In re the Matter of:

STATE OF MINNESOTA
IN COURT OF APPEALS
A20-1300

In re the Matter of:

Dorothy Geyen,
Respondent,

vs.

Commissioner of Minnesota Department of Human Services,
Appellant,

Carver County Health and Human Services,
Respondent below.

Filed July 12, 2021
Affirmed and remanded
Cochran, Judge

Carver County District Court
File No. 10-CV-19-1076

John B. Waldron, Waldron Law Offices, Ltd., Wayzata, Minneso ta (for respondent
Dorothy Geyen)

Keith Ellison, Attorney General, Michael N. Leonard, Assistant Attorney General, St. Paul,
Minnesota (for appellant Commissioner of Minnesota Department of Human Services)

Mark Metz, Carver County Attorney, Daniel M. Ryan, Assistant County Attorney, Chaska,
Minnesota (for respondent-below Carver County Health and Human Services)

Considered and decided by Ross, Presiding Judge; Cochran, Judge; and
Frisch, Judge.

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SYLLABUS
Minn. Stat. § 501C.1206(b) (2020), which pr ovides that certain irrevocable trusts
become revocable “for the sole purpose” of determining eligibility for medical assistance
for long-term-care services, is preempted by federal law.
OPINION
COCHRAN, Judge
Appellant Commissioner of the Minneso ta Department of Human Services
challenges a district court order revers ing the commissioner’s determination that
respondent Dorothy Geyen wa s ineligible for medical as sistance for long-term care
(MA-LTC). The commissioner denied Geyen’ s application for MA-LTC based on the
commissioner’s determination that assets in two irrevocable trusts established by Geyen
were available to her under applicable eligibility standards, and as a result, Geyen’s assets
exceeded the MA-LTC eligibility limit. On appeal, the commissioner seeks reversal of the
district court’s order on alternative grounds. The commissioner first argues that the district
court lacked jurisdiction to decide Geyen’s appeal of the commissioner’s decision. The
commissioner next argues that the administrative determination of ineligibility was correct
on the merits.
We conclude that the district court had jurisdiction over Geyen’s appeal of the
commissioner’s decision. We further conclu de, as the district court did, that the
commissioner erred as a matter of law by determining that the irrevocable trust assets were
available to Geyen for purposes of dete rmining Geyen’s elig ibility for MA-LTC.
Specifically, we conclude that the assets in the irrevocable trusts were not available to

3
Geyen under the federal law go verning medical assistance, and that the state statute
purporting to make the assets available is preempted by federal law. We therefore affirm.
FACTS
The facts are undisputed. In July 2011, Geyen created two irrevocable trusts, Trust
A and Trust B. The trust agreements were identical but for their names. Each trust
agreement provided that Geyen was the grantor and two of her children were the trustees.
The beneficiaries of the trusts were Geyen’s children and grandchildren.
The trust agreements indicated that Geyen had or would “irrevocably” transfer cash
or other property to each trust. The trust agreements also empowered the trustees with “full
power and authority to control” trust assets, except that the trustees were specifically
precluded from loaning any assets to Geyen or making any gifts to her. In August 2011,
each trust purchased $25,000 in annuities, which became assets of the trusts.
In February 2019, Geyen applied for MA -LTC with elderly waiver, a type of
Medicaid benefits available through Minnesota’s medical-assistance plan. She submitted
her application to respondent-below Carver County Health and Human Services (the
county).1 The county concluded that Geyen’s “total counted assets” were slightly over
$73,300. In counting Geyen’s total assets, the county include d the trust assets because it
determined that the irrevocable trusts became revocable when Geyen applied for MA-LTC
by operation of Minn. Stat. § 501C.1206 (2020). And, because Geyen’s assets were higher
than the program limit of $3,000, the county sent Geyen an asset-reduction form explaining

1 County social-service agencies “administer medical assistance in their respective counties
under the supervision of” the commissioner. Minn. Stat. § 256B.05, subd. 1 (2020).

4
that she would have to reduce her assets to $3,000 to qualify for MA-LTC. Accordingly,
the county denied Geyen’s application.
In April 2019, Geyen appealed the county’s denial of her MA-LTC application to
the commissioner. Geyen challeng ed the county’s decision to treat the irrevocable trusts
as revocable based on Minn. Stat. § 501C.1206, arguing that the state statute conflicts with
federal law. A human-services judge, ap pointed by the commissioner, heard Geyen’s
appeal and recommended that the commissioner affirm the county’s decision on different
grounds. Instead of concluding that th e trusts became revocable under Minn.
Stat. § 501C.1206, the human-services judge c oncluded that the irre vocable trust assets
were available to Geyen under 42 U.S.C. § 1396p(d)(3)(B) (2018), the federal law
governing the treatment of irrevocable trusts for Medicaid-eligibility purposes. By an order
dated October 7, 2019, the commissioner adopted the recommended decision of the
human-services judge. Geyen submitted a request for reconsideration to the commissioner,
which was denied. In November 2019, Geye n appealed the commissioner’s decision to
district court pursuant to Minn. Stat. § 256.045, subd. 7 (2018).
At the time that the appeal was filed, Geyen resided at a care facility and was behind
on her payments to the facility. In early December 2019, Geyen’s daughter received a
letter from the care facility stating that Geyen would be discharged later that month unless
her outstanding bill was paid in full. To avoid her mother being discharged, Geyen’s
daughter—one of the two trustees—began liquidating the trust assets. After liquidating the
assets, Geyen’s daughter deposited the fund s into Geyen’s persona l checking account.
Geyen’s daughter, a signer (with power of atto rney) but not a joint owner of the account,

5
then paid the care facility fro m Geyen’s checking account. Geyen became eligible for
MA-LTC after payment of the funds from the tr usts to the care facility. In an affidavit
submitted to the district cour t, Geyen’s daughter asserted that she believed that her
liquidation of the trust funds to pay the care-facility bill violated the trust agreements, but
she felt that she had no other choice.
In briefing to the district court, the commissioner first argued that Geyen’s appeal
was moot because Geyen ultimately receive d MA-LTC. The commissioner then made
alternative arguments to support her contention that she properly considered the trust assets
in determining Geyen’s eligibility for MA-LTC. First, the commissioner argued that the
trust assets were available under federal law because the assets coul d be used to benefit
Geyen. Second, the commissioner argued that th e trust assets were available under state
law, specifically Minn. Stat. § 501C.1206(b), because the trusts “became revocable when
[Geyen] applied for MA-LTC.” And, in response to an argument raised by Geyen, the
commissioner argued that Minn. Stat. § 501C.1206(b) was not preempted by federal law.
At oral argument before the district court, counsel for th e commissioner told the
district court that Geyen had passed away not long ago. Counsel went on to argue: “So not
only are there mootness issues, there may be some standing issues as well in this case, as
no one has [been] substituted . . . for Ms. Geyen.”
In August 2020, the district court issu ed its order reversing the commissioner’s
decision. At the outset of its order, the distri ct court acknowledged that Geyen had died.
But the district court declined to address the commissioner’s “standing” argument because
“Geyen was alive at all relevant times pertaining to this action, the action was begun before

6
her death, and her [e]state would step into her shoes regardless.” And the district court
declined to “address the mootness argument raised” by the commissioner because “[i]f the
assets of the Trusts did not ne ed to be depleted . . . the Trusts would have most likely
remained funded and the beneficiaries . . . would have assets to draw from. Damages were
sustained in this case.”
On the merits, the district court determ ined that the commissioner’s decision was
“unsupported by substantial evidence” and “affected by an error of law.” The district court
rejected the commissioner’s conclusion that th e trust assets were av ailable to Geyen for
purposes of determining MA-LTC eligibility. Relying on “the applicable federal law,” the
district court concluded that the irrevocable trusts “should not be vi ewed as assets in
determining” Geyen’s MA-LTC eligibility. In reaching this conclusion, the district court
emphasized that the irrevocable trust agreements “specifically precluded” the trustees from
loaning or gifting any trust a ssets to Geyen, who the dist rict court found was “not a
beneficiary under the Trusts.”
The district court also dete rmined that the trust assets did not become available to
Geyen by virtue of Minn. Stat. § 501C.12 06(b), as argued by the commissioner. The
district court concluded that this state statute is preempted by 42 U.S.C. § 1396p(d)(3)(B)
because the trust assets would be available under state law but unavailable under federal
law for purposes of determining eligibility for MA-LTC. The commissioner now appeals
the district court’s decision.

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ISSUES
I. Did the district court have ju risdiction over Geyen’s appeal?
II. Was the commissioner’s determination th at Geyen was ineligible for medical
assistance affected by an error of law?

ANALYSIS
This case involves Medicaid, which is kno wn as medical assistance in Minnesota,2
and the application of federal Medicaid requ irements to Geyen’s MA -LTC application.
We first provide an overview of Medicaid. We then turn to the spec ific issues raised by
this appeal.
In 1965, Congress enacted Me dicaid as Title XIX of th e Social Security Act.
Atkins v. Rivera , 477 U.S. 154, 156, 106 S. Ct. 2456, 2458 (1986); see 42 U.S.C.
§§ 1396-1396w-5 (2018) (current version of Medicaid).3 Medicaid is “designed to provide
medical assistance to persons whose income and resources are insufficient to meet the costs
of necessary care and services.” Atkins, 477 U.S. at 156, 106 S. Ct. at 2458. Medicaid is
a cooperative federal-state program, in which the federal government shares costs with
states that choose to participate. Id. at 156-57, 106 S. Ct. at 2458. In return, the states must
administer their respective state programs in a manner that complies with federal law. Id.

2 In re Schmalz, 945 N.W.2d 46, 50 (Minn. 2020).
3 The American Rescue Plan Ac t of 2021, Pub. L. No. 117-2, § 9813, 135 St at. 4, 213,
added a new section to Title XIX, but because that section was not part of Title XIX at the
time that the commissioner made her eligib ility determination and does not affect the
resolution of this appeal, we do not otherwise reference it.

8
at 157, 106 S. Ct. at 2458; see also 42 U.S.C. § 1396a (establishing requirements for state
medical-assistance plans).4
States participating in the Medicaid pr ogram are required under federal law to
provide coverage to the “categorically needy.” Atkins, 477 U.S. at 157, 106 S. Ct. at 2458
(quotation omitted); see also 42 U.S.C. § 1396a(a)(10)(A)(i) (requiring a state plan to cover
certain categories of individuals). “The categorically needy ar e those who qualify for
public assistance under the Supplemental Security Income (SSI) program or other federal
programs.” Lewis v. Alexander, 685 F.3d 325, 332 (3d Cir. 2012); see also 42 C.F.R.
§ 435.4 (2020) (defining “categorically needy”). States may elect to also provide coverage
to the “medically needy.” Atkins, 477 U.S. at 157, 106 S. Ct. at 2459; see also 42 U.S.C.
§ 1396a(a)(10)(C). The medically needy are those who, while not categorically needy,
may be eligible for Medicaid because their in come and other resources are within limits
set by a state under its medical-assistance plan . 42 C.F.R. § 435.4 (defining “medically
needy”); see also Schmalz, 945 N.W.2d at 51 (describing the “medically needy” as those
who “incur medical expenses in an amount that effectively reduces their income to roughly
the same position as those” who qualify as categorically needy).
In Minnesota, to be deemed medically ne edy, and therefore eligible for medical
assistance, generally an individual must own no more than $3,000 in countable assets and
have an income not exceeding certain defined thresholds. Schmalz, 945 N.W.2d at 51

4 The American Rescue Plan Act §§ 9811(a )(2), 9812(a) (2021), amended parts of 42
U.S.C. § 1396a, but those amendments are not relevant for purposes of this appeal.

9
(quotation omitted); see Minn. Stat. § 256B.056, subds. 3(a), 4 (2020).5 If an applicant has
assets in excess of the limit, she must “spend down” those assets until they are at or below
the asset limit to qualify for benefits. In re Estate of Barg, 752 N.W.2d 52, 59 (Minn. 2008)
(quotation omitted). Here, the county determined that Ge yen was not medically needy
because, counting the irrevocable trust assets, her total asse ts exceeded the $3,000 asset
limit.
When determining whether an applicant meets the asset limit, a state plan must treat
assets in a trust established by the applicant in accordance with the provisions of 42 U.S.C.
§ 1396p. See 42 U.S.C. § 1396a(a)(18) (providing th at “[a] [s]tate plan for medical
assistance must . . . comply with the provisions of section 1 396p of this title with respect
to . . . treatment of certain trusts”).6 And 42 U.S.C. § 1396p treats trust assets differently
depending on whether the trust is revocable or irrevocable. Assets in a revocable trust
established by an individual are considered “available” to the individual. 42 U.S.C.
§ 1396p(d)(3)(A). Asse ts in an irrevocable trust es tablished by an individual are
considered “available” to the individual “i f there are any circumstances under which
payment from the trust could be made to or for the benefit of the individual.”
Id. (d)(3)(B)(i). But, if the assets cannot be nefit the individual, the corpus of the

5 Minn. Stat. § 256B.056, subd. 3(b) (2020), pr ovides an exception to the asset limit for
persons aged 21 through 64, who are eligible for medical assistance under Minn. Stat.
§ 256B.055, subd. 15 (2020). No party suggests that this exception applies in this case.
6 In a 1993 amendment, “Congress made a delib erate choice to expand the federal role in
defining trusts and their effe ct on Medicaid eligibility.” Lewis, 685 F.3d at 343. The
amendment added the language requiring states to comply with section 1396p with respect
to trusts. Id.

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irrevocable trust shall be considered a transfer of assets by the individual as of the date of
the establishment of the trust and payments from the trust after this date shall be
disregarded. Id. (d)(3)(B)(ii).
In addition to following federal rules rega rding treatment of trust assets, a state’s
methodology for determining Me dicaid eligibility for the me dically needy must be “no
more restrictive” than the federal test used to determine eligibility for SSI. See 42 U.S.C.
§ 1396a(a)(10)(C)(i)(III) (providing requirements for a state’ s standard for determining
who is medically needy). A state’s methodolog y is “no more restrictive” than its federal
counterpart “if, using the methodology, additional individuals may be eligible for medical
assistance and no individuals who are otherwis e eligible are made ineligible for such
assistance.” Id. (r)(2)(B). Central to this appeal is whether the coun ty and then the
commissioner properly denied Geyen’s MA-LTC application on the basis that the funds
held in the irrevocable trusts established by Geyen in 2011 were “available” to Geyen when
she applied for MA-LTC in 2 019 and thus were required to be counted in calculating
whether Geyen met the asset limit for MA-LTC eligibility.
In Minnesota, a person whose applicati on for MA-LTC is denied may appeal and
receive a hearing before a human-services judge appointed by the commissioner. Minn.
Stat. § 256.045, subds. 1, 3(a)(1) (2 020). The human-services judge makes a
recommendation to the commissioner, who issues the final decision. Id., subd. 5 (2020).
An applicant aggrieved by the commissioner’s de cision may appeal to district court. Id.,
subd. 7 (2020). The district court’s decision may in turn be appealed to this court. Id.,

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subd. 9 (2020). With this background in mind, we turn to the specific issues raised in this
appeal.
The commissioner raises jurisdictional and substantive arguments. We first address
the jurisdictional arguments and conclude that the district court retained jurisdiction over
Geyen’s appeal after her death. We th en address the commissioner’s substantive
arguments and conclude that the commissioner erred as a matter of law by determining that
the irrevocable trust assets could be count ed for purposes of determining Geyen’s
eligibility for MA-LTC.
I. The district court retained jurisdic tion over Geyen’s appeal following her
death.
“Jurisdiction refers to a court’s po wer to hear and decide disputes.” McCullough &
Sons, Inc. v. City of Vadnais Heights , 883 N.W.2d 580, 584 (Minn. 2016)
(quotation omitted). We “review issu es of jurisdiction de novo.” Minn. Dep’t of Nat.
Res. v. Chippewa/Swift Joint Bd. of Comm’rs , 925 N.W.2d 244, 247 (Minn. 2019). The
commissioner argues that the district court lacked jurisdiction over Geyen’s appeal because
she died before the district court decide d the matter. The commissioner contends that
Geyen’s death deprived the district court of jurisdiction over the a ppeal because (1) no
party was substituted in place of Geyen after her death, and (2) the issue became moot. We
address the arguments in turn.
A. The failure to substitute a party follo wing Geyen’s death did not deprive the
district court of authority to decide the appeal.

First, the commissioner argues that the di strict court did not have subject-matter
jurisdiction over the appeal because “no part y was substituted after [Geyen’s] death.”

12
“Subject-matter jurisdiction is a court’s power to hear and determine cases of the general
class or category to which the pr oceedings in question belong.” Bode v. Minn. Dep’t of
Nat. Res. , 594 N.W.2d 257, 2 59 (Minn. App. 1999) (quotation omitted), aff’d,
612 N.W.2d 862 (Minn. 2000). “Whether a c ourt has subject-matter jurisdiction to hear
and determine a particular class of actions and the particular questions presented generally
depends on the scope of the co nstitutional and statutor y grant of authority to the court.”
McCullough & Sons, Inc. , 883 N.W.2d at 585 (quotation omitted). Because Minn. Stat.
§ 256.045, subd. 7, authorizes the district court to hear appeals from the commissioner’s
MA-LTC eligibility determinations, we are not faced with an issue of subject-matter
jurisdiction.
Alternatively, the commissioner asserts th at Geyen’s counsel lacked “standing” to
advance the appeal after her death. “Standing is the requirement that a party has a sufficient
stake in a justiciable controversy to seek relief from a court.” State by Humphrey v. Philip
Morris Inc., 551 N.W.2d 490, 493 (Mi nn. 1996). “Standing to appeal may be conferred
by a statute or by the appellant’s st atus as an aggrieved party.” In re Custody of D.T.R. ,
796 N.W.2d 509, 513 (Minn. 2011). A party’s status as an aggrie ved party depends on
whether “there is injury to a legally protected right.” Id. (quotation omitted). Here, Geyen
became an aggrieved party wh en the commissioner denied he r application for MA-LTC.
Further, Geyen was alive when her appeal was filed in district court. We are thus not faced
with an issue of standing. Rather the issue, properly construed, is whether the district court

13
lost authority to decide the appeal fo llowing Geyen’s death because no party was
substituted in her place.7
Under the rules of civil procedure, “[i]f a party dies and the claim is not extinguished
or barred, the court may order substitution of the proper parties.” Minn. R. Civ. P. 25.01(a).
The absence of a motion to substitute under rule 25.01 does not ju stify dismissal of the
action because the rule “does not limit the time within which the motion to substitute must
be made.” Witthuhn v. Durbahn, 157 N.W.2d 360, 361 (Minn. 1968). Becau se the rule
includes no time limit, a party can “make such a motion [for substitution] on remand if her
position is upheld on the merits.” Id. Accordingly, the lack of a motion for substitution
does not justify dismissal of an appeal. Id. And the commissioner does not argue that
Geyen’s death extinguished her appeal. Thus, while Geyen’s attorney should have moved
to substitute a new party in Geyen’s place following her death, his failure to do so did not
deprive the district court of jurisdiction over the action.
In arguing otherwise, the commissioner cites Glaze v. State , 909 N.W.2d 322
(Minn. 2018). The commissioner’s reliance on Glaze is misplaced because Glaze involved
a criminal matter and addressed a different legal issue. In Glaze, the supreme court
considered whether attorneys representing a cr iminal defendant had standing to bring an
appeal on behalf of the defendant after the defendant died. 909 N.W.2d at 325. The
supreme court dismissed the appeal as “nonju sticiable,” concluding that the defendant’s
attorneys lacked standing to appeal because they did not represent an aggrieved party. Id.

7 For the purposes of this appeal, we have co ntinued to refer to the respondent as Geyen
because she is the named party and no other person has been substituted.

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at 326-27. In Glaze, the supreme court discussed Witthuhn and recognized the distinctions
between the two cases. The supreme court noted that Witthuhn established that the absence
of a motion to substitute after the death of a party in a civil matter does not justify the
district court’s order for dismissal because rule 25.01 “does not limit the time within which
the motion to substitute must be made.” Id. at 327 (quoting Witthuhn, 157 N.W.2d at 361).
We see no reason why the rule announced by Witthuhn should not apply here. Because
Geyen was alive when she filed her appeal of the commissioner’s decision in district court,
and because there is no deadline for party substitution under Minn. R. Civ. P. 25.01(a), we
reject the commissioner’s claim that the district court lost jurisdiction to decide Geyen’s
appeal when no substitution was made following her death.8
B. The appeal did not beco me moot on Geyen’s death.
Second, the commissioner argues that the district court “lacked jurisdiction to
decide the underlying issue” because, following Geyen’s death, her appeal “was moot.”
Geyen contends that the appeal before the district court wa s not moot because the trusts
sustained “real damages” as a result of th e commissioner’s denial of Geyen’s MA-LTC
application.
“[T]he general rule is that when, pending appeal, an event occurs that makes a
decision on the merits unnecessary or an award of effective relief impossible, the appeal
should be dismissed as moot.” In re Application of Minnegasco , 565 N.W.2d 706, 710

8 This case is also distinguishable from Glaze in that the commissi oner—rather than the
attorney for the deceased party—appealed to this court. The commissioner has standing to
appeal the district court’s reversal of her eligibility determination, and thus we have
jurisdiction over this appeal notwithstanding Geyen’s death.

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(Minn. 1997). But “[t]he mootness doctrine is not a mechanical rule that is automatically
invoked whenever the underlyi ng dispute between the partie s is settled or otherwise
resolved.” Dean v. City of Winona, 868 N.W.2d 1, 4 (Minn. 2015). Instead, it is a “flexible
discretionary doctrine” that should be applied where “a decision on the merits is no longer
necessary or an award of effective relief is no longer possible.” Id. at 4-5 (quotation
omitted). Where an issue is “functionally ju sticiable and of public importance and
statewide significance,” even if it is techni cally moot, a court should decide the case.
Schmalz, 945 N.W.2d at 49 n.3 (addr essing whether the supreme court had jurisdiction
over the case). “A case is functionally justicia ble if the record contains the raw material
(including effective presentation of both sides of the issues raised) traditionally associated
with effective judicial decision-making.” State v. Rud, 359 N.W.2d 573, 576 (Minn. 1984).
And a case presents an issue of public im portance and statewide significance where it
involves an issue of public concern and further harm could occur if the court were to wait
for a future case to present the issue. See In re Guardianship of Tschumy, 853 N.W.2d 728,
738-41 (Minn. 2014) (discussing cases, including Tschumy, that present an issue of public
importance and statewide significance).
This case closely parallels Schmalz, which also involved a
medical-assistance-eligibility determination and the death of the named party during
the proceedings. 945 N.W.2d at 48-49, 49 n.3. The supreme court reasoned that the case
was “functionally justiciable” because the is sue required de novo review and had been
adequately briefed and argued by the parties. Id. at 49 n.3 . The supreme court then
reasoned that the issue was of “public impor tance and statewide significance” because it

16
implicated “estate planning on th e individual level and the e xpenditure of monies at the
state level.” Id. The supreme court thus concluded th at it had “jurisdiction to decide the
case on its merits.” Id.
Similar to Schmalz, the issue of whether Geyen was eligible for MA-LTC was
briefed and argued by the parties on the merits and involves issues of law. See, e.g., White
Bear Lake Restoration Ass’n ex rel. State v. Minn. Dep’t of Nat. Res. , 946 N.W.2d 373,
379 (Minn. 2020) (stating issues of statutory inte rpretation are questions of law); In re
Stisser Grantor Trust, 818 N.W.2d 495, 502 (Minn. 2012) (indicating that interpretation of
a trust agreement presents a question of law). And the issue is of public importance and
statewide significance because it also implicates “estate pla nning on the individual level
and the expenditure of monies at the state level.” Schmalz, 945 N.W.2d at 49 n.3 .
Therefore, assuming without deciding that Geyen’s appeal became technically moot on her
death, her appeal remained functionally justiciable and the district court properly reached
the merits of the case.
In sum, we are not persuaded by either of the commissioner’s arguments that the
district court lacked ju risdiction over the appeal. Becaus e we conclude that the district
court retained jurisdiction, we now consider whether the district c ourt erred by reversing
the commissioner’s decision that Geyen was ineligible for MA-LTC.
II. The commissioner’s determ ination that Geyen was ineligible for MA-LTC was
legally erroneous.
In an appeal from the denial of medi cal-assistance benefits, we focus on the
commissioner’s decision, which we independen tly review without deferring to the ruling

17
of the district court. In re Gillette Children’ s Specialty Healthcare , 883 N.W.2d 778,
784-85 (Minn. 2016). We may reverse only wh en the challenging party establishes that
the agency’s decision was “(a) in violation of constitutional provisions; (b) in excess of the
statutory authority or jurisdiction of the agency; (c) made upon unlawful procedure;
(d) affected by other error of law; (e) unsupported by substa ntial evidence in view of the
entire record as submitted; or (f) arbitrary or capricious.” Schmalz, 945 N.W.2d at 50
(citing Minn. Stat. § 14.69 (2020)). With this standard in mi nd, we consider whether the
commissioner erred by concluding that the tr ust assets were available to Geyen for
purposes of determining her eligibility for MA-LTC.
The commissioner contends that it was appropr iate to consider the trust assets as
resources available to Geyen in determini ng whether Geyen was eligible for MA-LTC.
The commissioner makes two independent argumen ts in support of her position. The
commissioner first argues that the trust asse ts were “available” under federal law for
purposes of determining Geye n’s MA-LTC eligibility becau se, in the commissioner’s
view, the terms of the trust agreements allowed the assets to be used for Geyen’s benefit.
The commissioner next argues that, even if the irrevocable trust assets were not available
assets under federal law, the trusts became revocable—and thus the trust assets became
available to Geyen—by operation of state la w. And the commissioner disputes Geyen’s
argument, and the district court’s conclusion , that the state law is preempted by federal
law.

18
A. The trust funds were not available under federal law.
Under federal law, the determination of whether assets in an irrevocable trust
established by an individual are cons idered available to the individual for
Medicaid-eligibility purposes depends on whether any por tion of the trust may be
distributed back to or used for the benefit of the individual. Section 1396p provides that
assets in an irrevocable trust established by an individual are available for purposes of
Medicaid eligibility as follows:
[I]f there are any circumstances under which payment
from the trust could be made to or for the benefit of the
individual, the portion of the corpus from which, or the income
on the corpus from which, payment to the individual could be
made shall be considered resources available to the
individual . . . .

42 U.S.C. § 1396p(d)(3)(B)(i) (emphasis added). But if “no payment could under any
circumstances be made to the individual,” then the assets of an irrevocable trust are not
available for Medicaid-eligibility purposes. Id. (d)(3)(B)(ii).9 Such assets are considered
“disposed [of] by the individual” as of the date that the trust was established.10 Id.
Courts have interpreted the “any ci rcumstances” language in 42 U.S.C.
§ 1396p(d)(3)(B)(i) broadly. See, e.g., Daley v. Sec’y of Exec. Office of Health & Human
Servs., 74 N.E.3d 1269, 1274 (Mass. 2017) (explai ning that “[t]he effect of the [any

9 Certain types of trusts are exempted from th e “any circumstances” test, but none of the
exemptions are applicable here. 42 U.S.C. § 1396p(d)(4).
10 A 60-month “look-back” period applies to the establishmen t of such a trust, meaning
that an applicant who transfers assets into an irrevocable tr ust is ineligible for medical
assistance for 60 months following the creation of the trust. 42 U.S.C. § 1396p(c)(1)(A),
(B)(i). Here, the “look-back” period had lapsed because Geye n transferred assets to the
trusts in 2011, more than five years before she applied for MA-LTC in 2019.

19
circumstances] test is that if the trustee is afforded even a peppercorn of discretion . . . the
entire amount that the applicant could receive” is counted as income (quotation omitted)).
If the trustee has any “leeway to respond to emergency and unexpected circumstances, the
total amount available to be paid to address such circumstances is counted as fully available
to the grantor.” 2 Harvey L. McCormick, Medicare and Medicaid Claims and Procedures
§ 27:6 (4th ed. 2020) (quotation omitted). Courts look to the terms of the trust agreement
in determining whether there are any circum stances under which payment from the trust
could be made to or for the benefit of the individual. See, e.g., Daley, 74 N.E.3d at 1276-81
(interpreting trust agreements to determine whether paymen t could be made to benefit
individual under any circumstances).
In the order denying Geyen’s applica tion for MA-LTC, the commissioner applied
the irrevocable-trust language in 42 U. S.C. § 1396p(d)(3)(B ). The commissioner
examined the language of the trusts to de termine whether there were “any circumstances
where payment from the trust[s] could be mad e” to or for the benefit of Geyen. The
commissioner recognized that the trust agreements preclude d the trustees from making
gifts or loans to Geyen. But the commissioner concluded that other provisions of the trust
agreements “do not appear to preclude payments being made to” Geyen. On that basis, the
commissioner concluded that the trust assets were available to Geyen for purposes of
MA-LTC eligibility.
Geyen argues that the commissioner’s inte rpretation of the trust agreements is
erroneous. According to Geyen, the trust ag reements are “clear an d unambiguous” that
Geyen’s intent “was to forever and unequivocally take assets of hers and put them beyond

20
her reach or benefit, much the same as if she were to have otherwise gifted assets at the
time.” Accordingly, Geyen contends that the commissioner erred by concluding that the
trust assets were available to Geyen for medical-assistance-eligibility purposes under
42 U.S.C. § 1396p(d)(3)(B).
When reviewing an agency’s decision, “we are not bound by the decision of the
agency and need not defer to agency expertise” in resolving questions of law. Schmalz,
945 N.W.2d at 50. We review the agency’s in terpretation of written documents de novo,
which here are the trust agreements. Stisser, 818 N.W.2d at 502. In construing a trust
agreement, our purpose is to “ascertain and give effect to the grantor’s intent.” Id. We
must consider the grantor’s “dominant intention, which we must gather from the instrument
as a whole, not isolated words.” Id. (quotation omitted). “Whe n the trust agreement is
unambiguous, we will ascertain the grantor’s intent from the language of the agreement,
without resort to extrinsic evidence.” Id.
With this standard in mind, we review th e identical relevant provisions of Trust A
and Trust B. The trust agreements provide that Geyen “irrevocably transferred or will
transfer” cash or other assets to each trust. The trust agreements specify that Geyen’s
children and grandchildren are the beneficiaries of the trusts. Geyen was not a beneficiary.
The trust agreements further specify in Article 1, paragraph 4 that the “Trustee may not
loan any assets to Grantor.” (Emphasis adde d.) Similarly, the ag reements provide in
Article 2, paragraph 22 that “Trustee may not make gifts to Grantor.” (Emphasis added.)
These provisions of the trust agreements evidence Geyen’s intent that she, as the grantor,
not benefit in any manner from the trusts.

21
Notwithstanding the language of these prov isions, the commissioner contends that
other language in the trust agreements—mos t of which was cited in the commissioner’s
order—indicates that the trust assets could have been used to benef it Geyen. First, the
commissioner argues that the “general language ” of Article 2 of the trust agreements
supports the conclusion that the funds could have been used to be nefit Geyen. That
language states that the “Trustee will have full power and authority to control and manage
the Trust Estate . . . and to do all acts and things which Trustee, in the exercise of Trustee’s
absolute and uncontrolled discretion, may deem needful, desirable, or expedient . . . .” But
in that same paragraph, the trustees’ “full power” is qualified by the language “except as
may be specifically required elsewhere in this Agreement.” Because the trust agreements
specifically prohibited the trustees from making gifts and loans to Geyen, we conclude that
the general language of Article 2 did not authoriz e the trustees to use the trust assets in a
manner that could benefit Geyen.
Second, the commissioner argues that pa ragraphs 8 and 13 of Article 2 include
language that “could allow the trustees” to use the trust funds to benefit Geyen.
Paragraph 8 allows the trustees to allocate all or any part of trust receipts, including “rents,
capital gains, and dividends in cash, stock, or property” between income and principal.
This paragraph does not authorize or contemplate any payments to Geyen (or anyone else).
Paragraph 13 enables the trustees “whenever re quired or permitted to divide or distribute
any trust property.” But no language in this paragraph authorizes the trustees to divide or
distribute property to Geyen, wh o was not a beneficiary of th e trusts. And paragraphs 8
and 13 both include the qualifying language “[u]nless inconsistent with other provisions of

22
this instrument.” In light of the provisions banning gifts and loans to Geyen in “other
provisions,” we conclude th at paragraphs 8 a nd 13 do not support the commissioner’s
position.
Third, the commissioner argues that paragrap h 23 of Article 2 allows the trustees to
use the funds to benefit Geyen. Paragraph 23 of Article 2 allows the trustees to “enter into
one or more irrevocable annuity agreements.” But the commissioner does not explain how
the ability to enter into irrevo cable annuity agreements could have been used to benefit
Geyen. This paragraph provides no support for the commissioner’s position.
Fourth, the commissioner argues that paragr aph 24 of Article 2 allows the trustees
to use the funds to benefit Geyen. This paragraph empowers the trustees “[t]o do any and
all things not inconsistent with the foregoing powers and au thority which Trustee may
deem necessary, advisable, or expedient in the administration of the Trusts created in this
Agreement.” (Emphasis added.) Here again, the language of the paragraph prohibits
actions that are inconsistent w ith other provisions of the tr ust, including the provisions
banning gifts and loans to Geyen.
Reading the trust agreements as a whole and giving effect to the grantor’s intent, we
conclude that none of the pr ovisions relied on by the commissioner allow payments from
the trusts to Geyen or payments for her be nefit. In other words, reading the trust
agreements as a whole, there are no circum stances under which any payment could have
been made to or for the benefit of Geyen. Because the trust agre ements precluded such
payments, the commissioner erred by concludi ng that the funds were available under

23
42 U.S.C. § 1396p(d)(3)(B) for purposes of de termining whether Geyen was eligible for
MA-LTC.
We are not persuaded otherwise by th e commissioner’s argument that the trust
assets were available to Geye n because one of the trustees ultimately liquidated the trust
assets to pay Geyen’s outstanding care-facility bill. The commissioner contends that the
payment to the care facility was not a prohibited gift or loan because the trustee made the
payment “directly” to the care facility. Essentially, the co mmissioner argues that the
payment was not prohibited by the trust agreem ents because it “was not the delivery of a
gift to [Geyen], nor was there any apparent intent to make a gift.”
The commissioner’s argument is misplaced. First, the record shows that the trustee
did not pay the care facility directly. Rather, th e trustee first deposited the money into
Geyen’s checking account and then paid the care facility. Second, the deposit of funds into
Geyen’s bank account and subseque nt payment of the outstandi ng care-facility bill with
those funds was a gift, albeit a prohibited gift, to Geyen. A gift is “[s]omething that is
bestowed voluntarily and without compensation.” The American Heritage Dictionary of
the English Language 741 (5th ed. 2018). The trustee’ s deposit of the trust funds was
voluntarily bestowed to Geyen with no expectation that Geyen would be able to repay the
funds. And the trustee depositing the funds into Geyen’s bank account shows donative
intent and delivery. See Barnier v. Wells , 476 N.W.2d 795, 797 (Minn. App. 1991)
(concluding that payments received met legal el ements of a gift). In her affidavit, the
trustee recognized that she violated the trust agreements by making this gift, but felt that
she had no choice because the care facility thr eatened to evict Geyen. Because the trust

24
agreements prohibited the payment of trust funds to Geyen, the payment itself does not
support the conclusion that the funds were available to Geyen under the terms of the trust
agreements. And, even if the trustee had paid the care facility di rectly, that payment
likewise would have been a pr ohibited gift to Geyen because the payment was for a debt
that Geyen owed and the payment was voluntarily bestowed by the trustee without
compensation. The commissioner’s argument to the contrary is unconvincing.
The commissioner also argues that if Geye n’s “intent was for the trusts to not be
able to pay for the costs of he r long-term care, the trusts coul d have explicitly stated so.”
The commissioner cites In re Carlisle Trust as an example of trust language that explicitly
stated an intent for the trust assets to not supplant medical assistance. 498 N.W.2d 260
(Minn. App. 1993). But, in Carlisle, the trustee had discretion to “make distributions” to
the grantor provided that the distributions were made “only to supplement and not to
supplant such public assistance av ailable for maintenance, health care or other benefits.”
Id. at 265. Where the trustee has the ability to make distributions to the grantor, such
limiting language serves a purpose. But here, wh ere the trust agreements are intended to
prevent any payments under any circumstances to the grantor, language specifically
forbidding payments for long-term care would be redundant.
In sum, because the trust agreements did not permit the trustees to make payments
to or for the benefit of Geyen under an y circumstances, the commissioner erred by
concluding that the trust funds were available to Geyen under 42 U.S.C. § 1396p(d)(3)(B).
And the eventual payment from the trusts to Geyen to satisfy her care-facility bill does not
disturb this conclusion because that payment was not authorized by the trust agreements.

25
As a result, the commissioner’s decision that th e assets from the irre vocable trusts were
countable for MA-LTC-eligibility purposes under 42 U.S.C. § 1396p(d)(3)(B) was
affected by an error of law.
B. The trust funds were not available by operation of state law because federal
law preempts the state statute that purp orts to convert certain irrevocable
trusts to revocable trusts.
The commissioner next argues that even if the trust funds were not available to
Geyen under the provisions of federal law applicable to i rrevocable trusts, the trusts
“actually became revocable” by “operation of Minnesota law” when Geyen applied for
MA-LTC and that the funds were available to Geyen on that basis. 11 We consider first
whether the state law in question, Minn. St at. § 501C.1206(b), caused Geyen’s trusts to
become revocable and second whether this state statute is preempted by federal law.
1. The State Statute
The interpretation of a statute is a question of law that th is court reviews de novo.
State by Smart Growth Minnea polis v. City of Minneapolis , 954 N.W.2d 584, 590
(Minn. 2021). The object of this inquiry “is to ascertain and effectuate the intention of the
legislature.” Id. (quotation omitted). “If the legislative intent is clear, we apply the statute
according to its plain meaning.” Id. (quotation omitted).

11 While the county relied on section 501C.1206, the commissioner’s order was not based
on this legal theory. Instead , the commissioner advanced th is legal theory before the
district court as an alternative ground for affirming the commissioner’s order. The district
court considered the commissioner’s argument and rejected it, concluding that the state law
was preempted by federal law. Because the di strict court decided the issue, we consider
the commissioner’s alternative theory on appeal as well.

26
Minn. Stat. § 501C.1206(b) provides that when a state or local agency makes a
determination on an individual’s application for “long-term care services” provided by the
state’s medical-assistance prog ram, “any irrevocable inter vi vos trust . . . created on or
after July 1, 2005, containing assets or in come of an individual or an individual’s
spouse . . . becomes revocable for the sole purpose of that determination.” (Emphasis
added.)12 The commissioner argues that, by operation of section 501C.1206(b), the
irrevocable trusts established by Geyen in 2011 became revocable for purposes of
determining her eligibility for MA-LTC upon her application in 2019. And based on the
operation of section 501C.1206(b), the commissi oner contends that the trusts should be
treated as revocable trusts rather than irrevoc able trusts under federal law for purposes of
determining Geyen’s eligibility for MA-LTC. The commissione r further contends that,
because the corpus of a revocable trust is considered “availa ble to the individual” under
42 U.S.C. § 1396p(d)(3)(A)(i), the trust fu nds were properly considered resources
available to Geyen for purposes of determining her eligibility for MA-LTC.
We agree that section 501C.1206(b) plainly provides that certain irrevocable trusts
“become[] revocable for the sole purpose of” determining MA-LTC eligibility and thereby
purports to make those trust funds available for MA-LTC eligibility purposes. But that

12 For purposes of section 501C.1206, the term “long-term care services” has the meaning
given in Minn. Stat. § 256B.0595 (2020), dea ling with medical assistance. That statute
defines “long-term care services” to include services in a nursing facility, certain
intermediate-care-facility services, and certain home and community-based services
including those provided pursuant to elderly waiver. Minn. Stat. § 256B.0595, subd. 1(g).

27
conclusion does not end our analysis . The question then becomes whether
section 501C.1206(b) is preempted by federal law.
2. Preemption
Under the Supremacy Clause, the federal government may preempt state law.
U.S. Const. art. VI, cl. 2 (stating that the “Laws of the United States” are “the supreme Law
of the Land; . . . any Thing in the Constitution or Laws of any State to the Contrary
notwithstanding”). Congress may preempt stat e law in one of three ways: “by express
provision, by implication, or by a conflict between federal and state law.” DSCC v. Simon,
950 N.W.2d 280, 287-88 (Minn. 2020) (quotation omitted). Only conflict preemption can
exist in the Medicaid context because, by le aving room for state action, Congress has
neither expressly nor impliedly preempted state law. Barg, 752 N.W.2d at 63. “Conflict
preemption occurs when compliance with both state and fe deral laws is impossible, or
when the state law is an obstacle to the accomplishmen t of Congress’s purpose and
objectives.” Simon, 950 N.W.2d at 288 (quotation omitted).
“Whether federal law preempts state la w is primarily an issue of statutory
interpretation, which we review de novo.” Barg, 752 N.W.2d at 63. The “ultimate
touchstone” of the preemption inqu iry is congressional intent. Id. (quotation omitted).
Though preemption is disfavored, a court w ill determine a state law is preempted if it
conflicts with federal law and the court is “ not able to ascertain an appropriate limiting
construction.” Martin ex rel. Hoff v. City of Rochester , 642 N.W.2d 1, 16 (Minn. 2002).
In the context of Medicaid elig ibility, state programs “must comply with requirements of
federal statutes and regulations.” Schmalz, 945 N.W.2d at 50.

28
One such requirement of federal law is th at state Medicaid pl ans comply with the
provisions of section 1396p with respect to the treatment of trusts. 42 U.S.C.
§ 1396a(a)(18). As discussed above, that federal law provides for different treatment of
revocable and irrevocable trusts established by an individual in determining eligibility for
Medicaid coverage. For revocable trusts, the corpus of the trust shall be considered
available to the individual for eligibility purposes. 42 U.S.C. § 1396p(d)(3)(A)(i). But, for
irrevocable trusts that cannot benefit the individual, states are required to exclude the trust
corpus from consideration in dete rmining eligibility for Medicaid. Id. (d)(3)(B)(ii).
Minnesota law, however, mandates that an irrevocable trust “becomes revocable” for
MA-LTC-eligibility purposes when an applicant applies for MA-LTC if the irrevocable
trust was created on or after July 1, 2005, a nd contains assets of the applicant (or the
applicant’s spouse). Minn. Stat. § 501C.1206( b). By deeming irrevocable trusts to be
revocable “for the sole purpose of [the MA -LTC] determination,” section 501C.1206(b)
conflicts with the federal requirements governing the treatment of irrevocable trusts. And,
as a result, the Minnesota statut e stands as an obstacle to Congress’s intent regarding the
treatment of irrevocable trusts for Medicaid-eligibility purposes.
Section 501C.1206(b) al so conflicts with the federal mandate that the eligibility
requirements for state medical-assistance programs must be “no more restrictive” than the
requirements for eligibility under federal la w. 42 U.S.C. § 1396a(a)(10)(C)(i)(III); see
Geston v. Anderson, 729 F.3d 1077, 1079, 1081-83 (8th Cir. 2013) (analyzing whether a
state methodology was more restrictive than federal eligibility requirements). A program
requirement is considered “no more restrictive” if “additional individuals may be eligible

29
for medical assistance and no individuals who are otherwise eligible are made ineligible
for such assistance .” 42 U.S.C. § 1396a(r)(2)(B) (em phasis added). By virtue of
section 501C.1206(b), Minnesota law is more restrictive than the federal law regarding the
counting of assets contained in an irrevocable trust for eligibility purposes. Federal law
precludes counting assets in an irrevocable trust established by an applicant under certain
circumstances. 42 U.S.C. § 1396p(d)(3)(B)(ii). But section 501C.1 206(b) requires those
same assets in an irrevocable trust created by an applicant on or after July 1, 2005, to be
counted toward the asset limit. This provision of state law renders ineligible applicants
who established irrevocable trusts after July 1, 2005, and who otherwise would be eligible
under federal law.
Thus, section 501C.1206(b) is a more restrictive meth odology than its federal
counterpart because individuals who would ot herwise be eligible under federal law are
deemed ineligible by operati on of the state statute. See 42 U.S.C. § 1396a(r)(2)(B)
(defining “no more restrictive” methodology). And we are una ble to ascertain a limiting
construction that would avoid this conclusi on because section 501C.1206(b) directly
conflicts with the federal rules govern ing assets in irrevocable trusts. See Martin ,
642 N.W.2d at 16 (concluding that no limiting instruction was possible where the state law
was in “direct conflict” with a “clear and broa d” rule of federal law). Accordingly, we
agree with the district court that Minn. Stat. § 501C.1206(b) conflicts with and is therefore
preempted by federal law.
The commissioner’s argument to the contra ry is unavailing. The commissioner
argues that there is no conflict between st ate and federal law because Minn. Stat.

30
§ 256B.056 (2020), not Minn. Stat. § 501C.1206, gove rns eligibility for medical
assistance. The commissioner notes that Minn. Stat. § 256 B.056, subd. 3b(b), requires
trusts to be treated in accord ance with 42 U.S.C. § 1396p( d) for purposes of MA-LTC
determinations and therefore argues that state law accords the same treatment to trusts as
federal law for MA-LTC-eligibility purposes. The commissioner furt her contends that
“section 501C.1206(b) merely makes irrevocable tr usts revocable . . . as a matter of state
property law.”
The commissioner’s argument ignores that section 501C.1206(b) provides that
certain irrevocable trusts “become[] revocable for the sole purpose of” MA-LTC eligibility
determinations. (Emphasis added.) By providi ng that certain irrevocable trusts become
revocable, section 501C.1206(b) by its terms is designed to interfere with the application
of the provisions of 42 U.S.C. § 1396p(d) dealing with irrevocable trusts. Thus,
notwithstanding the language of Minn. Stat. § 256B.056, subd. 3b(b), irrevocable trusts
subject to section 501C.1206(b) will not be treated according to 42 U.S.C. § 1396p(d) if
section 501C.1206(b) is allowed to operate. As a result, Minn. Stat. § 256B.056 does not
cure the conflict that exists between section 501C.1206(b) and 42 U.S.C. § 1396p(d)(3)(B)
for MA-LTC-eligibility purposes.
Further, we are not persuaded otherwise by the commissioner’s contention that
section 501C.1206(b) does not conflict with fe deral law because it is a “matter of state
property law.” A similar argument has prev iously been considered and rejected by a
federal court. In Lewis v. Alexander , Pennsylvania government officials argued that a
Pennsylvania statute governing so-called “special needs trusts” was not preempted by the

31
“no-more-restrictive rule” established in 42 U.S.C. §§ 1396a(a)(10)(C)(i)(III) and
1396a(r)(2)(B) because the Penn sylvania statute was “not directed toward Medicaid
eligibility but rather represent[ed] part of Pe nnsylvania’s general regul ations of trusts.”
276 F.R.D. 421, 429, 437 (E.D. Pa. 2011), aff’d in part and rev’d in part on other grounds,
685 F.3d 325 (3d Cir. 2012). While recogni zing that this argument was “superficially
appealing,” the district court reasoned that the Pennsylvania statute was “not exempt from
a preemption analysis simply because it is a law regulating state trusts.” Id. at 437-38. The
district court explained that, regardless of how a state statute is fram ed, a state statute is
preempted wherever “it is impo ssible to comply with both th e federal and state law” or
“the state law frustrates Congressional intent.” Id. On appeal, the Third Circuit affirmed
the district court’s reasoning in relevant part. Lewis, 685 F.3d at 346-51 (noting that
Congress’s intent is the ultimate touchstone of preemption analysis and concluding several
provisions of the state statute were preempte d). Similarly, section 501C.1206(b) is not
exempt from a preemption analysis simply because it involves the regulation of trusts.
The plain language of section 501C.1206(b) demonstrates that the statute does more
than merely make “irrevocable trusts revocable . . . as a matter of state property law” as
argued by the commissioner. Section 501C.1206 (b) is part of Minnesota’s methodology
for determining MA-LTC eligib ility notwithstanding that it is codified in chapter 506,
dealing with property, rather than chapter 256B. The co mmissioner’s argument to the
contrary elevates form over substance, and we reject it.
In sum, Minn. Stat. § 501C.1206(b) conflic ts with Congress’s intent regarding the
treatment of irrevocable trusts under fede ral law for purposes of determining an

32
individual’s eligibility for Medicaid benefits, including MA-LTC, and is therefore
preempted.
DECISION
Because Geyen’s death did not deprive the district court of jurisdiction to decide her
appeal of the commissioner’s order denying her application for MA-LTC, the district court
did not err by reaching the merits of her appeal. And, because the trust agreements did not
authorize payments from the trust to or for th e benefit of Geyen, and because Minn. Stat.
§ 501C.1206(b) is preempted by federal law, th e district court did not err by concluding
that the commissioner’s determination that Ge yen was ineligible fo r medical assistance
was affected by an error of law. We affirm the district court’s de cision, but because no
party was substituted for Geyen following her death, we remand to the district court to
allow for a motion to substitute a party in place of Geyen.
Affirmed and remanded.