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In re Petition of Estate of Braiterman

Supreme Court of New Hampshire

July 12, 2016

PETITION OF ESTATE OF THEA BRAITERMAN (New Hampshire Department of Health and Human Services)

          Argued: May 11, 2016

         Department of Health and Human Services

          Braiterman Law Offices, of Concord (David J. Braiterman on the brief and orally), for the petitioner.

          Joseph A. Foster, attorney general (Megan A. Yaple, attorney, on the brief and orally), for the New Hampshire Department of Health and Human Services.

          DALIANIS, C.J.

         The petitioner, the Estate of Thea Braiterman, filed a petition for writ of certiorari challenging a final decision of the Administrative Appeals Unit (AAU) of the New Hampshire Department of Health and Human Services (DHHS), that upheld the determination that the applicant, Thea Braiterman, was ineligible for Medicaid-Old Age Assistance (Medicaid-OAA) benefits because her assets exceeded the eligibility threshold. See Sup. Ct. R. 11; see also 42 U.S.C. § 1396p(h)(1) (2012) (explaining that, for the purpose of determining Medicaid eligibility, the term "'assets'" includes "all income and resources of the individual and of the individual's spouse"). On appeal, the petitioner contends that the AAU erroneously found that the Thea G. Braiterman Irrevocable Trust (the Trust) was includable as an asset for the purpose of determining the applicant's eligibility for Medicaid-OAA benefits. The petitioner has argued, and DHHS has not disputed, that the petitioner's challenge is not moot even though the applicant is now deceased. Assuming without deciding that the petition is not moot, we deny the petition for a writ of certiorari.

         I. Facts

         A. Procedural Background

         The applicant created the Trust in 1994, naming herself and her son, David J. Braiterman, as trustees. The applicant resigned as a trustee in 2008. However, the Trust authorized the applicant to appoint additional and successor trustees, and the petitioner acknowledges that the applicant could have resumed service as a trustee by appointing herself as an additional or successor trustee.

         The Trust named the applicant's children - David, Ken Braiterman, and Marta Tanenbaum - as the "Legatees." Ken has since died, leaving no issue. Thus, David and Marta are the remaining Legatees.

         When the Trust was created, the applicant granted it all of her real property interests, her personal property interests, and $1.00. The real property included the furnished home in which the applicant and her husband lived. The applicant and her husband lived in the home rent-free until he died in 2004. At some point after her husband died, the applicant moved into an assisted living facility. Thereafter, the furnished home was sold, and, in 2009, the sale proceeds were transferred to an investment account.

         In 2009, the investment account contained approximately $189, 000. By November 2013, the account contained between $130, 000 and $135, 000. Between 2009 (when the applicant entered assisted living) and 2012, regular disbursements from the Trust were made to undisclosed recipients for undisclosed reasons. According to the AAU, the petitioner "equivocated" as to whether either David or Marta used any of the disbursements from the Trust to fund the applicant's expenses. DHHS has not inquired as to whether the disbursements were used to benefit the applicant.

         The applicant resided in a nursing home from January 2014 until her death in March 2016. In February 2014, she applied for Medicaid-OAA. In March 2014, DHHS denied her application on the ground that her assets, which included the Trust (then valued at $156, 000), were "more than the limit set for" Medicaid-OAA. The applicant appealed DHHS's decision to the AAU. Following a hearing, the AAU upheld the determination that the Trust was includable as an asset for the purpose of assessing whether the applicant was eligible for Medicaid-OAA benefits. The applicant unsuccessfully moved for rehearing, and this petition followed.

         B. The Trust

         The Trust Agreement contains 11 clauses, not all of which are relevant to this appeal. The Trust Agreement refers to both the applicant and her son, David, as "Trustee." The applicant is also referred to as "Donor, " and David is listed as one of the "Legatees."

         Clause 3 concerns the applicant's reserved powers and rights as the donor of the Trust. Under Clause 3.1, the applicant reserved the right "to alter the order and number of the successor Trustees . . . or to name additional Trustees or successor Trustees." In Clause 3.2, the applicant reserved "the power, exercisable at any time . . ., to appoint any part or all of the undistributed income of the Trust Fund to any one or more of the Legatees, " including "the power to make lifetime gifts." In Clause 3.3, the applicant reserved "the power, exercisable at any time . . ., to appoint any part or all of the principal of the Trust Fund, outright or upon trusts, conditions or limitations, to any one or more of the Legatees, " including "the power to make lifetime gifts." Under Clause 3.7, the applicant reserved "the power to require the Trustee to accumulate any or all of the income of the Trust Fund."

         Clause 3.6 provides that the applicant did "not retain any interest in the principal or income" of the Trust "by express reservation or by agreement between or among, or assumption of, " the applicant, the trustee, and the Legatees. Clause 3.8 provides that the applicant did "not reserve any power or authority whatever to revoke or amend any provision" of the Trust Agreement.

         Clause 4 concerns dispositions from the Trust during the applicant's lifetime. Pursuant to Clause 4.1, during the applicant's lifetime, the Trustee could "distribute, from time to time, to and among any one or more of the Legatees as may be living, so much of the principal or income of the Trust Fund at such time or times and in such amounts and proportions" as the trustee, in his or her "uncontrolled discretion, [deemed] advisable." Clause 4.1.1 provides:

If, at any time during the lifetime of the [applicant], the [applicant] may lose or may lose eligibility for substantial cash benefits or medical or other services by reason of the existence, size or terms of this Trust, the [applicant] suggests that the Trustee consider taking action to terminate the Trust by distributing the principal and accumulated income of the Trust Fund, if in the judgment of the Trustee such loss of eligibility would likely necessitate expenditures from the Trust for or on behalf of the [applicant] at a rate expected to deplete the Trust substantially and to defeat its supplemental and long-term purposes. The [applicant] expresses the hope that if the Trust is terminated during the lifetime of the [applicant], any persons taking under this paragraph will use a portion of her gift to supplement the income and the governmental benefits and services to which the [applicant] may be entitled by reason of age, disability or otherwise. It is not the intention of the [applicant], however, to impose any legal obligation or trust.
Clause 7.13 provides:
Notwithstanding any other provisions of this instrument except as specifically set forth herein, the discretionary power of the Trustee . . . to distribute principal or income or to determine the size of any such distribution shall not be exercised or exercisable by any Trustee in a manner that will benefit the Trustee personally or anyone whom the Trustee has a legal obligation to support . . . .

         II. Analysis

         A.Standards of ...


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