Irrevocability of Special Needs Trusts: The Tangled Web that is Woven When English Feudal Law is Imported into Modern Determinations of Medicaid Eligibility

Abstract:     
Often personal injury victims who will need costly medical assistance throughout their lives will direct any settlement or judgment they receive into a “Special Needs Trust” (SNT). Federal law allows these individuals to use the trust funds to supplement the medical assistance that is available from basic Medicaid benefits so long as the SNT is an irrevocable trust. Recently, the Social Security Administration (SAA) has disqualified certain trusts, even though they are specifically designated as irrevocable trusts, by applying arcane doctrines from English feudal law, such as the Doctrine of Worthier Title. The article explains these doctrines and examines examples of inconsistent or faulty application of the doctrines by the SSA. The article concludes with a recommendation that the SSA cease its administratively burdensome and at times inappropriate attempts to apply these doctrines and adopt a simple rule that respects that a SNT that is designated as “irrevocable” is in fact irrevocable.

Number of Pages in PDF File: 37

Keywords: trust, special needs trust, personal injury, tort, settlement, judgment, Medicaid, health law, Social Security, Doctrine of Worthier Title, English law, irrevocable trust

JEL Classification: K13, K19, K32, K39

Accepted Paper Series