On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Hunterdon County, Docket No. FD-10-0224-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted August 13, 2012
Before Judges Sapp-Peterson and St. John.
Marcos Cozze, Jr. appeals from a September 19, 2011 Family Part order, ruling that income from his Self Settled Special Needs Trust*fn1 (Trust) be recognized for the purpose of calculating his child support obligation. There is no dispute that the terms of the trust met the requirements of the Federal Medicaid statute, 42 U.S.C.A. § 1396p(d)(4)(A). In that section, Congress specifically permitted a Medicaid recipient to shield certain funds from consideration for his or her Medicaid eligibility by creating a supplemental needs trust, provided that after the recipient died any remaining funds in the trust were paid to the State "up to an amount equal to the total medical assistance paid on behalf of the individual." 42 U.S.C.A. § 1396p(d)(4)(A).
The Federal Medicaid statute, 42 U.S.C.A. § 1396p(d)(1), counts for purposes of "an individual's eligibility for, or amount of, benefits under a State plan," assets placed in a "trust established by such individual." However, subsection (d)(1) recognizes an exception for supplemental needs trusts created pursuant to 42 U.S.C.A. § 1396p(d)(4). Section (d)(4) defines two different types of trusts that may be created for a disabled person. These trusts are described in subsections (A) and (B):
(4) This subsection shall not apply to any of the following trusts:
(A) A trust containing the assets of an individual under age 65 who is disabled . . . and which is established for the benefit of such individual by a parent, grandparent, legal guardian of the individual, or a court if the State will receive all amounts remaining in the trust upon the death of such individual up to an amount equal to the total medical assistance paid on behalf of the individual under a State plan under this subchapter.
(B) A trust established in a State for the benefit of an individual if--(i) the trust is composed only of pension, Social Security, and other income to the individual (and accumulated income in the trust),
(ii) the State will receive all amounts remaining in the trust upon the death of such individual up to an amount equal to the total medical assistance paid on behalf of the individual under a State plan under this subchapter, and
(iii) the State makes medical assistance available to individuals described in section 1396a(a)(10)(A)(ii)(V) of this title, but does not make such assistance available to individuals for nursing facility services under section 1396a(a)(10)(C) of this title.
[42 U.S.C.A. § 1396p(d)(4).]
Section (B), which permits Miller trusts,*fn2 does not apply in New Jersey because New Jersey has adopted the medically needy nursing home Medicaid program. See N.J.S.A. 30:4D-3i(8). Only section (A) applies to New Jersey's Medicaid program.
Cozze contended before the Family Part judge, and Mazyk conceded, that a New Jersey court cannot order the Trustee of the Trust to make disbursements ...