Court Holds State Can Recover from SNT

In Herting v. California Dep’t of Health Care Services, Cal.App.Ct., No. H040220 (6th Dist., March 27, 2015), a California appeals court held that the state can recover $400,000 from a first-party special needs trust established for a beneficiary under the age of 55. 

When Alexandria Pomianowski was injured in a car crash at age 19, she received a $1,424,019.39 settlement that was subsequently placed into a first-party special needs trust for her benefit. Alexandria died several years later, with over a million in the trust.  The Department of Health Care Services was quick to file a $417,812 claim for Medicaid reimbursement against the trust. 

Alexandria’s mother, overseer of the trust, petitioned the court to terminate the trust and deny the Department’s reimbursement claim.  The trial court granted the petition to settle the trust, yet also granted the Department’s claim.  In upholding the trial court’s decision, the Court of Appeals determined that the language in the state and federal laws preventing recovery for services provided to under 55-year-old Medicaid beneficiaries “apply to recovery from the aid recipient’s estate, whereas the Department’s claim was made pursuant to the statutes governing special needs trusts and the terms of the trust at issue.”

See State Can Recover From SNT Even Though Beneficiary is Under 55 Years Old, Elder Law Answers, 2015.