THE REVERE ADVOCATE – FRIDAY, SEPTEMBER 11, 2026 Page 7 TRUSTEE COMPENSATION PROVISION A teacher welcomes a student to her fi rst day of classes this past week. FIRST DAY | FROM Page 1 their teachers, and settled into their classrooms for another year of learning and growth. The fi rst day was full of smiles, hugs, and excitement as elementary students arrived with backpacks in tow and middle and high school students reunited with classmates. RPS educators, administrators, and staff were out across the district greeting students and families for a smooth and successful start to the school year. Mayor Patrick Keefe, Jr. handed out pencils much to the delight of this young student. The start of school marks the beginning of another exciting year for the RPS community, as there are many opportunities for students to learn, explore, build relationships, and create lasting memories. See some of our favorite photos of the excitement of day one of the 2026-2027 school year! M IN IRREVOCABLE TRUST assHealth has in the past made the argument that if the Settlor of an irrevocable Trust, who is also serving as Trustee, has the right, pursuant to the terms of the Trust, to receive compensation, that this somehow results in the Settlor having the right to receive principal distributions thereby rendering all of the assets housed in the irrevocable Trust a “countable” resource for MassHealth eligibility purposes. I suppose even if one of the children of the Settlor were to serve as Trustee, MassHealth could try to argue that the child’s compensation could include principal and the Settlor could ask the child to hand over principal to the Settlor. If the child does not, the Settlor could remove and replace the child Trustee with someone else that would be more cooperative. So, the power to reParents are just as excited to bring their children to the start of another school year. place and remove the Trustee virtually for any reason arguably provides the Settlor with as much power over the Trust as if he or she were serving as Trustee. Pursuant to well-settled Trust law, the Trustee of a Trust is only entitled to fair and reasonable compensation for actual services rendered. The Trustee would be required to submit an invoice. No court of law would allow a Trustee to drain the principal of the Trust in order to pay himself or herself unreasonable Trustee compensation. Since the Settlor/Trustee would now be in a nursing home, how could he or she, as Trustee, render services to the Trust in order to be entitled to compensation in the fi rst place? Trustee compensation would result in taxable earned income and would fall under 130 CMR 520.009(c), a Massachusetts regulation that essentially states that such compensation for services rendered to the Trust is not equivalent to the Settlor/Trustee being “benefi tted” from the Trust as a benefi ciary is so benefi tted. The Trustee earned the income as a result of services rendered, which is a far cry from receiving income or principal merely because of the fact that he or she might also be a benefi ciary of the Trust. As an example, if the Settlor/Trustee happened to be a carpenter and performed carpentry services related to real estate held in the Trust, and invoiced the Trust for such services, wouldn’t that represent payment for services rendered and not a distribution of principal from the Trust? It would represent earned income and would be taxable to the Settlor/ Trustee. The federal Medicaid law is clear in stating that state Trust law is to govern provisions found within Trust documents. The federal government relies on the body of law with respect to Trusts as it has evolved over the past 200 years within each state in the union. There is no Federal law which does not recognize state laws governing Trusts when determining ownership rights, property rights and other legal interests. One way to avoid ever having to defend such a possible attack on the part of MassHealth is to simply limit the Trustee compensation to the income generated by the Trust. In other words, Trustee compensation can only be paid out of income. That being said, by deduction, Trustee compensation cannot be paid from the principal. Therefore, with respect to the Trustee compensation issue, MassHealth cannot argue that the principal of the irrevocable Trust is somehow a countable asset. Pursuant to the Massachusetts Supreme Judicial Court case Fournier, decided in July of 2021, the Trust document must be read as a whole and there can be no circumstances in which the Settlor of the Trust could receive principal distributions. This case forced MassHealth to signifi cantly reduce its attacks on irrevocable Trusts when no sound legal basis under well-settled Trust law for the attacks exists. Joseph D. Cataldo is an Estate Planning/Elder Law Attorney, Certifi ed Public Accountant, Certifi ed Financial Planner, AICPA Personal Financial Specialist and holds a Master’s Degree in Taxation. Faculty members and teachers greet the students on their fi rst day.
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