life estate in the real property -- 
is a question of law.  Accordingly, we review the matter de 
novo. 
10 
 
 
3.  Discussion.  a.  Nominee trust.  We first address the 
plaintiff's contention that the trust is a nominee trust, which 
establishes only a principal and agency relationship between the 
beneficiaries and trustees.  It is well established that a 
nominee trust is "an entity created for the purpose of holding 
legal title to property with the trustees having only 
perfunctory duties" (citation omitted).  Morrison v. Lennett, 
415 Mass. 857, 860 (1993).  A true trust, on the other hand, is 
defined as "a fiduciary relationship with respect to property, 
subjecting the person by whom the title to the property is held 
to equitable duties to deal with the property for the benefit of 
another person."  Restatement (Second) of Trusts § 2 (1959).  
The trustee of a true trust has a duty to the beneficiary to 
administer the trust and can exercise such powers as are 
necessary or appropriate to carry out the purposes of the trust 
and that are not forbidden by the terms of the trust.  Id. at 
§§ 169, 186. 
 
The common characteristics of a nominee trust are as 
follows:  "(1) the names of the beneficiaries are filed with the 
trustees rather than being publicly disclosed; (2) a trustee may 
serve simultaneously as a beneficiary; (3) the trustees lack 
power to deal with the trust property except as directed by the 
beneficiaries; (4) a third party may rely on the disposition of 
trust property pursuant to any instrument signed by the 
11 
 
trustees, without having to inquire as to whether the terms of 
the trust have been complied with; and (5) the beneficiaries may 
terminate the trust at any time, thereby receiving legal title 
to the trust property as tenants in common in proportion to 
their beneficial interests."  Roberts v. Roberts, 419 Mass. 685, 
687 n.2 (1995), quoting In Re Grand Jury Subpoena, 973 F.2d 45, 
48 (1st Cir. 1992).  It is the third feature, in which the 
trustees have no power to act in respect to the trust property 
but may only act at the direction of the beneficiaries, that is 
key to the nature of the nominee trust.  "Unlike in a 'true 
trust,' the trustees of a nominee trust have no power, as such, 
to act in respect of the trust property, but may only act at the 
direction of . . . the beneficiaries."  Morrison, 415 Mass. at 
860, quoting Birnbaum, The Nominee Trust in Massachusetts Real 
Estate Practice, 60 Mass. L.Q. 364, 365 (1976).  See Lattuca v. 
Robsham, 442 Mass. 205, 207 n.6 (2004). 
 
We agree with the plaintiff that the trust at issue is a 
nominee trust and is, in many ways, akin to a title-holding 
entity, rather than a true trust.  The trust document states 
that it "is intended to be a nominee trust, so-called, for 
federal and state income tax purposes and to hold the record 
legal title to the Trust Estate and perform such functions as 
are necessarily incidental thereto."  As is characteristic of a 
12 
 
nominee trust, the trust permits a trustee to serve 
simultaneously as a beneficiary. 
Most significantly, the trust provides that the trustees 
are to act only at the discretion of the beneficiaries.  See 
Morrison, 415 Mass. at 860-861 (where declaration establishing 
trust provides that trustees are to act solely at direction of 
beneficiary, trust is nominee trust); Bellemare v. Clermont, 69 
Mass. App. Ct. 566, 571 (2007) ("Where a person is both agent 
and trustee for another, the agency relation . . . predominates" 
[quotation and citation omitted]).  By contrast, in a true 
trust, the trustee is tasked with the duty to administer the 
trust "in accordance with its terms and purposes and the 
interests of the beneficiaries."  G. L. c. 203E, § 801.  Here, 
article IV of the trust, "Powers of Trustees," states that "the 
Trustees shall have no power to deal in or with the Trust Estate 
except as directed by all of the Beneficiaries."  As is the case 
in nominee trusts, the trustees' lack of discretion to act 
altogether establishes a principal and agency relationship 
between beneficiaries and trustees.  Compare In re VanBuskirk, 
511 B.R. 220, 231 (Bankr. D. Mass. 2014) ("That the Realty Trust 
property happens to be real property does not make the express 
trust a nominee trust when the trustees and not the 
beneficiaries retain control over the property"); Lyons v. 
Federal Sav. Bank, 193 B.R. 637, 645 (Bankr. D. Mass. 1996) 
13 
 
(trust was not nominee trust where trustees' authority to 
determine distributees, declare dividends, and distribute 
uninvested capital rendered trustees more than agents of 
beneficiaries).  The beneficiaries of a nominee trust become the 
vested owners of the property in question, and accordingly, the 
grantor has no power to revoke the trust.  Compare Old Colony 
Trust Co. v. Clemons, 332 Mass. 535, 539 (1955) (where settlor 
retains right to revoke, he or she intends that beneficiary's 
interest not vest until his or her death). 
 
Additionally, here, the beneficiaries may terminate the 
trust.  The trust provides:  "This Trust may be terminated at 
any time by notice in writing from any of the Beneficiaries 
. . . ."  In a typical nominee trust, each beneficiary has the 
power to terminate the trust at any time.  See Roberts, 419 
Mass. at 687 n.2.  This is because a vested owner must have the 
right to dispose freely of that property.  Here, the 
beneficiaries have an interest as joint tenants with the right 
of survivorship so long as the trust exists.  The beneficiaries 
may terminate the trust at any time, thereby receiving legal 
title to the trust property as tenants in common in proportion 
to their beneficial interests.  When one beneficiary terminates, 
the beneficiaries are left with separate interests as tenants in 
common and are free to alienate their respective interests.  The 
14 
 
termination clause, as the plaintiff suggests, is further 
evidence that the trust is not a true trust. 
 
Similarly, only the beneficiaries are permitted to amend 
the trust.  Article III of the trust, titled "Beneficiaries," 
provides:  "Decisions made and actions taken hereunder 
(including without limitation, amendment of this Trust; 
appointment and removal of Trustees, directions and notices to 
Trustees; and execution of documents, shall be made or taken as 
the case may be, by any of the Beneficiaries."  Article VI of 
the trust, "Amendments," provides:  "This Declaration of Trust 
may be amended from time to time by an instrument in writing 
signed by all of the Beneficiaries . . . ."  We do not read 
these two sections as conflicting; rather, it appears to us that 
the amendment terms under the "beneficiaries" section refer to 
any beneficiary's ability to amend the trust, including 
amendment of the schedule of beneficiaries.7  The "amendments" 
section imposes a further restriction on the beneficiaries' 
ability to amend the agreement and declaration of trust.  
Amendment of the agreement and declaration of trust is permitted 
only through a writing signed by all beneficiaries. 
                     
 
7 The trust is not a model of clarity.  We read the 
instrument as a whole and interpret its terms with reference to 
the trust's purpose as a whole.  Cf. Ferri v. Powell-Ferri, 476 
Mass. 651, 654 (2017). 
15 
 
The inclusion of the schedule of beneficiaries in the 
amendment terms of the "beneficiaries" section is evident first 
from the language "amendment of this Trust," rather than 
amendment of "the Declaration of Trust," as specified in the 
"amendments" section.  Additionally, the first clause of the 
"beneficiaries" section primarily relates to the function of the 
schedule of beneficiaries.  It states, in relevant part:  "The 
term 'Beneficiaries' shall mean the persons and entities listed 
as Beneficiaries in the Schedule of Beneficiaries and in . . . 
revised Schedules of Beneficiaries . . . ."  It follows that the 
second clause of the "beneficiaries" section, which provides for 
the "amendment of this Trust . . . by any of the Beneficiaries," 
also includes the beneficiaries' ability to amend the schedule 
of beneficiaries. 
 
b.  Nominee trust analysis.  We now turn to the question 
whether this nominee trust is analyzed under traditional trust 
law.  The plaintiff argues that the hearing officer and the 
trial judge applied the incorrect legal principles because the 
trust is not a true trust.  MassHealth counters that 
countability for Medicaid eligibility purposes is based on 
whether the grantor can access trust proceeds, regardless of the 
nature of the trust.  MassHealth contends that there are 
circumstances in which the grantor could access the trust 
proceeds and, accordingly, regardless of whether the trust is a 
16 
 
"true trust," it is governed by the Federal statute as well as 
the Massachusetts regulation.  Title 130 Code Mass. Regs. 
§ 520.023 applies to "trusts or similar legal devices created on 
or after August 11, 1993, that are created or funded other than 
by a will."  See 42 U.S.C. § 1396p(d)(6) ("The term 'trust' 
includes any legal instrument or device that is similar to a 
trust . . ."). 
 
We conclude that the nominee trust in this case is not a 
"similar legal device" to a trust.8  130 Code Mass. Regs. 
§ 520.023.  Here, the features of the trust are in line with the 
purposes for which nominee trusts are typically used.  See 
                     
 
8 This is not to say, however, that there may not be 
circumstances in which a so-called "nominee trust" might hold 
more characteristics of a trust than an agency.  See Roberts v. 
Roberts, 419 Mass. 685, 688 (1995).  In such a case, the nominee 
trust could be considered a trust-like device and would be 
subject to trust law for the purposes of determining Medicaid 
eligibility.  Id. ("The fact that a nominee trust is held to be 
an agency in some contexts, however, does not mean that it 
should be treated as an agency in every instance.  Trusts have 
been recognized for some purposes even though they are ignored 
for others").  In Roberts, the court concluded that because 
"gifts over" are not typical of nominee trusts, which normally 
do not provide for the disposition of the res to anyone other 
than the beneficiaries, agency principles were not applicable.  
Id. at 689.  A "gift over" is a provision within an inter vivos 
trust that requires the transfer of the trust estate on the 
settlor's death.  See id. at 689-690.  There, the trustees were 
to transfer the trust estate to the trustees as tenants in 
common, giving no additional control to the beneficiaries.  Id. 
at 686, 689.  "Gifts over" are unrelated to the purposes for 
which nominee trusts are used -- maintaining anonymity of 
ownership, easing transferability and avoiding title transfers.  
Id. at 689.  See Birnbaum, The Nominee Trust in Massachusetts 
Real Estate Practice, 60 Mass. L.Q. 364, 365-366 (1976). 
17 
 
Roberts, 419 Mass. at 689 (nominee trust typically used for 
maintaining anonymity of ownership, easing transferability, and 
avoiding title transfers).  As discussed supra, there is no 
trustee-beneficiary relationship created by the trust; rather, 
the trust establishes a principal-agent relationship where 
beneficiaries control the trustee's actions and have unfettered 
power to terminate or amend the trust. 
 
Accordingly, because the trust is not a true trust, it does 
not bear any similarities to a revocable trust or an irrevocable 
trust.  Upon the transfer of the plaintiff's property to the 
trust, an immediate property interest vested in the 
beneficiaries.  See Bromley v. Mitchell, 155 Mass. 509, 512 
(1892).  The plaintiff retained no rights of ownership.  See 
Goodwill Enters., Inc. v. Kavanaugh, 95 Mass. App. Ct. 856, 859 
(2019) ("there is logic in treating the beneficiaries of a 
nominee trust as the true owners of the property for the 
purposes of liability as well as benefit" [quotation and 
citation omitted]); Bellemare, 69 Mass. App. Ct. at 571 (in 
prior decisions involving nominee trusts, "[l]iability has been 
imposed directly on the beneficiaries" [citation omitted]).  
Unlike a true trust, the property here vested at the time it was 
conveyed.  Compare McClintock v. Scahill, 403 Mass. 397, 399 
(1988) (trustee holds "full legal title to all property of a 
trust and the rights of possession that go along with it"); 
18 
 
Welch v. Boston, 221 Mass. 155, 157 (1915) ("It is one of the 
fundamental characteristics of trusts that the full and 
exclusive legal title is vested in the trustee"). 
 
We agree with the plaintiff that a nominee trust is not 
subject to traditional trust law, and therefore our analysis 
does not begin, as it would with a true trust, with whether the 
trust is revocable or irrevocable.  Accordingly, MassHealth's 
contention that the trust is revocable under 42 U.S.C. 
§ 1396p(d)(3)(A)(i) and 130 Code Mass. Regs. § 520.023(B)(1) is 
misguided.  Regardless, we highlight that, much like an 
irrevocable trust, the trust here does not permit any 
circumstances that would allow for distribution of the principal 
to the plaintiff.  We examine the provisions of the trust that 
bear on this question. 
 
MassHealth argues that the trust was revocable because any 
of the beneficiaries could terminate the trust and, upon 
termination, the plaintiff's equitable life estate would be 
converted to a legal life estate.  There is no provision in the 
trust, however, that gives the plaintiff the unilateral right to 
revoke the trust and regain full title ownership.  Although any 
beneficiary may terminate the trust, article V, "Termination," 
states that all assets must be distributed to the beneficiaries 
upon termination.  In this circumstance, each beneficiary 
retains control of his or her own interest.  The other 
19 
 
beneficiaries' vested interests cannot be reclaimed by the 
plaintiff, who originally deeded the property into the nominee 
trust.  The plaintiff would be left with a life estate and the 
other five beneficiaries would receive a remainder interest as 
set out in the schedule of beneficiaries.  The plaintiff has no 
discretionary authority and no power to return the property to 
herself. 
 
We further conclude that the plaintiff has no ability to 
revoke the trust and receive a distribution of the remainder 
interest.  The schedule identifying the named beneficiaries 
lists the plaintiff's children, the other five beneficiaries, as 
having a remainder interest in the property as joint tenants.  
The plaintiff is not the owner of any portion of the remainder 
interest in the property.  As the plaintiff contends, her 
initial transfer of the remainder interest in the property to 
her children is the equivalent of an irrevocable gift.  Under 
MassHealth regulations, such a transfer is a noncountable 
resource in an applicant's benefit eligibility determination 
after the lapse of a five-year disqualification period.  See 130 
Code Mass. Regs. § 520.023(A)(1).  The look-back provision was 
triggered when the plaintiff transferred the property to her 
children in 2001, and the disqualification period expired in 
2006. 
20 
 
 
The plaintiff did not apply for long-term benefits until 
2017.  Accordingly, such a gift would fall outside the five-year 
look-back period and therefore would not be countable for 
MassHealth purposes.  In the case of termination, the only way 
that the plaintiff could gain control of the property would be 
if the other beneficiaries gifted her their remainder interests.  
This "gifting" would constitute an action outside the 
termination and is not a scenario contemplated within the four 
corners of the trust document.  "Medicaid does not consider 
assets held by other family members who might, by reason of love 
but without legal obligation, voluntarily contribute monies 
toward the grantor's support."  Heyn v. Director of the Office 
of Medicaid, 89 Mass. App. Ct. 312, 318-319 (2016). 
 
Finally, MassHealth argues that under article III of the 
trust, the "beneficiaries" section, the plaintiff could amend 
the schedule of beneficiaries to name herself sole trustee and 
sole beneficiary, thus regaining the entire property free of the 
trust.   MassHealth contends that the trust also posits this 
exact scenario in the "beneficiaries" section:  "The parties 
hereunder recognize that if a sole Trustee and a sole 
Beneficiary are one and the same person, legal and equitable 
title hereunder shall merge as a matter of law."  MassHealth 
further relies on Langley v. Conlan, 212 Mass. 135, 138 (1912), 
for the principle that "where the legal and equitable title of 
21 
 
real estate both vest in the same person, the equitable title 
will merge in the legal estate, and absolute ownership will 
ensue divested of the trust."  This argument, however, ignores 
one of the defining characteristics of the nominee trust:  the 
beneficiaries are the vested owners of the property in question. 
 
While the beneficiaries' remainder interests may not be 
vested in possession while the plaintiff retained a life estate, 
they were vested in interest at the time the property was 
conveyed to the trust.  See Hochberg v. Procter, 441 Mass. 403, 
414-415 (2004), citing L.M. Simes & A.F. Smith, Future Interests 
§ 142, at 128-130 (2d ed. 1956) ("If the remainder is for life, 
the remainderman will enjoy the possession only if he survives 
the termination of the preceding life estate.  Nevertheless the 
death of the remainderman is not regarded as a condition, but as 
a limitation of the remainderman's estate.  Hence, there being 
no words of condition, the remainder for life . . . in an 
ascertained person is vested").  The plaintiff's ability to 
amend the schedule of beneficiaries cannot extinguish the 
beneficiaries' vested interests.  Furthermore, such an amendment 
of the schedule of beneficiaries would circumvent the purpose of 
the nominee trust as a holding device for legal title to the 
trust property. 
 
c.  The value of a life estate.  Having concluded that the 
plaintiff has retained no ability to reclaim the corpus of the 
22 
 
trust, we now turn to whether the retention of a life estate in 
a primary residence could render an individual ineligible for 
Medicaid benefits.  We have not found, and the parties have not 
provided, any Massachusetts case law directly addressing this 
question.  See Daley, 477 Mass. at 204 ("Although we do not 
decide the question, it appears that MassHealth does not 
consider a life estate in an applicant's primary residence to be 
a countable asset for Medicaid eligibility purposes"); Heyn, 89 
Mass. App. Ct. at 313 n.3 (recognizing that MassHealth stated in 
its brief that retention of life estate does not render 
individual ineligible for benefits, but declining to consider 
question). 
Other jurisdictions, have excluded the value of an 
applicant's life estate in a property that serves as the 
individual's principal place of residence when calculating 
assets to determine Medicaid eligibility.  See Groce v. 
Director, Ark. Dep't of Human Servs., 82 Ark. App. 447, 453-454 
(2003) (life estate excluded for purposes of Medicaid 
eligibility if applicant's principal place of residence); 
Kaspari v. Olson, 2011 ND 124, ¶¶ 9-10 (value of applicant's 
life estate excluded as actually available asset for purposes of 
establishing initial Medicaid eligibility but income from life 
estate considered to determine extent of assistance); Bleick v. 
North Dakota Dep't of Human Servs., 2015 ND 63, ¶ 33 (Crothers, 
23 
 
J., dissenting) ("Life estate interests in real property are 
excluded when calculating an applicant's available assets"). 
 
In Daley, this court contemplated the meaning of 130 Code 
Mass. Regs. § 520.023(C)(1)(d), which provides:  "The home or 
former home of a nursing-facility resident or spouse held in an 
irrevocable trust that is available according to the terms of 
the trust is a countable asset."  See Daley, 477 Mass. at 198-
199.  We concluded that the grantors' right of use in their 
homes and occupancy of the homes did not make the homes 
"available" to them.  Id. at 202.  There, the analysis turned on 
whether the terms of the trusts granted the trustees the 
discretion in any circumstance to sell the grantors' homes and 
distribute the proceeds.  Id. 
We apply the same analysis to the retention of the life 
estate in this case.  "A joint tenant, tenant by the entirety, 
or tenant in common holds a direct ownership interest in the 
property in question.  That is not true of the holder of a life 
estate interest or, as a general matter, one holding a 
beneficial interest."  Boyle v. Weiss, 461 Mass. 519, 525 n.14 
(2012).  Here, the plaintiff cannot amend the terms to alter the 
beneficial interest.  Because a life estate does not permit an 
individual to sell the home and distribute the proceeds, we 
conclude that the retention by an applicant of a life estate in 
his or her primary residence does render the property a 
24 
 
countable asset.  Accordingly, it was error to include the value 
of the property as an asset in the plaintiff's Medicaid 
eligibility determination. 
 
4.  Conclusion.  We reverse the judgment and remand to 
MassHealth for further proceedings consistent with this opinion. 
 
 
 
 
 
 
 
So ordered.