McNiff v. Olmsted County Welfare Dept.
| Decision Date | 24 April 1970 |
| Docket Number | No. 41799,41799 |
| Citation | 176 N.W.2d 888,287 Minn. 40 |
| Parties | Mrs. Mildred McNIFF, Respondent, v. OLMSTED COUNTY WELFARE DEPARTMENT, Appellant, Department of Public Welfare of State of Minnesota, Appellant. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
1. It is the cardinal rule of will construction that the intention of the testator, as expressed in the language used in the will, shall be controlling if it is not inconsistent with the rules of law. Such intention 2. It does not appear from the language of the will that it was the intention of the testator to grant the trustee discretion to apply income or principal in favor of one beneficiary to the total exclusion of the other unless alternative means of support were available.
is to be gathered from everything contained within the four corners of the instrument, read in the light of surrounding circumstances.
3. A trustee may totally exclude from benefits of a trust one or more members of a class of beneficiaries only when the settlor expressly grants the trustee discretion to exclude a beneficiary. The testator in the instant case did not grant the trustee authority to exclude either of the beneficiaries. Rather, his express intent was to provide for both his widow and his daughter.
4. The term 'liquid assets' cannot, without doing injustice to the purpose of the medical assistance program as stated in Minn.St. 256B.01, be interpreted so narrowly as to exclude respondent's interest in the trust herein construed. The purpose of that program is to provide '(m)edical assistance for needy persons whose resources are not adequate to meet the cost of such care * * *.' Those persons with adequate resources are not entitled to medical assistance.
5. Pursuant to Minn.St. 501.17, the beneficiary of an express trust takes 'no estate or interest in the lands but may enforce the performance of the trust in equity.' This right is sufficient to qualify the trust under which the right arises as a 'liquid asset.'
6. Minn.St. 256B.07 lists certain property items which are not to be considered as resources available to meet medical needs when liquidation would cause undue hardship. Since a private trust is not among the items mentioned, we conclude that the legislature intended trust assets to be included among the resources of potential medical assistance recipients.
Eldon J. Huisman, Rochester, for Olmsted Co. Welfare Dept.
Douglas M. Head, Atty. Gen., Richard H. Kyle, Sol. Gen., Eric B. Schultz, Asst. Atty. Gen., Craig R. Anderson, Sp. Asst. Atty. Gen., St. Pual, for Dept. of Pub. Welfare of State.
Brown, Bins & Ring, Rochester, for respondent.
Heard before KNUTSON, C.J., and NELSON, MURPHY, OTIS, and THEODORE B. KNUDSON, JJ.
Appeal by the State of Minnesota, Department of Public Welfare, and the Olmsted County Welfare Department from an order of the Olmsted County District Court reversing a decision of the commissioner of public welfare which had affirmed a cancellation of respondent's public medical assistance grant.
Since September 1966, respondent has been confined, as an invalid, to the Samaritan Nursing Home in Rochester, Minnesota. Through August 1967, the cost of her care at the nursing home was met through the medical assistance program (medicaid) pursuant to Minn.St. c. 256B. On September 1, 1967, her medical assistance was canceled when the Olmsted County Welfare Department learned that her husband's estate was in probate and that his will would establish a trust in the the amount of approximately $22,000 for the benefit of respondent are her 28-year-old mentally retarded daughter.
An appeal was taken to the Department of Public Welfare, which ruled that respondent's interest in the testamentary trust placed her outside the class of persons eligible for medical assistance. Under Minn.St. 256B.06(7), this class is restricted to individuals who, 'if single, (do) not have more than $750 in cash or liquid assets * * *.' 1
The case was appealed to the district court, which reversed the department's findings on the ground that respondent did not acquire an interest in the trust amounting to more than $750 in cash or liquid assets. The reversal was based upon the discretionary nature of the trust, under which, according to the court's reasoning, the trustee could in his discretion totally exclude the testator's widow from receiving any benefits from the trust. The court found the following provision of the will pertinent:
'Until the death of the survivor of either my wife, Mildred J. McNiff, or my daughter, Susan Jane McNiff, the trustee shall administer the trust estate for the benefit of my wife and my said daughter, or the survivor of either, and the trustee shall apply the income in such proportion together with such amounts of the principal as the trustee, in its discretion, deems advisable for the maintenance, care, support and education of both my wife and my said daughter.'
The trust also contains a spendthrift provision.
The district court thereupon determined that the order of the Department of Public Welfare was null and void, and it further ordered the department to provide medical assistance for respondent.
The following issues are involved on this appeal: (1) Does the trust instrument permit the trustee in his uncontrolled discretion to totally exclude one of the two beneficiaries from beneficial enjoyment of either the corpus or the income? (2) Does respondent's interest in the trust make her ineligible for medical assistance under Minn.St. c. 256B?
1. It is the cardinal rule of will construction that the intention of the testator, as expressed in the language used in the will, shall be controlling if it is not inconsistent with the rules of law. Such intention is to be gathered from everything contained within the four corners of the instrument, read in the light of surrounding circumstances. In re Trusteeship Created Under Will of Ordean, 195 Minn. 120, 125, 261 N.W. 706, 708; In re Trust Created by Will of Tuthill, 247 Minn. 122, 76 N.W.2d 499.
2. The provision of the will quoted above contains language conferring discretion on ...
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