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In re Horton Irrevocable Trust Date February

August 26, 2003

IN RE: THE MATTER OF THE JOHN R. HORTON IRREVOCABLE TRUST DATED FEBRUARY, 1981.


Crow Wing County District Court File No. C48140656

Considered and decided by Willis, Presiding Judge, Hudson, Judge, and Forsberg, Judge.*fn1

SYLLABUS BY THE COURT

A county social-service agency responsible for providing a discharge treatment plan for a trust beneficiary that includes ascertaining the financial resources available to pay for the treatment is an "interested person" within the meaning of Minn. Stat. § 501B.16 (2002) and has standing to petition the district court for an order determining the availability of trust assets for medical purposes.

The opinion of the court was delivered by: Hudson, Judge

Affirmed; motion denied

OPINION

Trust beneficiary John R. Horton is incapacitated and has been civilly committed by Crow Wing County to the Brainerd Regional Treatment Center. Crow Wing County Social Services (CWCSS) seeks review of a district court order concluding that the assets of the John R. Horton Irrevocable Trust were not "available" liquid assets, thus relieving the trustee from any obligation to fund Horton's placement in a less-restrictive, adult-care facility. Because we conclude that the John R. Horton Irrevocable Trust is a discretionary trust and the settlor did not intend for the trust to supplant public assistance, we affirm. Because our review is confined to statements supported by the record, CWCSS's motion to strike statements in respondent's brief as outside the trial record is denied.

FACTS

In the late 1970s, John R. Horton (Horton) was injured in a boating accident in which he sustained a severe head injury. In a subsequent trial, Horton was awarded damages. See Horton v. Orbeth, Inc., 342 N.W.2d 112 (Minn. 1984). In 1981, the JohnáR. Horton Irrevocable Trust (Horton Trust) was created, funded by the lawsuit damage award; Horton's parents, Edward and Francis Horton, served as the initial trustees of the Horton Trust. Bernhard Warling (respondent) became trustee approximately two years ago. Horton, though unmarried at the time the trust was created, subsequently married and has two children. Horton, his wife Rita Horton, and their two children are the trust beneficiaries. Currently, the trust has approximately $293,000 in assets.

In August 2001, Rita Horton lost her job; subsequently, she and John Horton applied to the Minnesota Department of Human Services for medical assistance but were denied assistance because of excess assets.*fn2 The Hortons appealed the denial. On December 12, 2001, the Minnesota Department of Human Services affirmed the denial of medical assistance, concluding that the assets in the Horton Trust, which exceeded the $3,000 (or $6,000 for a household) limit for personal assets,*fn3 were available assets for the purpose of determining medical-assistance eligibility. The Horton children, who have special needs, continue to receive medical assistance.

Horton's medical condition deteriorated, and on February 19, 2002, Horton was civilly committed by petition of Crow Wing County to the Brainerd Regional Treatment Center. In compliance with the Minnesota civil-commitment statute,*fn4 CWCSS determined that the least-restrictive alternative placement for Horton is an adult foster-care facility in Pequot Lakes, Minnesota. The monthly care cost is approximately $3,500.

CWCSS requested that respondent approve Horton's placement plan and guarantee payment for the monthly cost. Respondent has not agreed to expend funds for Horton's placement in the adult-care facility and believes authorizing such funds would exceed the scope of his authority as trustee. Respondent contends that CWCSS should be responsible for financing Horton's placement if it believes that such placement is in Horton's best interests. Respondent further contends that because the trustee currently owns a home in which Horton could reside, a separate housing expense is unnecessary.

On July 11, 2002, pursuant to Minn. Stat. § 501B.16 (2002), CWCSS petitioned the district court for an order directing respondent to make trust assets available for any placement it deemed medically necessary for Horton. Pursuant to Minn. Stat. § 501B.18 (2002), CWCSS published a copy of the order for hearing in a legal newspaper. CWCSS then mailed a copy of the hearing order to respondent's attorney and to Horton in care of the Brainerd Regional Human Services Center.

In respondent's answer to CWCSS's petition, he argued, among other things, that CWCSS lacked standing to petition the district court for an order; that CWCSS failed to state a claim on which relief could be granted; and that the district court lacked subject-matter jurisdiction and personal jurisdiction over respondent. Pursuant to stipulation, the parties agreed that the only issue the district court was to decide was whether respondent is obligated to expend monies for the care of John R. Horton. The district ...


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