The State of New Jersey has taken the position that money in a QSF is an available source of income and resources for New Jersey Medicaid beneficiaries. In the words of the State’s attorney: “It is irrelevant that he did not receive distributions and was unable to direct distributions to himself.” The State relies on 42 U.S.C. section 1496p(d)(3)(B) discussing irrevocable trusts. The beneficiary’s counsel intends to file a federal lawsuit to clarify the issue so stay tuned.

Qualified Settlement Funds for California Minors

             California Probate Courts have jurisdiction to approve qualified settlement funds.  That is so because Probate Courts are not Courts of limited jurisdiction.  Rather, Probate Courts are part of the Superior Courts, which have unlimited jurisdiction.     

The more interesting question is whether the placement of settlement proceeds into a qualified settlement fund on behalf of a minor or incompetent is authorized by statute.  Probate Code section 3600 et seq.  do not include qualified settlement funds as an option in such cases.  We believe a legislative change is necessary to clarify that such authorization exists.  We have noted the same problem in New York.