Ronald Flygare’s will left a portion of his estate in trust for his wife Lillian. The couple’s son Marcus, as trustee, was permitted to use the money for his mother’s "proper support and maintenance," but the trust prohibited him from making any distributions if Mrs. Flygare would otherwise be eligible for public benefits.

Ten years after Mr. Flygare’s death Mrs. Flygare had used up all of her own funds and those she had inherited outright from her husband. The only resource available to her was the money in her husband’s trust, and she needed assistance with her medical care. Her son applied for Medicaid, arguing that the trust was not an available resource because of its limiting language.

Minnesota, where the Flygares live, has adopted a state statute declaring that language like that included in Mr. Flygare’s trust is void because it violates public policy. The key question under state law became whether the trust is a support trust or a supplemental needs (more frequently referred to as special needs) trust. The state Medicaid agency determined that the trust was intended to support Mrs. Flygare, and treated all of the trust assets as available to her. That resulted in denial of eligibility for medical assistance.

The Minnesota Court of Appeals agreed with the Medicaid agency. "The clear purpose of this trust was to insure that [Mrs. Flygare’s] basic needs are met," ruled the appellate court, and therefore the trust is properly characterized as a "support" trust.

Because he (as trustee) was given authority to decide what money should be spent for Mrs. Flygare’s needs, argued her son, the trust should properly be characterized as a discretionary trust. Then the entire document could be read without the limiting language disallowed by state law, and it would be clear that Mrs. Flygare could not sue to compel any particular distribution—and that the trust should therefore not be treated as an available resource. Not so, ruled the judges: "she has the ability to bring an action to compel the trustee to make payments as necessary to provide for her proper support and maintenance." In the Appeal of Flygare, December 19, 2006.

Assuming that protecting his money from nursing home expenses was a key priority for Mr. Flygare, how might he have written his trust differently? According to the Court of Appeals, he could have prohibited any use of trust funds for necessities of life—for food and shelter. The inclusion of the words "support and maintenance," however, made it impossible to argue that the trust was truly a discretionary, and not a support, trust.

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