IN RE: Robert C. LYNCH.

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Surrogate's Court, Onondaga County, New York.

IN RE: Robert C. LYNCH.

Decided: October 26, 1999

Boyle & Anderson (Charles H. Lynch, Jr., Auburn, of counsel), for petitioner.

This opinion was withdrawn from the Official Reports at the direction of the authoring judge after it was published in the New York Supplement.

Initially, with respect to its approval of a proposed supplemental needs trust, the Court reviews the proposed trust instrument to determine whether its terms satisfy the relevant statutory requirements and case authority (see, EPTL 7-1.12;  Omnibus Budget Reconciliation Act of 1993 [“OBRA 1993]”, 42 USC § 1396p[d][4][A];  Social Services Law § 366 [2][b][2][iii];  Matter of Goldblatt, 162 Misc.2d 888, 618 N.Y.S.2d 959;  Matter of Morales, N.Y.L.J., July 28, 1995, at 25, col. 1).   This is done in order to protect the disabled person's interests, as well as to ensure the fulfillment of fiduciary obligations and compliance with the controlling laws and rules regarding eligibility for government benefits.

In this case petitioner, the sister and guardian of Robert Christopher Lynch, seeks to have a supplemental needs trust funded solely with Robert's social security disability income payments in the amount of $1,218.00 per month.   Apparently he has no other assets. Through the establishment of such a supplemental needs trust, petitioner seeks to shelter Robert's income and thus eliminate his current payments of $293.00 per month to New York State as a “Medicaid spend down”.   These payments enable Robert to qualify for medicaid benefits.

Although there is no question that the intention behind this application is well-meaning, the Court is troubled by the concept of funding a supplemental needs trust with benefits received from governmental entitlements which are granted to help provide the recipient with the necessities of life, which in this case include medicaid coverage.   It is implicit that such entitlements are to be used presently to achieve this goal.   A supplemental needs trust is normally established to supply funding for those niceties of life not provided through government programs or otherwise (EPTL § 7-1.12(a)(5);  Sullivan v. County of Suffolk, 1 F.Supp.2d 186, aff'd, 174 F.3d 282).   It is not the purpose of such a trust to be used as a vehicle to isolate entitlement funds in order to enhance an individual's eligibility for greater governmental benefits.

Accordingly the Court finds that such a proposed hoarding of entitlement funds flies in the face of the rationale supporting entitlement programs and is against public policy.   In this regard it is noted that these entitlements are funded from the public treasury, which is not a bottomless pit.   While the Court commends the petitioner for attempting to garner the most favorable accumulation of assets for her ward, the Court must deny the petition in its entirety.