You hear radio commercials … You see TV commercials … You get invited to dinner presentations. Elder lawyers are constantly hawking the benefits of protecting your home with an irrevocable trust. Is it as simple as they say on TV? No.
The hard-working legal department at MassHealth serves as a tough adversary, constantly seeking creative ways to invalidate trusts as protection devices. As a taxpayer, I appreciate their diligence. As an elder lawyer helping clients strategize to protect their assets, it can be disheartening.
However, last week a major case was reviewed and affirmed by the Massachusetts Supreme Judicial Court, upholding a woman’s trust. MassHealth argued that a particular right, reserved in her trust negated its protection. The issue: a limited power of appointment.
Limited power of appointment gives the maker of a trust the right to change the trust’s distribution, upon death, to a charity or non-profit organization. This power gives tax benefits in case a trust sells real estate during the life of the maker.
For years, MassHealth has claimed this right invalidates trusts as a protection vehicle, as it can be unreasonably used to benefit the maker. Fortunately, the State’s highest Court disagrees.
In my practice, we approach asset protection from a realistic point of view. We understand MassHealth presents challenges and watch over ongoing disputes, like this case. Our clients and their families benefit by these hard-fought victories.
Attorney James Haroutunian is founder of Priority Law and practices estate planning law. This article was originally published in the Lowell Sun and is for informational purposes only and not to be relied on as legal advice, in any manner.