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SJC Issues Favorable Decision for Irrevocable Income Only Trusts

On May 30, 2017, the Supreme Judicial Court vacated the judgments of the Worcester County Superior Court companion cases, Daley and Nadeau, concluding that the right to use and occupy a residence does not make the assets contained within an irrevocable income only trust countable for MassHealth purposes.  The cases, which were argued before the SJC on January 5, 2017, will undoubtedly have a significant impact on the landscape of asset protection planning for long-term care purposes as the previously unsettled case law made it difficult for seniors to effectively plan for future nursing home care costs.  Irrevocable income only trusts, which were historically time-tested tools for protecting a nursing home resident’s home from a MassHealth lien, have been at the epicenter of elder law litigation since 2009.  With a favorable SJC decision on these cases, elder law attorneys and their clients can breathe a sigh of relief regarding previously created trusts which allow the grantor to continue to live in the home transferred into the irrevocable trust.  Going forward, elder law attorneys can feel more confident about advising their clients on the use of these protective instruments.

Click here to read the decision:

http://www.mass.gov/courts/docs/sjc/reporter-of-decisions/new-opinions/12200.pdf

Click here to read previous posts on this issue:

http://ssbllc.com/blog/masshealths-treatment-of-irrevocable-income-only-trusts-as-murky-as-ever/

http://ssbllc.com/blog/irrevocable-trust-update-favorable-decision-from-the-massachusetts-appeals-court-is-a-battle-won-but-not-the-end-of-the-war/

http://ssbllc.com/blog/time-for-the-big-leagues-irrevocable-trusts-get-called-up-to-the-sjc/

http://ssbllc.com/blog/options-to-protect-the-primary-residence-from-long-term-care-costs/

If you have specific questions about protecting your home from long-term care costs, please call our office  at 781/461-1020 and schedule an appointment with one of our attorneys.