Strojek Ex Rel. Mills v. Hardin County Board of Supervisors
1999 Iowa App. LEXIS 33, 602 N.W.2d 566, 1999 WL 775944 (1999)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Iowa recognizes the concept of a “discretionary support trust,” where a trust combining mandatory support provisions with trustee discretion allows assets necessary for the beneficiary's basic needs to be considered when determining eligibility for public assistance.
Facts:
- Marie Strojek, a mentally handicapped 63-year-old, has resided at Opportunity Village in Clear Lake, Iowa, since February 1981.
- Hardin County paid approximately $21,900 annually for Strojek's care at Opportunity Village.
- Marie Strojek is the beneficiary of a testamentary trust established by her late father.
- The trust provision dictated that the trustee "shall, from time to time, pay to or apply for the benefit of my daughter, Marie Helen Strojek, such sums from the income and principal as my trustee in the exercise of her sole discretion deems necessary or advisable, to provide for her proper care, support, maintenance and education."
- After Strojek's mother died, her estate was divided equally between Marie Strojek and her sister, Caroline Mills; Mills was appointed as Strojek's trustee.
- The trust assets included approximately $70,000 in C.D.s and bank accounts and an undivided one-half interest in a 200-acre farm.
- Caroline Mills annually donated $10,000 from the trust to Hardin County to assist with Marie Strojek's care costs.
- On July 1, 1996, Hardin County enacted the Hardin County Mental Health Services Plan, which included income and resource eligibility criteria for county-sponsored benefits.
- In April 1997, Hardin County informed Caroline Mills that Marie Strojek no longer qualified for county assistance because her trust assets exceeded the eligibility minimums under the new plan.
Procedural Posture:
- Hardin County informed Caroline Mills that Marie Strojek no longer qualified for county assistance.
- Marie Strojek filed an appeal with the Hardin County Board of Supervisors.
- The Hardin County Board of Supervisors affirmed the County's decision to disqualify Strojek.
- Marie Strojek sought judicial review in the district court.
- The district court reclassified the petition as one for a writ of certiorari.
- The district court ruled that the assets of Strojek’s trust could be used to determine her eligibility for county funding, characterizing the trust as a support trust with a spendthrift provision.
- Marie Strojek appealed the district court's ruling (as appellant), and Hardin County filed a cross-appeal (as cross-appellant) to the Court of Appeals of Iowa.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Can the assets of a testamentary trust, which directs the trustee to pay sums for the beneficiary's proper care, support, maintenance, and education, but also grants the trustee “sole discretion” in making distributions, be considered when determining the beneficiary's eligibility for county-funded mental health services?
Opinions:
Majority - Streit, P.J.
Yes, the assets of Marie Strojek's testamentary trust can be considered when determining her eligibility for county-funded mental health services because the trust is a "discretionary support trust." The court found the language of the trust to be equivocal, blending mandatory support language ("shall... pay... for her proper care, support, maintenance and education") with broad trustee discretion ("sole discretion"). Rather than forcing the trust into the traditional rigid categories of pure 'support trusts' or 'discretionary trusts,' which would lead to inconsistencies, the court adopted the concept of a 'discretionary support trust,' as established in Nebraska law. This hybrid trust type recognizes that while the trustee retains broad discretionary powers, there is an underlying requirement to make minimal distributions necessary for the beneficiary's basic support. The court reasoned that this interpretation harmonizes the seemingly conflicting terms and, more importantly, best reflects the settlor's intent. Examining the four corners of the will, the scheme of distribution (where the trustee would inherit remaining assets), and the surrounding circumstances (Marie Strojek's lifelong mental handicap and inability to support herself), the court concluded that the settlor's primary intent was to prevent his daughter from becoming destitute. Therefore, assets deemed necessary for Strojek’s basic needs could be reached by third-party creditors like the County, making them countable for eligibility determination. The district court's conclusion was affirmed, but its rationale was modified.
Analysis:
This case is significant for Iowa trust law as it formally recognizes the 'discretionary support trust,' providing a crucial tool for interpreting trusts that combine elements of both support and discretionary trusts. This recognition helps resolve ambiguities in trust instruments and better aligns judicial interpretation with a settlor's true intent, particularly for beneficiaries with long-term care needs. For future trust drafting, it underscores the necessity of clear, unambiguous language if the intent is to shield trust assets from consideration for public assistance eligibility, as trusts designed to ensure basic support will likely be deemed available. This precedent ensures that funds intended for a beneficiary's fundamental care are indeed utilized for that purpose before public funds are allocated.
