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COMMONWEALTH BANK AND TRUST COMPANY v. COMMONWEALTH PENNSYLVANIA (09/13/89)

decided: September 13, 1989.

COMMONWEALTH BANK AND TRUST COMPANY, N.A., A BANKING CORPORATION DOING BUSINESS IN WILLIAMSPORT, LYCOMING COUNTY, PENNSYLVANIA AND PAUL W. REEDER, AN INDIVIDUAL, PETITIONERS,
v.
COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF PUBLIC WELFARE, RESPONDENT



PETITION FOR REVIEW (DEPARTMENT OF PUBLIC WELFARE).

COUNSEL

Paul W. Reeder, McCormick, Reeder, Nichols, Sarno, Bahl & Knecht, Williamsport, for petitioners.

Edward P. Carey, Pittsburgh, for respondent.

Craig, Doyle and Palladino, JJ.

Author: Palladino

[ 128 Pa. Commw. Page 529]

Commonwealth Bank and Trust Company and Paul W. Reeder, (Petitioners) co-trustees under the will of Robert H. Thorne, appeal from an order of the Department of Public Welfare (DPW) affirming a decision of the Lycoming County Assistance Office (CAO) denying medical assistance benefits for Joan S. Frymire. For the reasons set forth below, we affirm.

The sole issue presented in this appeal is whether the principal of a testamentary trust is a resource which must be considered in determining Mrs. Frymire's medical assistance eligibility. There is no dispute that Mrs. Frymire would be eligible for medical assistance but for the principal in the trust.

Mrs. Frymire's son, Robert H. Thorne, established several trusts through his will for the benefit of his mother, wife, children, and grandchildren. The trust in question (Thorne Trust) reads as follows:

[ 128 Pa. Commw. Page 530]

I give to my Trustees hereinafter named, IN TRUST, the sum of TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) to hold, manage, invest, and reinvest the same, to collect the income, and after paying all expenses incident to the management of the trust, to pay the net income in at least quarterly installments to my Mother, JOAN S. FRYMIRE, during her lifetime, and upon her death the principal then remaining in the hands of my Trustees shall become part of my residuary estate. In addition to the distribution of the net income, I hereby authorize my Trustees, in their uncontrolled discretion, but having in mind the income or principal that may be available to or for her from other sources, to pay over to my Mother so much of the principal of this trust as my Trustees shall deem needful or desirable for her support and maintenance, including medical, surgical, hospital, or other institutional care. If my Mother shall predecease me, then this gift shall have no effect, and the bequest to my Mother, JOAN S. FRYMIRE, shall be void.

The medical assistance program is a cooperative program between the federal and state governments*fn1 and as such is subject to both federal and state regulations. In determining financial eligibility for nursing home care for the elderly, only those individuals who meet the income and resource requirements of the supplemental security income program are eligible. 42 U.S.C. § 1396a(a)(10)(A)(ii)(I) and 42 U.S.C. § 1396a(a)(10)(C)(i)(III). At the time Mrs. Frymire's application for medical assistance was submitted the limitation of resources was $1,900.00. 20 C.F.R. § 416.1205(c). Mrs. Frymire met this requirement, only if the principal of the Thorne Trust was not considered an available resource.

A resource is any "real or personal property which a person has or can make available for partial or total support, including equitable ...


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