Court Opinion

ID: 9390692
Source: CourtListenerOpinion
Date Created: 2023-04-28 14:04:03.613897+00
Date Added: 2024-06-11T17:18:36.278991
License: Public Domain

IN THE SUPREME COURT OF IOWA

                                   No. 22–0736

              Submitted February 22, 2023—Filed April 28, 2023

IN THE MATTER OF THE MEDICAL ASSISTANCE POOLED SPECIAL NEEDS
TRUST OF SCOTT HEWITT.

IOWA DEPARTMENT OF HUMAN SERVICES,
    Appellant.

      Appeal from the Iowa District Court for Jasper County, Thomas P. Murphy,

Judge.

      The Iowa Department of Human Services appeals the district court’s grant

of summary judgment in favor of the trustee in its challenge to the trustee’s

accounting of a pooled special needs trust. AFFIRMED.

      Oxley, J., delivered the opinion of the court, in which all justices joined.

      Brenna Bird, Attorney General, Laura F. Kron (argued), Assistant Attorney

General, and Benjamin C. Chatman, Iowa Department of Human Services, for

appellant.

      Elizabeth R. Meyer (argued), Jana M. Weiler, and Elizabeth A. Etchells of

Dentons Davis Brown PC, Des Moines, for the Center for Special Needs Trust

Administration, appellee.
                                             2

OXLEY, Justice.

       This case involves a dispute between the Iowa Department of Human

Services (DHS),1 which administers Iowa’s Medicaid program, and the trustee of

a pooled special needs trust held for the benefit of Scott Hewitt. Title XIX of the

Social Security Act (Title XIX) requires that the funds remaining in Mr. Hewitt’s

trust subaccount when he died must be used first to reimburse the state for its

Medicaid expenditures, but only “[t]o the extent” the funds are not retained by

the trust. 42 U.S.C. § 1396p(d)(4)(C)(iv). The trust retained the remaining

balance of $25,876.85, and DHS claims it is entitled to a detailed accounting to

ensure the retained funds were used for a proper purpose. Based on our review

of the governing trust provisions and Iowa trust law, the trustee provided an

adequate accounting and was not required to detail how the trust had, or would,

use the retained funds.

                                                 I.

       A pooled special needs trust is a specific type of trust established for the

benefit of disabled individuals who receive Medicaid assistance. Because

Medicaid is designed for individuals with little to no income, those eligible to

receive it may not have adequate resources to pay for their nonmedical

necessities. Pooled special needs trusts are a way for such individuals to

maintain their Medicaid eligibility while also providing for their “Medicaid-

ineligible expenses, such as clothing, phone service, vehicle maintenance, and

       1DHS  began the transition process into the Iowa Department of Health and Human
Services (HHS) during the pendency of this appeal. 2022 Iowa Acts ch. 1131, § 51. We refer to
the agency as DHS throughout this opinion.
                                        3

taxes.” Cox v. Iowa Dep’t of Hum. Servs., 920 N.W.2d 545, 551 (Iowa 2018)

(quoting Ctr. for Special Needs Tr. Admin., Inc. v. Olson, 676 F.3d 688, 695 (8th

Cir. 2012)).

      In a pooled trust, an individual’s funds are combined with other

individuals’ funds for investment purposes, and the trustee maintains

subaccounts, or “separate trust ‘accounts’ . . . for each disabled individual.” Id.

(quoting Lewis v. Alexander, 685 F.3d 325, 333 (3d Cir. 2012) (in turn quoting

Jan P. Myskowski, Special Needs Trusts in the Era of the Uniform Trust Code, 46

N.H. Bar J. 16, 16 (2005–2006))); see also Soc. Sec. Admin., Program Operations

Manual     System     (POMS)      SI    01120.203D(1)      [hereinafter    POMS],

https://secure.ssa.gov/poms.nsf/lnx/0501120203          [https://perma.cc/87BZ-

YZ97] (“A pooled trust contains the assets of many different individuals, each

held in separate trust accounts and established through the actions of

individuals for separate beneficiaries.”). “By pooling these small accounts for

investment and management purposes, overhead and expenses are reduced and

more money is available to the beneficiary.” Cox, 920 N.W.2d at 551 (quoting

Lewis, 685 F.3d at 333). As the Social Security Administration explains in its

Program Operations Manual System by way of analogy, “the pooled trust is like a

bank that holds the assets of individual account holders. . . . The pooled trust

instruments usually consist of an overarching ‘master trust’ and a joinder

agreement that contains provisions specific to the individual beneficiary.” POMS

SI 01120.203D(1).
                                         4

      When a beneficiary dies, Title XIX allows the pooled trust to retain any

remaining balance in the beneficiary’s subaccount, but any amounts not

retained must be paid to the state to reimburse it for the Medicaid benefits it

provided for the individual. 42 U.S.C. § 1396p(d)(4)(C)(iv).

      This case involves a pooled special needs trust established for the benefit

of Scott Hewitt. In December 2018, Mr. Hewitt used funds he received from a

workers’ compensation settlement to fund a pooled special needs trust by

executing a joinder agreement for the Iowa Pooled Trust to establish a

subaccount with the National Pooled Trust. On February 28, 2019, The Center

for Special Needs Trust Administration, Inc. (the Center), as trustee of the

National Pooled Trust, accepted the joinder agreement, and Mr. Hewitt

transferred $32,899.92 from the workers’ compensation settlement to the pooled

special needs trust.

      Mr. Hewitt died on July 6. DHS had paid a total of $100,217.48 through

the Iowa Medicaid program to cover medical expenses for Mr. Hewitt between

2005 and the time of his death. In response to DHS’s claim for a medical

assistance debt against Mr. Hewitt’s estate, the Center informed DHS that

Mr. Hewitt’s estate had no assets, his pooled special needs trust subaccount had

a balance of $25,876.85, and that the trust was retaining all of those funds. As

further detailed during litigation, the Center verified that the funds retained from

Mr. Hewitt’s subaccount “were never transferred into an operating account used

for the benefit of the trustee” but had “been retained in the trust’s master client

account.” The master client account, sometimes referred to as the master
                                                5

account, is an account “used to administer the pooled trust” that included

Mr. Hewitt’s subaccount, and all of its funds “are used for the benefit of the

beneficiaries of the pooled trust.” The Center also clarified that when it retains

funds from individual subaccounts, it does so “pursuant to the terms of The

National Pooled Trust” and that it “uses retained funds in furtherance of its

nonprofit mission to provide specialized administrative services for persons with

disabilities for the purpose of improving their quality of life.”

       On November 3, 2020, DHS filed a petition to invoke jurisdiction over the

irrevocable trust in the Iowa District Court for Jasper County. See Iowa Code

§ 633C.4(2) (2020). DHS noted that the Center had never invoked the court’s

probate jurisdiction concerning Mr. Hewitt’s pooled special needs trust by filing

the required annual reports with the court as required by Iowa Code chapter

633C.2 DHS’s petition sought a “detailed accounting of how the retained funds

have been or will be used, and [an] order [that] any funds after the payment of

properly retained funds be paid to DHS from the assets of the trust.”

       In response, the Center filed an initial and final report covering activity in

the Hewitt subaccount during 2019 (the only year it was in existence) and

reflecting that its remaining balance had been retained by the trust, resulting in

       2Because    Mr. Hewitt’s trust subaccount was not open for more than a year, however, the
Center’s fiduciary obligation to not only make these annual accountings, but to file them with
the district court is not addressed further here. That issue is addressed in the companion case
filed today, The Center for Special Needs Trust Administration, Inc., v. Iowa Department of Human
Services (In re the Medical Assistance Pooled Special Needs Trust of Steven Muller), ___ N.W.2d ___
(Iowa 2023).
                                                 6

a final balance of $0.3 It supplemented the report on October 7, 2021, with a

description of how it uses retained funds for the benefit of other trust

beneficiaries generally, and an explanation that it could not provide a more

detailed accounting of how the retained funds from Mr. Hewitt’s account were

used because the funds were no longer segregated in an individual subaccount.

DHS filed an objection to the supplemental report, and the parties later filed

competing motions for summary judgment.

       The district court granted summary judgment for the Center. After

agreeing with the parties’ interpretation that State and Federal Medicaid law

permits the trust to retain residual funds for proper purposes after the death of

a beneficiary, the court analyzed what implications that interpretation has on

the Center’s accounting obligations. The district court recognized that DHS

would be entitled to recover funds if the Center “distributes any retained funds

to family members of the beneficiary.” But the court concluded that the

representations from the Center that all funds in “the master account are used

for the benefit of the beneficiaries of the pooled trust” satisfied its reporting

obligations, and no further accounting was required absent evidence that the

       3The   schedules attached to the initial and final report reflect: the $32,899.92 funding
from Mr. Hewitt’s workers’ compensation settlement, no distributions, and a total of $7,028 in
disbursements over the five months the account was open. The disbursements included: $1,908
in trustee fees, $1,250 in Medicare Set-Aside administrative services fees, $3,120 in preneed
services, $250 in tax analysis fees, and $500 for an administrative closing fee. After a $4.93 gain,
the $25,876.85 balance was retained by the trust. The parties and district court identify
$25,871.92 as the retained amount, which is reflected on the final report as the subtotal of Mr.
Hewitt’s subaccount prior to “capital transactions and adjustments” of the same amount.
schedule “D” to the final report reflects the “account change” that took that balance to $0, which
was a net of the $4.93 gain and the $25,876.85 retention. We will use $25,876.85 as the retained
amount throughout this opinion.
                                         7

Center breached its trustee duties under Iowa law. We retained DHS’s appeal

from that decision.

                                         II.

      We review summary judgment rulings for correction of errors at law. Kirlin

v. Monaster, 984 N.W.2d 412, 415 (Iowa 2023). “Summary judgment is proper if

the only issue is the legal consequences flowing from undisputed facts.” Id.

(quoting Johnson v. Associated Milk Producers, Inc., 886 N.W.2d 384, 389 (Iowa

2016)). Because the only issues here involve the interpretation of statutory and

trust provisions, summary judgment was “the proper vehicle to test the validity

of [the] claim[s] . . . [a]nd we need only decide whether the district court properly

applied the law.” Id. (first and third alterations and omission in original) (quoting

Hill v. State, Dep’t of Hum. Servs., 493 N.W.2d 803, 804–05 (Iowa 1992)).

      DHS argues on appeal that a pooled special needs trust can only retain

funds from an individual beneficiary’s subaccount for specific authorized

purposes and that, as a beneficiary of the subaccount, DHS is entitled to an

accounting to ensure proper disposition of any retained funds. To the extent the

trustee did not retain the funds for a proper purpose, DHS claims it is entitled

to the funds as reimbursement of its Medicaid expenditures. DHS’s appeal

explores the intersection between Medicaid trust rules and the Iowa Trust Code,

so we start with an explanation of each.
                                                8

       To describe the Social Security Act as “complex” is an understatement.4

As complicated as its scheme is to wade through, though, the issues in this case

are limited to a narrow provision governing the interplay between trusts and

Medicaid eligibility. An understanding of the trust provisions helps set the stage.

       Medicaid is a cooperative federal aid program that subsidizes participating

states that provide medical assistance to their residents. See Olson, 676 F.3d at

694. As a needs-based program, Medicaid eligibility turns on the resources and

income available to an individual or family. See Iowa Dep’t of Hum. Servs. v.

Lohman (In re Est. of Melby), 841 N.W.2d 867, 875 (Iowa 2014). “[T]he program

contemplates that families will spend available resources first, and when those

resources are completely depleted [(subject to some limited exceptions)],

Medicaid may provide payment.” Id.

       “State participation in the Medicaid program is voluntary, but states

choosing to participate ‘must comply with all federal statutory and regulatory

requirements.’ ” Cox, 920 N.W.2d at 551 (quoting Lankford v. Sherman,

451 F.3d 496, 504 (8th Cir. 2006)). One such requirement is the treatment of

trusts as detailed in subsection 1396p(d) of title 42. See Olson, 676 F.3d at 694–

95 (citing 42 U.S.C. § 1396a(a)(18)). Recognizing that trusts can be used to

shelter assets, Congress enacted a comprehensive system in subsection

       4The    Social Security Act, of which the Medicaid trust rules are a part, contains a
“Byzantine construction,” Schweiker v. Gray Panthers, 453 U.S. 34, 43 (1981), making it “almost
unintelligible to the uninitiated,” Friedman v. Berger, 547 F.2d 724, 727 n.7 (2d Cir. 1976)
(Friendly, J.). It has been described as “an aggravated assault on the English language, resistant
to attempts to understand it.” Schweiker, 453 U.S. at 43 n.14 (quoting Friedman v. Berger, 409
F. Supp. 1225, 1226 (S.D.N.Y. 1976)).
                                         9

1396p(d) to direct how trusts affect Medicaid eligibility. See Lewis, 685 F.3d at

343. As a general matter, Congress requires that assets held in trust be

considered resources available to the beneficiary, which in turn reduces the

beneficiary’s eligibility for Medicaid. See 42 U.S.C. § 1396p(d)(3). This reflects

Congress’s primary objective “to prevent Medicaid recipients from receiving

taxpayer-funded health care while they shelter[] their own assets for their benefit

and the benefit of their heirs.” Lewis, 685 F.3d at 343; see also Johnson v. Guhl,

357 F.3d 403, 405 (3d Cir. 2004) (“Because Medicaid is available only to the

needy, creative lawyers and financial planners have devised various ways to

‘shield’ wealthier claimants’ assets in determining Medicaid eligibility.”).

      But Congress excepted three types of trusts from this general eligibility

rule. See 42 U.S.C. § 1396p(d)(4)(A)–(C); see also Iowa Admin. Code r. 441—

75.24(3)(a)–(c) (providing the same exceptions); POMS SI 01120.203A (describing

trusts established pursuant to 42 U.S.C. § 1396p(d)(4)(A) and (C) as “Medicaid

trust exceptions”). The three types of excepted trusts are: an income trust funded

only with the individual’s income from a pension, Social Security benefits, or

other stream of income, 42 U.S.C. § 1396p(d)(4)(B); an individual trust

established for a disabled individual under the age of 65, id. § 1396p(d)(4)(A);

and a pooled special needs trust established for a disabled individual of any age,

id. § 1396p(d)(4)(C). The Iowa Medicaid regime covering medical assistance trusts

hews close to the federal scheme. See Iowa Code § 633C.1(7) (defining “medical

assistance special needs trust” to cover both the individual trusts described in

42 U.S.C. § 1396p(d)(4)(A) and the pooled trusts in 42 U.S.C. § 1396p(d)(4)(C));
                                          10

Iowa Admin. Code r. 441—75.24(3)(c) (imposing the same requirements on Iowa

pooled medical assistance special needs trusts as those found in 42 U.S.C.

§ 1396p(d)(4)(C)).

      Special needs trusts, 42 U.S.C. § 1396p(d)(4)(A), and pooled special needs

trusts, id. § 1396p(d)(4)(C), are “ ‘discretionary trust[s] established for the benefit

of a person with a severe and chronic or persistent disability and [are] intended

to provide for expenses that assistance programs such as Medicaid do not cover.’

These expenses—books, television, Internet, travel, and even such necessities as

clothing and toiletries—would rarely be considered extravagant.” Lewis, 685 F.3d

at 333 (citation omitted) (quoting Sullivan v. County of Suffolk, 174 F.3d 282, 284

(2d Cir. 1999)). The exceptions for these trusts in Title XIX reflect Congress’s

secondary objective in enacting subsection 1396p(d), which was “to shield

special needs trusts from impacting Medicaid eligibility.” Id. at 343.

      A pooled special needs trust, like the one involved here, differs in

significant respects from the other two. First, the trustee must be a nonprofit

organization. 42 U.S.C. § 1396p(d)(4)(C)(i) (requiring the trust to be “established

and managed by a non-profit association”); see also Iowa Admin. Code r. 441—

75.24(3)(c)(1). Second, the trustee must maintain separate accounts for each

beneficiary that are established and used solely for the benefit of that disabled

individual, but the trustee can pool the accounts for investment and

management purposes. 42 U.S.C. § 1396p(d)(4)(C)(ii), (iii); Iowa Admin. Code

r. 441—75.24(3)(c)(2)–(3). Finally, and critical to the dispute here, whereas the
                                              11

other two types of trusts must include a Medicaid payback provision,5 which

requires the trust to first use any funds remaining at the beneficiary’s death to

reimburse the state for Medicaid payments made on the beneficiary’s behalf, see

42 U.S.C. § 1396p(d)(4)(A), (B)(ii); see also Iowa Admin. Code r. 441—75.24(3)(a)–

(b), a pooled special needs trust is only required to reimburse the state for its

Medicaid payments “[t]o the extent [those] amounts . . . are not retained by the

trust,” 42 U.S.C. § 1396p(d)(4)(C)(iv); see also Iowa Admin. Code r. 441—

75.24(3)(c)(4). This critical distinction from the other two types of trusts reveals

“Congress’ evident solicitude for . . . pooled trusts.” Lewis, 685 F.3d at 348.

       DHS does not dispute that the trust at issue here is a pooled special needs

trust or that the trust can “retain” the balance remaining in an individual’s

subaccount. It nonetheless argues that there are (or should be) limits on how

the trust can use retained funds, and that the Center cannot simply choose to

retain the entire remaining balance in a subaccount as a windfall when a

beneficiary dies. And if some limits exist, DHS argues it should be entitled to a

detailed accounting of how the retained funds are actually used.

       The cases relied on by DHS to suggest there must be some limit to prevent

the Center from retaining all amounts left at a beneficiary’s death do not support

its position. Rather, those cases reveal that the specific trust instruments, and

sometimes state law, determine whether there are specific limits on how much

of a beneficiary’s subaccount can be retained by the trust. For instance, in

       5David  A. Rephan & Joelle Groshek, ABLE Act Accounts: Achieving a Better Life Experience
for Individuals with Disabilities with Tax-Preferred Savings (and the Old Reliable Special and
Supplemental Needs Trusts), 42 Mitchell Hamline L. Rev. 963, 969 (2016).
                                               12

National Foundation for Special Needs Integrity, Inc. v. Reese, the trust agreement

provided that the trustee would not retain any portion of the beneficiary’s funds

upon death, and amounts remaining in the beneficiary’s subaccount would be

used to reimburse the state for medical assistance it had paid for the beneficiary.

881 F.3d 1023, 1026 (7th Cir. 2018). In contrast, neither Mr. Hewitt’s joinder

agreement nor the National Pooled Trust’s governing document limited the

amount of funds the trust could retain from Mr. Hewitt’s subaccount upon his

death. Both required only that any amounts not retained had to be used to

reimburse the state.

       Similarly, the trust agreement in Pfoser v. Harpstead “provided that up to

90 percent of any funds remaining in the sub-account at the time of Pfoser’s

death must be paid to the State to reimburse the Medical Assistance program

for the costs paid on [his] behalf,” and the trust “would retain the other 10

percent in a charitable trust for the benefit of indigent pooled trust beneficiaries

who had exhausted the funds in their sub-accounts.” 953 N.W.2d 507, 512

(Minn. 2021). That provision mirrored Minnesota law, which provides that pooled

special needs trusts operating in Minnesota qualify for the Medicaid eligibility

exception only if they limit how much a trust may retain to “ten percent of the

account value at the time of the beneficiary’s death” and limit the use of retained

funds “for the benefit of disabled individuals who have a beneficiary interest in

the pooled trust.” Minn. Stat. § 256B.056, subd. 3b(d) (2020).6 Again, in

       6Although  the validity of this statute was not at issue in Pfoser, see 953 N.W.2d at 515–
16 (noting that the trust at issue met the Minnesota statutory requirements for a pooled special
needs trust, but addressing the separate issue of whether a transfer into the pooled special needs
                                               13

contrast, Iowa law mirrors federal law and places no limits on the amount of

funds that can be retained by the trustee of a pooled special needs trust. Iowa

Admin. Code r. 441—75.24(3)(c)(4). DHS’s argument for limits on the Center’s

ability to retain funds from the subaccount is contrary to both Iowa law and the

governing trust documents.

       Even if neither the trust documents nor Iowa law limits the amount of

funds that the Center can retain, DHS argues that the Center can use retained

funds only for a “proper” purpose, including for the benefit of other beneficiaries

of the pooled trust, see Olson, 676 F.3d at 695 (“Residual amounts in the pooled

trust after the beneficiary’s death do not have to be paid back to the state, and

may be kept by the non-profit for the benefit of other pooled-trust beneficiaries.”),

or to cover administration fees and other overhead costs, see Lewis, 685 F.3d at

348–49 (“Retaining the residual enables the trust to cover administrative fees

and other overhead without increasing charges on accounts of living

beneficiaries[.]”). From this premise, DHS argues the Center must account for its

use of any retained funds so that DHS can determine whether the retained funds

are used for an improper purpose, which would entitle DHS to recover some of

the remaining funds.

trust subjected the beneficiary to a transfer penalty, which turned on whether the transfer was
given for “valuable consideration”), the United States Court of Appeals for the Third Circuit held
in Lewis v. Alexander that a Pennsylvania law imposing similar restrictions on a pooled special
needs trust’s ability to retain funds was preempted by Title XIX, see Lewis, 685 F.3d at 346–49
(holding the Pennsylvania statute that limited a trustee to retaining only 50% of remaining trust
balance was preempted by 42 U.S.C. § 1396p(d)(4)(C) because that statute “leaves it to the trust
to decide how much—if any—money should be provided to the State to reimburse it for Medicaid
expenses”). We need not tarry on this issue, however, because Iowa law mirrors federal law on
this point. Compare 42 U.S.C. § 1396p(d)(4)(C)(iv), with Iowa Admin. Code r. 441—75.24(3)(c)(4).
                                               14

       DHS’s position—that it is entitled to an accounting of how the retained

funds are actually used, not just that they were retained for a proper purpose—

cannot be squared with the governing Medicaid statutes or Iowa trust law for

two reasons.

       First, the Center cannot retain the funds until the beneficiary dies, which

simultaneously triggers the termination of the trust and ends the need for any

further accounting. See 42 U.S.C. § 1396p(d)(4)(C)(iv). When the beneficiary dies,

his or her individual trust subaccount terminates and the trustee winds up that

individual subaccount by distributing the trust res and providing a final

accounting. See Iowa Code § 633A.2201(1)(b) (“[A] trust terminates when . . .

[t]he trust purpose is fulfilled.”).7 “On termination of a trust, the trustee may

exercise the powers necessary to wind up the affairs of the trust and distribute

the trust property to those entitled to the trust property.” Id. § 633A.2201(2). For

a pooled special needs trust, distribution of the trust subaccount includes

choosing whether to retain the remaining subaccount balance, in whole or in

part, and remitting any balance first to DHS to reimburse its Medicaid

expenditures and, if any funds remain, then to any residual beneficiaries. See

42 U.S.C. § 1396p(d)(4)(C)(iv); see also Reese, 881 F.3d at 1026 (“The trust

agreement can direct who should receive any assets that might remain after

reimbursement.”).

       7That   the trust subaccount terminates at the beneficiary’s death and must be wound up
is consistent with the trust documents governing Mr. Hewitt’s subaccount. Section 5.08 of the
joinder agreement directs: “At the death of the Beneficiary, the Trustee shall wind up the affairs
of the Trust . . . .”
                                          15

      But once the trust terminates and the trustee distributes the trust assets,

there is no longer a trust to account for. As we recognized in Cox v. Iowa

Department of Human Services, each subaccount managed by a pooled special

needs trust is considered a separate trust for that individual beneficiary.

920 N.W.2d at 551 (describing the required subaccounts as “separate trust

‘accounts’ being maintained for each disabled individual.” (quoting Lewis,

685 F.3d at 333)); see also POMS SI 01120.203D(1) (When “evaluating the trust,

it is important to distinguish between the master trust, which is established

through the actions of the nonprofit association, and the individual trust

accounts within the master trust, which are established through the actions of

the individual or another person or entity for the individual, through a joinder

agreement.” (emphasis added)). Thus, DHS’s interest extended only to

Mr. Hewitt’s individual trust subaccount, and does not entitle it to an accounting

of the Center’s “master trust” account.

      Second, section 1396p(d)(4)(C) gives DHS an interest as a contingent

beneficiary—contingent on whether the trust retains the remaining funds. See

42 U.S.C. § 1396p(d)(4)(C)(iv) (“To the extent that amounts remaining in the

beneficiary’s account upon the death of the beneficiary are not retained by the

trust, the trust pays to the State from such remaining amounts in the account

an amount equal to the total amount of medical assistance paid on behalf of the

beneficiary under the State plan under this subchapter.” (emphasis added)). The

contingency is defeated and DHS’s interest ends under the terms of the statute

when the trust retains the remaining funds, not when it ultimately uses them.
                                        16

This is consistent with Congress’s chosen treatment of pooled special needs

trusts in Title XIX, “intended to shield the trust from repayment obligations”

based on the trust’s retention decision. Lewis, 685 F.3d at 348–49 (identifying

section 1396p(d)(4)(C) as a “protective provision” that “leaves it to the trust to

decide” whether and how much reimbursement the state is entitled to). Because

a trustee’s accounting duty only requires it to keep beneficiaries “reasonably

informed about the administration of the trust and the material facts necessary

to protect the beneficiaries’ interests,” Iowa Code § 633A.4213, and because,

after the trust retains the funds as part of the wind up process, there is no longer

a contingent interest in favor of DHS (or even a trust subaccount to administer),

DHS is only entitled to an accounting showing that the trust retained the funds

for a proper purpose.

      The accounting provided by the Center here informed DHS of the activity

in Mr. Hewitt’s subaccount during the relevant period, that the Center retained

the full remaining balance left at the time of his death, and that the retained

amount would be used “pursuant to the terms of The National Pooled Trust” and

“in furtherance of its nonprofit mission to provide specialized administrative

services for persons with disabilities for the purpose of improving their quality of

life.” The trust documents also identified what the retained funds could not be

used for. Section 6.3 of the National Pooled Trust’s governing document, titled

“Specifically Prohibited Expenses,” expressly prohibits the Center from using

retained funds for improper purposes, including to: “1) pay taxes due from the

estate of a Beneficiary other than those arising from inclusion of the Trust in the
                                                17

estate; 2) pay inheritance taxes due for residual beneficiaries; 3) make payment

of debts owed to third parties; 4) pay for funeral expenses; and/or, 5) make any

payments to residual beneficiaries.”8

       The Center’s affirmation that it retained the funds in the master account

for the benefit of the trust beneficiaries and would not use the funds for the

specified prohibited purposes satisfied its accounting obligations. To impose

continuing accounting obligations until the funds are in fact used would ignore

both that DHS’s contingent interest dissipated when the Center retained the

balance and that the trust terminated, leaving nothing to further report. To the

extent DHS is nevertheless concerned that the trust’s ultimate disposition of

retained funds is improper, there are other avenues by which it can seek to

remedy any suspected misuse. See The Ctr. for Special Needs Tr. Admin., Inc. v.

Iowa Dep’t of Hum. Servs., (In re the Med. Assistance Pooled Special Needs Tr. of

Steven Muller), ___ N.W.2d ___, ___ (Iowa 2023). A petition for an accounting is

not one of them.

                                                     III.

       The district court’s summary judgment is affirmed.

       AFFIRMED.

        8These limitations are also reflected in the Social Security Administration’s Program

Operations Manual System, see POMS SI 01120.203E(2), which is followed by a note: “For the
purpose of prohibiting payments prior to reimbursement of the State(s) for medical assistance, a
pooled trust is not considered a residual or remainder beneficiary. Remember that a pooled trust
has the right to retain funds upon the death of the beneficiary.” Id. (emphasis added). This note
reflects that a pooled trust that retains funds on the death of a beneficiary is not paying itself as
a residual beneficiary but, by statute, is authorized to retain the funds rather than use them to
reimburse the state.