On appeal from Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. 300260.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Ashrafi, Hayden and Lisa.
The opinion of the court was delivered by LISA, J.A.D. (retired and temporarily assigned on recall).
This appeal requires determination of where the jurisdiction of the Chancery Court ends, in its oversight of trust expenditures under Title 3B, and where the jurisdiction of the Division of Medical Assistance and Health Services (DMAHS or Division) begins in making Medicaid eligibility determinations.
The Division appeals from certain provisions in the January 18, 2011 Chancery Division order approving acquisition by a special needs trust of residential real property for the benefit of the beneficiary, and related matters, and the June 7, 2011 order denying the Division's motion for reconsideration. The substantive order was issued pursuant to the request of the co-trustee, Bank of America (BOA), for instructions regarding its proposed acquisition of the property and incurring expenses connected with maintenance of the property and expenses for the care of the beneficiary. The court approved acquisition of the property, ratified certain past expenditures, and approved similar anticipated future expenditures. The court determined that the acquisition and expenditures were for the "sole benefit" of the beneficiary and that they "shall not act to deprive [the beneficiary] of any government funds or benefits, including, but not limited to, Medicaid."
No application for Medicaid benefits had ever been made by or on behalf of the beneficiary. DMAHS was served with the pleadings as an interested party. It promptly notified the court and counsel for all parties that it took no position regarding the relief requested, i.e. authorization for acquisition of the property and making the requested expenditures. However, it expressed its position that, although the court could provide guidance on the effect of these transactions on the beneficiary's possible future Medicaid eligibility, the court lacked jurisdiction to address the qualification of an asset for purposes of Medicaid eligibility. Therefore, DMAHS stated that if the beneficiary should ever apply for Medicaid benefits, it did not waive any right to review at that time all transactions and resources, and only it could make a Medicaid eligibility determination.
On appeal, the Division argues that the language in the January 18, 2011 order making prospective Medicaid determinations must be stricken because the Chancery Division lacks subject matter jurisdiction to make such determinations, which, by law, can only be made by the Division. We agree.
Accordingly, we reverse and remand for entry of an amended order.
The beneficiary of the trust, A.N., is presently seventeen years old. She suffers from quadriplegic cerebral palsy and is fully dependent on others. Her father is E.N., and her mother is S.N. No application has ever been made on behalf of A.N. for Social Security or Medicaid benefits. Her medical expenses have been paid by her father's private medical insurance and by funds in the trust.
The trust was created in 2000 pursuant to a Law Division order in Hudson County in litigation in which the beneficiary was plaintiff and received a monetary award, which, in turn, funded the trust. Her parents created the special needs trust pursuant to 42 U.S.C.A. § 1396p(d)(4)(A) and 42 U.S.C.A. § 1382b(e)(5). Her parents are co-trustees, along with BOA, the corporate co-trustee.
E.N. and S.N. separated in 2006. S.N. remains in the family home in Elmwood Park with her daughter, A.N., as well as A.N.'s maternal grandmother, who assists her in caring for A.N. The home has been renovated to accommodate A.N.'s special needs.
Because of family financial difficulties, the home was threatened with foreclosure, as a result of which, in November 2008, the trust began assuming the mortgage payments and carrying costs. E.N. and S.N. wanted the trust to purchase the home for their daughter's benefit. They also sought to ...