In Re Reynolds

664 N.E.2d 1209 (1996)

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Nature of the Case

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Facts

William and Dorothy were married in 1963 and remained so until her death in 1989. On May 11, 1989, Dorothy created a trust for the purpose of qualifying for Medicaid benefits in the event nursing home care was needed. Dorothy named two of children from a previous marriage as trustees and transferred the majority of her assets to the trust and designated all of her children as remainder beneficiaries. As the settlor of the trust, she relinquished all right, title and interest in the property except for the right to appoint remainder beneficiaries at any time prior to termination of the trust. The limitation on this power was that Dorothy could not appoint herself, her spouse, her creditors, or her estate and its creditors. The trust was to be terminated one day prior to her death. Dorothy died on August 29, 1989, leaving her entire estate to her children from a previous marriage. The will was admitted to probate and her surviving spouse, William, filed notice of election. William objected to the exclusion of inter vivos trust assets from the estate for purposes of computing his elective share. The court decreed that those inter vivos assets were part of the estate. The appeals court disagreed because the transfer was irrevocable and the decedent had relinquished the right to appoint herself or her estate as beneficiary.