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State High Court Counts Husband’s Trust As Available Resource

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APRIL 14, 2003 VOLUME 10, NUMBER 41

Almost every state is facing a serious budget crisis in the current economy, and Kansas is no exception. Kansas’ governor projects a $750 million shortfall in the coming year. Last month the Kansas Supreme Court did what it could to help by deciding that Mary Miller would not qualify for Medicaid assistance because of a trust set up by her husband.

When Edward Miller wrote his will in 1978, he may have been thinking about the possibility that his wife might go into a nursing home sometime in the next quarter-century. That may have been why he directed that a trust be established for her benefit, with their daughter as trustee. Mrs. Miller would be entitled to receive all the income from the trust, but principal distributions would be controlled by the trustee. Mrs. Miller signed a document at the time consenting to the trust arrangement.

Mr. Miller died seventeen years later, and the trust was set up as he directed. Mrs. Miller went into a nursing home four years later. Although she had no assets, her husband’s trust was valued at $190,000 and she was receiving monthly income payments of $1,000.

Mrs. Miller applied for Medicaid assistance with nursing home care, but Kansas’ Medicaid agency decided that the trust should be counted as an available resource despite the fact that she had no control over it. The agency reasoned that she would have been entitled to insist on receiving about half the trust principal when her husband died—if she hadn’t consented to the terms of his will seventeen years earlier.

After the Medicaid agency denied her eligibility Mrs. Miller appealed all the way to the highest court in Kansas. Last month that court decided that the Medicaid agency was right, and that Mrs. Miller had effectively created her own trust by acquiescing in her husband’s estate planning arrangement. The Court, quoting itself from an earlier decision, noted that “public assistance funds are ever in short supply, and public policy demands they be restricted to those without resources of their own.” Miller v. State of Kansas Department of Social and Rehabilitation Services, March 7, 2003.

The approach implemented by Mr. Miller is, despite the Kansas Supreme Court’s disapproval, quite plainly contemplated by federal law. The Court’s zeal to save taxpayers dollars is also shortsighted. Mr. Miller did have another option when he wrote his will. He could have simply disinherited his wife, which would have resulted in her achieving Medicaid eligibility; without the trust contained in his will, the couple’s children would also have saved the monthly income checks now being made to the nursing home for the rest of Mrs. Miller’s life. The other cost forced on individuals by the Kansas decision is less clear, but it becomes increasingly important to secure good legal advice in order to protect as much of an individual’s (or a couple’s) estate as possible from the high cost of nursing home care. The cost of that legal advice itself ultimately comes from nursing home payments and therefore increases the cost to Medicaid programs.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.