{ "id": 4300030, "name": "BETTE I. ZANDER, Plaintiff-Appellant, v. CAROL L. ADAMS, Secretary, The Department of Human Services, et al., Defendants-Appellees", "name_abbreviation": "Zander v. Adams", "decision_date": "2010-03-15", "docket_number": "No. 1\u201409\u20140979", "first_page": "290", "last_page": "303", "citations": [ { "type": "official", "cite": "399 Ill. App. 3d 290" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "702 N.E.2d 545", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1998, "pin_cites": [ { "parenthetical": "\"Under basic rules of statutory construction, where the same words appear in different parts of the same statute, they should be given the same meaning unless something in the context indicates that the legislature intended otherwise\"" } ], "opinion_index": 0 }, { "cite": "183 Ill. 2d 499", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 209965 ], "year": 1998, "pin_cites": [ { "page": "513", "parenthetical": "\"Under basic rules of statutory construction, where the same words appear in different parts of the same statute, they should be given the same meaning unless something in the context indicates that the legislature intended otherwise\"" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/183/0499-01" ] }, { "cite": "22 Ill. Reg. 16299", "category": "laws:admin_register", "reporter": "Ill. Reg.", "weight": 2, "opinion_index": 0 }, { "cite": "499 N.E.2d 1012", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1986, "pin_cites": [ { "parenthetical": "\"While referred to as personal property, every attribute of real property ownership, except title, is retained by the beneficiary under [an Illinois land] trust agreement\"" } ], "opinion_index": 0 }, { "cite": "148 Ill. App. 3d 949", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3643608 ], "weight": 2, "year": 1986, "pin_cites": [ { "page": "954", "parenthetical": "\"While referred to as personal property, every attribute of real property ownership, except title, is retained by the beneficiary under [an Illinois land] trust agreement\"" }, { "page": "954" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/148/0949-01" ] }, { "cite": "23 Ill. Reg. 11309", "category": "laws:admin_register", "reporter": "Ill. Reg.", "weight": 2, "opinion_index": 0 }, { "cite": "624 N.E.2d 899", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1993, "opinion_index": 0 }, { "cite": "254 Ill. App. 3d 251", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2979792 ], "year": 1993, "pin_cites": [ { "page": "264" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/254/0251-01" ] }, { "cite": "268 F.3d 955", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 1949964 ], "year": 2001, "pin_cites": [ { "page": "959" } ], "opinion_index": 0, "case_paths": [ "/f3d/268/0955-01" ] }, { "cite": "613 N.E.2d 737", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1993, "pin_cites": [ { "parenthetical": "beneficiaries' interest in Illinois land trust \"is personal property\"" } ], "opinion_index": 0 }, { "cite": "155 Ill. 2d 201", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 4810474 ], "year": 1993, "pin_cites": [ { "page": "207", "parenthetical": "beneficiaries' interest in Illinois land trust \"is personal property\"" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/155/0201-01" ] }, { "cite": "23 Ill. Reg. 11312", "category": "laws:admin_register", "reporter": "Ill. Reg.", "opinion_index": 0 }, { "cite": "756 N.E.2d 822", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2001, "pin_cites": [ { "parenthetical": "the primary goal in construing the meaning of a statute, \"to which all other rules are subordinate, is to ascertain and give effect to the intention of the legislature\"" } ], "opinion_index": 0 }, { "cite": "197 Ill. 2d 225", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 259070 ], "year": 2001, "pin_cites": [ { "page": "232", "parenthetical": "the primary goal in construing the meaning of a statute, \"to which all other rules are subordinate, is to ascertain and give effect to the intention of the legislature\"" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/197/0225-01" ] }, { "cite": "22 Ill. Reg. 16300", "category": "laws:admin_register", "reporter": "Ill. Reg.", "weight": 6, "opinion_index": 0 }, { "cite": "23 Ill. Reg. 11310", "category": "laws:admin_register", "reporter": "Ill. Reg.", "weight": 4, "opinion_index": 0 }, { "cite": "885 F.2d 11", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10524764 ], "year": 1989, "pin_cites": [ { "page": "15", "parenthetical": "Medicaid \" 'is basically administered by each state within certain broad requirements and guidelines' \"" } ], "opinion_index": 0, "case_paths": [ "/f2d/885/0011-01" ] }, { "cite": "822 N.E.2d 882", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2004, "opinion_index": 0 }, { "cite": "354 Ill. App. 3d 497", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3215994 ], "weight": 2, "year": 2004, "pin_cites": [ { "page": "500-01" }, { "page": "500", "parenthetical": "we look to the clear and plain meaning of the regulation to determine whether the Department's interpretation is correct" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/354/0497-01" ] }, { "cite": "740 N.E.2d 978", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2001, "pin_cites": [ { "page": "980" } ], "opinion_index": 0 }, { "cite": "433 Mass. 171", "category": "reporters:state", "reporter": "Mass.", "case_ids": [ 343575 ], "year": 2001, "pin_cites": [ { "page": "172" } ], "opinion_index": 0, "case_paths": [ "/mass/433/0171-01" ] }, { "cite": "843 N.E.2d 336", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 2006, "opinion_index": 0 }, { "cite": "218 Ill. 2d 302", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5735869 ], "weight": 9, "year": 2006, "pin_cites": [ { "page": "304" }, { "page": "304-05" }, { "page": "306-07" }, { "page": "305" }, { "page": "306-07" }, { "page": "307" }, { "page": "307" }, { "page": "306" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/218/0302-01" ] }, { "cite": "42 U.S.C. \u00a71396", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 2006, "pin_cites": [ { "page": "et seq." } ], "opinion_index": 0 }, { "cite": "900 N.E.2d 1095", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2008, "pin_cites": [ { "parenthetical": "deference is owed to the construction of a statute by the agency charged with its interpretation" } ], "opinion_index": 0 }, { "cite": "231 Ill. 2d 593", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3617266 ], "year": 2008, "pin_cites": [ { "page": "608-09", "parenthetical": "deference is owed to the construction of a statute by the agency charged with its interpretation" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/231/0593-01" ] }, { "cite": "910 N.E.2d 723", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 2009, "opinion_index": 0 }, { "cite": "392 Ill. App. 3d 88", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 4286966 ], "weight": 5, "year": 2009, "pin_cites": [ { "page": "93" }, { "page": "93", "parenthetical": "whether trust assets were available to Medicaid applicant to determine eligibility presented a pure question of law" }, { "page": "94" }, { "page": "95", "parenthetical": "Medicaid Act established that specially designed trusts \"were 'no longer a permissible means to shelter assets for purposes of Medicaid eligibility' \"" }, { "page": "93-96", "parenthetical": "court upheld Department's determination that \"trust assets were available for [Medicaid applicant] under federal medicaid law, notwithstanding the trust language to the contrary\"" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/392/0088-01" ] }, { "cite": "23 Ill. Reg. 11301", "category": "laws:admin_register", "reporter": "Ill. Reg.", "weight": 3, "opinion_index": 0 }, { "cite": "22 Ill. Reg. 16291", "category": "laws:admin_register", "reporter": "Ill. Reg.", "opinion_index": 0 } ], "analysis": { "cardinality": 1000, "char_count": 34050, "ocr_confidence": 0.78, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.14471152565265388 }, "sha256": "c91de88f7130f2b80224a6b4734dc7f465d70122cd7dc4c2693c2c8891076948", "simhash": "1:0713ac237f3b6178", "word_count": 5445 }, "last_updated": "2023-07-14T20:57:29.923092+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "BETTE I. ZANDER, Plaintiff-Appellant, v. CAROL L. ADAMS, Secretary, The Department of Human Services, et al., Defendants-Appellees." ], "opinions": [ { "text": "JUSTICE GARCIA\ndelivered the opinion of the court:\nPlaintiff Bette I. Zander appeals from an administrative decision of the Illinois Department of Human Services (Department) imposing a penalty period during which the plaintiff is ineligible for Medicaid assistance. The circuit court confirmed the Department\u2019s decision. Mrs. Zander, an elderly resident of a long-term care facility, assigned her beneficial interest in an Illinois land trust to her three daughters more than 36 months prior to applying for benefits. She argues that period was sufficiently long to shield her from a penalty for transferring her assets under Department regulations. The Department ruled that Mrs. Zander was required to wait 60 months before applying for assistance.\nWe find the Department properly imposed a penalty on Mrs. Zander because the transfer of beneficial interest constituted a noncash or property disbursement from a revocable trust under Department regulations. Accordingly, we affirm.\nBACKGROUND\nOn June 10, 2003, at the age of 79, Mrs. Zander began living in a group care facility in Illinois. On December 4, 2003, Mrs. Zander created the Zander Land Trust to which she transferred three parcels of real estate she owned in the County of McDonough, Macomb, Illinois. One of Mrs. Zander\u2019s daughters, Karen Kae Skiles, served as trustee of the Zander Land Trust. The trust entitled Mrs. Zander to 100% of \u201cthe earnings, avails and proceeds of said real estate.\u201d However, under the terms of the trust, the beneficiary had no \u201cright, title or interest in or to any portion of real estate as such, either equitable or legal.\u201d Less than two weeks later, on December 16, 2003, Mrs. Zander executed an assignment of beneficial interest in the Zander Land Trust transferring all of her beneficial interest to her three daughters.\nOn January 23, 2007, approximately 37 months after the beneficial interest in the Zander Land Trust was transferred to Mrs. Zander\u2019s three daughters, the Department received Mrs. Zander\u2019s application for Medicaid assistance. The Department found Mrs. Zander eligible for Medicaid, but imposed a penalty period of ineligibility from October 1, 2006, to June 30, 2014 (later adjusted to February 28, 2011), based on the transfer of beneficial interest in the trust, which the Department found was a nonallowable transfer of assets subject to review within 60 months of the application.\nAdministrative Hearing\nOn October 19, 2007, a formal hearing was held on the Department\u2019s denial of Medicaid assistance to cover the cost of Mrs. Zander\u2019s nursing home care. According to Mrs. Zander\u2019s main brief, \u201cAt the time she applied for medical assistance in January, 2007, Mrs. Zander believed that her gift to her daughters by assignment of beneficial interest would not affect her eligibility as it had occurred more than 36 months prior to her application.\u201d Before a hearing officer, Ms. Skiles, the trustee of the Zander Land Trust, testified she had neither collected any income nor distributed any real estate from the trust.\nIn its decision, the Department set forth provisions of the Illinois Administrative Code (Code) (89 Ill. Adm. Code \u00a7120.347, amended at 22 Ill. Reg. 16291, 16299-301, eff. August 28, 1998; 89 Ill. Adm. Code \u00a7120.387, amended at 23 Ill. Reg. 11301, 11309-12, eff. August 27, 1999), Title XIX of the Social Security Act (42 U.S.C. \u00a71396p (2006)), and section 3259 of the State Medicaid Manual (State Medicaid Manual, Health Care Financing Administration Publication No. 45 \u2014 3, Transmittal 64, \u00a73259 (November 1994) (Transmittal 64)). It found the trust was a revocable trust; Mrs. Zander\u2019s assignment constituted a transfer of assets from the trust inuring to the assignees\u2019 benefit, which constituted a \u201cpayment\u201d under the State Medicaid Manual triggering the 60-month look-back period. Because Mrs. Zander applied for Medicaid assistance after only 37 months, a penalty period of ineligibility was triggered based on the nonallowable transfer of revocable trust assets.\nMrs. Zander sought timely review of the Department\u2019s decision in the circuit court of Cook County. Treating the issue as one of statutory construction subject to de novo review, the circuit court agreed with the Department that Mrs. Zander\u2019s transfer of her beneficial interest in the Zander Land Trust was a payment from a revocable trust under the state and federal Medicaid statutes, triggering the penalty period of ineligibility, and confirmed the Department\u2019s decision. This timely appeal followed.\nANALYSIS\nAn administrative agency\u2019s decision is subject to judicial review under Illinois Administrative Review Law (735 ILCS 5/3 \u2014 101 et seq. (West 2006)). \u201cWhen reviewing a decision of an administrative agency, the appellate court reviews the decision of the agency, not the decision of the circuit court.\u201d Vincent v. Department of Human Services, 392 Ill. App. 3d 88, 93, 910 N.E.2d 723 (2009).\nStandard of Review\nThe Department asserts the issue is whether, \u201cfor purposes of Medicaid eligibility, an assignment of a beneficial interest in an Illinois land trust is a non-allowable transfer of assets subject to a 60-month look-back.\u201d As framed by Mrs. Zander, the issue is whether her assignment \u201cis a transfer of her personal property or a payment from a revocable trust under 89 Ill. Admin. Code \u00a7 120.387(e) affecting her eligibility for Medicaid coverage of her long term care.\u201d In either regard, the parties submit the issue presents a question of law, subject to de novo review. See Vincent, 392 Ill. App. 3d at 93 (whether trust assets were available to Medicaid applicant to determine eligibility presented a pure question of law). The Department, though charged with determining eligibility for Medicaid assistance, does not assert that its interpretation of the term \u201cpayment,\u201d to capture the transfer of beneficial interest in an Illinois land trust under its regulations, is entitled to any deference by this court. Cf. County of Du Page v. Illinois Labor Relations Board, 231 Ill. 2d 593, 608-09, 900 N.E.2d 1095 (2008) (deference is owed to the construction of a statute by the agency charged with its interpretation). Accordingly, we construe the meaning of the term \u201cpayment\u201d in the Department regulations without regard to the Department\u2019s interpretation.\nMedicaid Legislation\nIn 1965, Congress enacted Title XIX of the Social Security Act (42 U.S.C. \u00a71396 et seq. (2006)), commonly known as the Medicaid Act. Gillmore v. Illinois Department of Human Services, 218 Ill. 2d 302, 304, 843 N.E.2d 336 (2006). We quote at length the supreme court\u2019s description of the Medicaid program.\n\u201cThis statute created a cooperative program in which the federal government reimburses state governments for a portion of the costs to provide medical assistance to two low income groups: the categorically needy and the medically needy. The categorically needy are persons who are automatically eligible to receive cash grants under one of the general welfare programs ***. The medically needy are persons who are ineligible to receive cash grants *** because their resources exceed the eligibility threshold ***, but who still lack the ability to pay for medical assistance. See 305 ILCS 5/5 \u2014 2(2) (West 2002); [citation]. People who fall into the second category are called MANG (Medical Assistance \u2014 No Grant) recipients. See 89 Ill. Adm. Code \u00a7120.10(a) (Conway-Greene CD-ROM March 2002). To qualify for Medicaid as a MANG recipient, a person must have low income and low assets, and the person must \u2018spend down\u2019 any resources over the statutory and regulatory limits. See 89 Ill. Adm. Code \u00a7120.10(d) (Conway-Greene CD-ROM March 2002).\u201d Gillmore, 218 Ill. 2d at 304-05.\nTo ensure that a MANG applicant\u2019s true financial resources are considered in determining Medicaid eligibility, Congress added look-back provisions to the Medicaid Act to examine assets held in trusts.\n\u201cIn 1993, Congress sought to combat the rapidly increasing costs of Medicaid by enacting statutory provisions to ensure that persons who could pay for their own care did not receive assistance. Congress mandated that, in determining Medicaid eligibility, a state must \u2018look-back\u2019 into a three- or five-year period, depending on the asset, before a person applied for assistance to determine if the person made any transfers solely to become eligible for Medicaid. See 42 U.S.C. \u00a71396p(c)(l)(B) (2000). If the person disposed of assets for less than fair market value during the look-back period, the person is ineligible for medical assistance for a statutory penalty period based on the value of the assets transferred. See 42 U.S.C. \u00a71396p(c)(l)(A) (2000). Congress also mandated that a state plan for medical assistance must comply with, inter alia, the provisions of section 1396p with respect to \u2018transfers of assets[ ] and treatment of certain trusts.\u2019 42 U.S.C. \u00a71396a(a)(18) (2000). That is, any assets disposed of during the look-back period are \u2018countable\u2019 toward the Medicaid limits and subject to the spend-down requirement, if the person\u2019s resources are over those limits.\u201d Gillmore, 218 Ill. 2d at 306-07.\nAs the supreme court explained in Gillmore, an applicant seeking Medicaid under MANG may qualify either by a \u201cspend down\u201d of resources or, under the circumstances present in this case where a transfer of trust assets occurred, by delaying an application for the corresponding look-back period. Gillmore, 218 Ill. 2d at 305. \u201cThus, the Medicaid Act expresses an intent by Congress that \u2018[ijndividuals are expected to deplete their own resources [or engage in transfer of assets sufficiently in advance] before obtaining assistance from the government.\u2019 \u201d Vincent, 392 Ill. App. 3d at 94, quoting Lebow v. Com missioner of the Division of Medical Assistance, 433 Mass. 171, 172, 740 N.E.2d 978, 980 (2001). If an application is submitted within the corresponding look-back period following a transfer of assets from a trust, the transfer may trigger a statutory penalty period of ineligibility.\nWhen Illinois elected to participate in the Medicaid program, the Department implemented a program consistent with the federal guidelines. Gillmore v. Department of Human Services, 354 Ill. App. 3d 497, 500-01, 822 N.E.2d 882 (2004), affd, 218 Ill. 2d 302, 843 N.E.2d 336 (2006). Illinois now essentially administers its own Medicaid program. See West Virginia University Hospitals, Inc. v. Casey, 885 F.2d 11, 15 (3d Cir. 1989) (Medicaid \u201c \u2018is basically administered by each state within certain broad requirements and guidelines\u2019 \u201d), quoting Data on the Medicaid Program: Eligibility, Services, Expenditures Fiscal Years 1967-77 Before the H. Subcomm. on Health and the Environment, H.R. Rep. No. 10, 95th Cong., 1st Sess. 1 (1999).\nTransfer of Assets\nMrs. Zander sought Medicaid assistance under MANG. She does not contend her transfer of beneficial interest in the Zander Land Trust to her daughter was not a transfer of assets under the Department regulations. To the contrary, she contends the 36-month period applies to the transfer given the nature of the interest transferred. She asserts the assignment of beneficial interest in the Zander Land Trust was a \u201ctransfer of her personal property, *** not a payment from a revocable trust, *** [and, therefore,] subject to the general 36 month look-back period imposed on transfers of personal property.\u201d (Emphasis added.) The Department found the transfer was subject to a look-back period of 60 months.\nThe parties agree that the State Medicaid Manual (Transmittal 64) is an essential authority on transfer of assets as our supreme court recognized in Gillmore. Gillmore, 218 Ill. 2d at 306-07, quoting 42 U.S.C. \u00a71396a(a)(18) (2000) (Transmittal 64 is a policy document promulgated to comply with \u201cthe provisions of section 1396p with respect to \u2018transfer of assets[ ] and treatment of certain trusts\u2019 \u201d). Mrs. Zander does not contend that the Zander Land Trust is exempt from the provisions of Transmittal 64 addressing revocable trusts.\nTransmittal 64 provides:\n\u201cPayment \u2014 For purposes of this section a payment from a trust is any disbursal from the corpus of the trust or from income generated by the trust which benefits the party receiving it. A payment may include actual cash, as well as noncash or property disbursements, such as the right to use and occupy real property.\u201d State Medicaid Manual, Health Care Financing Administration Publication No. 45 \u2014 3, Transmittal 64, \u00a73259.1(A)(8) (November 1994).\nThe Department promulgated section 120.387 of Title 89 of the Code to comply with the requirement for look-back provisions of the 1993 amendment to the Medicaid Act. Section 120.387(d) provides:\n\u201cA transfer of assets occurs when an institutionalized person *** gives away real or personal property. Changing ownership of property to a life estate interest is an asset transfer ***. For assets held in joint tenancy, tenancy in common or similar arrangement, a transfer occurs when an action by any person reduces or eliminates the person\u2019s ownership or control of the asset. A transfer occurs when an action or actions are taken which would cause an asset or assets not be received ***.\u201d 89 Ill. Adm. Code \u00a7120.387(d), amended at 23 Ill. Reg. 11301, 11310, eff. August 27, 1999.\nSection 120.387(e) determines the circumstances when the 60-month look-back period applies:\n\u201c(A) the 60 month period applies to payments from a revocable trust that are not treated as income (as described in Section 120.347) ***.\u201d 89 Ill. Adm. Code \u00a7120.387(e)(l)(A), amended at 23 Ill. Reg. 11310, eff. August 27, 1999.\nAs a matter of convenience to assist in our review of the imposition of the statutory penalty, we read section 120.387(e) to require three elements before the 60-month period is triggered: (1) a transfer from a revocable trust; (2) the transfer from the trust is not an income payment under section 120.347(f)(2); and (3) the transfer is a payment, other than an income payment.\nMrs. Zander concedes that the Zander Land Trust is a revocable trust, satisfying the first element.\nThere is also no dispute that the second element is satisfied \u2014 the Department could not treat the transfer of beneficial interest from Mrs. Zander to her daughters as an income payment under section 120.347(f)(2). A transfer is treated as an income payment only if it is \u201cmade to or for the benefit of\u2019 the Medicaid applicant, Mrs. Zander. 89 Ill. Adm. Code \u00a7120.347(f)(2), amended at 22 Ill. Reg. 16300, eff. August 28, 1998.\nThe disagreement between the parties centers on whether Mrs. Zander\u2019s transfer of her beneficial interest in the Zander Land Trust to her daughters constituted a payment (other than an income payment), the third element of section 120.387(e)(1)(A). Under Transmittal 64, only if the transfer qualifies as a \u201cpayment\u201d from the revocable trust would the 60-month look-back period apply; by contrast, the 36-month period would apply if the transfer were merely a gift of personal property, as Mrs. Zander contends. At the formal hearing, the Department acknowledged that had the transfer been of a \u201csavings account, stock certificates or savings bonds,\u201d the look-back would be 36 months.\nMrs. Zander puts forth several interrelated arguments against the Department\u2019s decision that the assignment was a nonallowable transfer of trust assets within 60 months of her Medicaid application to trigger the statutory penalty period. Common to each of her arguments is the contention that Mrs. Zander\u2019s assignment of beneficial interest is irreconcilable with the term \u201cpayment\u201d in the Department regulations.\nPenal Regulation\nIn challenging the Department\u2019s decision, Mrs. Zander makes note that the Department imposed a penalty of ineligibility for Medicaid assistance because the Department found a nonallowable transfer of assets from the Zander Land Trust under section 120.387. Based on the \u201cpenal\u201d nature of section 120.387 as to Medicaid eligibility, Mrs. Zander argues that the section \u201cmust be strictly construed and the definition of \u2018payment\u2019 may not be extended to include an assignment of beneficial interest.\u201d She cites various cases strictly construing penal statutes as authority. In her reply brief, Mrs. Zander notes, \u201cThe Department did not refute Mrs. Zander\u2019s assertion that the applicable regulation is punitive and therefore subject to strict construction.\u201d\nAt oral argument, the Department asserted that the characterization of section 120.387 as punitive did not warrant a written response because characterizing the regulation as \u201cpunitive\u201d does not aid in interpreting the controlling regulations of the Department. According to the Department, the underlying question before us is whether the assignment of beneficial interest in the Zander Land Trust qualifies as a \u201cpayment\u201d under the plain and clear language in Transmittal 64 and the Department regulations. From the Department\u2019s perspective, there is little in the definition of \u201cpayment\u201d that lends itself to be strictly construed.\nBecause we agree that characterizing the regulation as \u201cpunitive\u201d does not aid in the interpretation of the Department regulations, we do not address whether the term \u201cpayment\u201d is subject to strict construction. See Sylvester v. Industrial Comm\u2019n, 197 Ill. 2d 225, 232, 756 N.E.2d 822 (2001) (the primary goal in construing the meaning of a statute, \u201cto which all other rules are subordinate, is to ascertain and give effect to the intention of the legislature\u201d). While section 120.387 explicitly labels the period of ineligibility a \u201cpenalty\u201d for nonallowable transfers of assets of revocable trusts during the controlling look-back period (89 Ill. Adm. Code \u00a7120.387(1), amended at 23 Ill. Reg. 11312, eff. August 27, 1999), we must affirm the Department\u2019s decision if the assignment of beneficial interest constitutes a \u201cpayment\u201d under the plain and clear language of Transmittal 64 and the Department regulations, a question we examine de novo. See Gillmore, 354 Ill. App. 3d at 500 (we look to the clear and plain meaning of the regulation to determine whether the Department\u2019s interpretation is correct).\nBeneficial Interest as Personal Property\nFundamental to Mrs. Zander\u2019s arguments is her contention that it is \u201cwell settled Illinois law that the beneficiary of an Illinois land trust holds a personal property interest in the land trust.\u201d See 765 ILCS 405/1 (West 2006); Klein v. La Salle National Bank, 155 Ill. 2d 201, 207, 613 N.E.2d 737 (1993) (beneficiaries\u2019 interest in Illinois land trust \u201cis personal property\u201d). Mrs. Zander contends that because the interest she assigned to her daughters is considered \u201cpersonal property\u201d under Illinois law, this characterization controls the nature of the asset transferred from the Zander Land Trust notwithstanding that the Zander Land Trust was established with the conveyance of real property. Premised on the transfer of beneficial interest as a transfer of personal property, Mrs. Zander argues that the transfer here cannot constitute a \u201cpayment from the trust.\u201d (Emphasis added.) She contends the \u201cpersonal property interest was never a part of the corpus of the Land Trust and, therefore, could not be paid from the Zander Land Trust.\u201d\nWe do not agree that the legal characterization of beneficial interest as \u201cpersonal property\u201d under Illinois land trust law controls the Department\u2019s review of Mrs. Zander\u2019s transfer of beneficial interest from the Zander Land Trust to her daughters. As our supreme court noted, Congress made clear in its 1993 amendment to the Medicaid Act with the addition of section 1396p that persons able to pay for their own care could not avoid doing so by the \u201c \u2018transfer of assests[ ] and treatment of certain trusts.\u2019 \u201d Gillmore, 218 Ill. 2d at 307, quoting 42 U.S.C. \u00a71396a(a)(18) (2000). We are unpersuaded that the legal characterization of beneficial interest in an Illinois land trust as personal property should necessarily exclude from the term \u201cpayment\u201d a transfer of assets from a revocable trust under the Department regulations mandated by section 1396p of the Medicaid Act. Cf. Vincent, 392 Ill. App. 3d at 95 (Medicaid Act established that specially designed trusts \u201cwere \u2018no longer a permissible means to shelter assets for purposes of Medicaid eligibility\u2019 \u201d), quoting Ramey v. Reinertson, 268 F.3d 955, 959 (10th Cir. 2001).\n\u25a0 Further supporting our conclusion is Mrs. Zander\u2019s observation in her main brief that \u201c[t]he Illinois land trust is \u2018*** a legal fiction whereby an individual converts his ownership interest in real property to ownership in personal property.\u2019 [Quoting] Smith v. First National Bank of Danville, 254 Ill. App. 3d 251, 264, 624 N.E.2d 899 (1993).\u201d Mrs. Zander offers no compelling reason that this \u201clegal fiction\u201d should be carried over to Medicaid eligibility when Congress, in an effort to address the \u201cincreasing costs of Medicaid,\u201d mandated that state plans consider the true resources of Medicaid applicants by looking back into transfers of trust assets. Gillmore, 218 Ill. 2d at 307.\nIn any event, under section 120.387(d), a transfer of assets, subject to a look-back period, \u201coccurs when an institutionalized person *** gives away real or personal property.\u201d 89 Ill. Adm. Code \u00a7120.387(d), amended at 23 Ill. Reg. 11310, eff. August 27, 1999. As the title to section 120.387 makes clear, consistent with the mandate from Congress, the focus is on \u201cProperty Transfers Occurring On or After August 11, 1993.\u201d (Emphasis added.) 89 Ill. Adm. Code \u00a7120.387, amended at 23 Ill. Reg. 11309, eff. August 27, 1999. We find unpersuasive Mrs. Zander\u2019s position that a transfer of beneficial interest from the Zander Land Trust is, by its very nature, irreconcilable with the term \u201cpayment\u201d to trigger the 60-month look-back period for transfers from a revocable trust. We reject Mrs. Zander\u2019s position that the term \u201cpayment\u201d cannot apply to the transfer of beneficial interest in an Illinois land trust simply because, under Illinois law, the focus is on the beneficial interest rather than the real property, which forms the principal of the land trust.\nCorpus of Trust\nMrs. Zander next contends that because the assignment of beneficial interest in the Zander Land Trust only changed the persons that are entitled to benefit from \u201cthe earnings, avails and proceeds of said real estate,\u201d the corpus of the land trust remained unaffected. The argument is that because the corpus of the land trust remained intact, her \u201cassignment of the beneficial interest was simply a transfer of personal property by Bette Zander to her daughters and not a payment from the trust.\u201d (Emphasis added.) Once again, we reject Mrs. Zander\u2019s position that a payment from a trust cannot capture the transfer of beneficial interest of a land trust simply because the personal property interest she conveyed in the assignment was not a part of the corpus of the land trust. We reject Mrs. Zander\u2019s solitary focus on the \u201cpersonal property\u201d nature of the interest transferred from the Zander Land Trust to drive our analysis.\nWe emphatically reject Mrs. Zander\u2019s claim that \u201cMrs. Zander\u2019s beneficial interest was not an asset of the Zander Land Trust\u201d by virtue of Illinois land trust law that treats the beneficial interest in the land trust as personal property. We reject Mrs. Zander\u2019s implicit claim that the principal of the land trust and the beneficial interest in the trust are wholly unrelated. That this claim borders on fiction is readily discernable given that the holder of beneficial interest in an Illinois land trust also has the power to dissolve the trust and sell the real estate, as Mrs. Zander conceded at oral argument. See IMM Acceptance Corp. v. First National Bank & Trust Co., 148 Ill. App. 3d 949, 954, 499 N.E.2d 1012 (1986) (\u201cWhile referred to as personal property, every attribute of real property ownership, except title, is retained by the beneficiary under [an Illinois land] trust agreement\u201d).\nIn accordance with the congressional mandate that the Illinois Medicaid program take into account the full resources of Medicaid applicants, the Department regulations focus on transfers of assets from a trust. We note that had no transfer of beneficial interest occurred prior to Mrs. Zander\u2019s application for Medicaid assistance, the Department was required to treat the real property in the Zander Land Trust \u201cas an available asset\u201d under section 120.347(f)(1) regardless of the restrictions in the land trust documents. See Vincent, 392 Ill. App. 3d at 93-96 (court upheld Department\u2019s determination that \u201ctrust assets were available for [Medicaid applicant] under federal medicaid law, notwithstanding the trust language to the contrary\u201d). There is no suggestion by Mrs. Zander that this is not so.\nIf the parcels of real property conveyed to the Zander Land Trust constituted an available asset of Mrs. Zander prior to the assignment of beneficial interest, we find no basis for the available asset in the trust to effectively disappear by the conveyance of beneficial interest of the Zander Land Trust to her daughters. We are unpersuaded that the assignment could not fall within \u201cother payments from the trust as transfers of assets by [the Medicaid applicant] (subject to the provisions of Section 120.387)\u201d (89 Ill. Adm. Code \u00a7120.347(f)(3), amended at 22 Ill. Reg. 16300, eff. August 28 1999), simply because the use of the term \u201cpayment\u201d is contrary to Mrs. Zander\u2019s notion of conveyance of personal property.\nFinal Administrative Decision\nIn her main brief, Mrs. Zander complains that the \u201cFinal Administrative Decision contained no analysis as to why Mrs. Zander\u2019s assignment of beneficial interest in the Zander Land Trust was treated as a \u2018payment\u2019 from a revocable trust.\u201d We offer the following analysis for the Department\u2019s decision specific to Mrs. Zander\u2019s circumstances.\nOn December 4, 2003, after Mrs. Zander became a resident of a care facility, Mrs. Zander established the Zander Land Trust, to which assets of Mrs. Zander were conveyed in the form of several parcels of real estate. Mrs. Zander concedes the Zander Land Trust was a revocable trust. The Zander Land Trust fell subject to section 120.347 (Treatment of Trusts) because \u201cassets of [Mrs. Zander] were used to form *** the principal of the trust.\u201d 89 Ill. Adm. Code \u00a7120.347(c), amended at 22 Ill. Reg. 16299, eff. August 28, 1998.\nOn\u00abDecember 16, 2003, Mrs. Zander assigned her beneficial interest in the Zander Land Trust to her three daughters. When Mrs. Zander applied for Medicaid assistance, the Department had \u201cto determine if [Mrs. Zander] made any transfers solely to become eligible for Medicaid.\u201d Gillmore, 218 Ill. 2d at 306. In accordance with the congressional mandate on examining assets held in trust, the Department had to treat the principal of the Zander Land Trust as an available asset of Mrs. Zander. The Department then had to determine whether the assignment of beneficial interest fell within the provision requiring that \u201cany other payments from the trust [be treated] as transfers of assets by [Mrs. Zander] (subject to provisions of Section 120.387).\u201d 89 Ill. Adm. Code \u00a7 120.347(f)(3), amended at 22 Ill. Reg. 16300, eff. August 28, 1998.\nIf the assignment constituted a \u201cpayment\u201d from a revocable trust as contemplated by section 120.387(e)(1)(A), then the 60-month look-back period applied to Mrs. Zander\u2019s transfer of assets to her daughters by way of assignment of beneficial interest in the Zander Land Trust. 89 Ill. Adm. Code \u00a7120.347(0(3), amended at 22 Ill. Reg. 16300, eff. August 28, 1998; 89 Ill. Adm. Code \u00a7120.387(e)(l)(A), amended at 23 Ill. Reg. 11310, eff. August 27, 1999.\nSection 120.347(0(2) requires that the Department \u201ctreat as income payments from the trust that are made to or for the benefit of [Mrs. Zander]\u201d; however, no such income payments were ever made. 89 Ill. Adm. Code \u00a7120.347(0(2), amended at 22 Ill. Reg. 16300, eff. August 27, 1998. Section 120.347(0(3) requires that the Department \u201ctreat any other payments from the trust as transfers of assets by [Mrs. Zander].\u201d (Emphasis added.) 89 Ill. Adm. Code \u00a7120.347(0(3), amended at 22 Ill. Reg. 16300, eff. August 28, 1998.\nThere is no distinction in the use of \u201cpayments\u201d in sections 120.347(f)(2) and (f)(3). \u201cPayment\u201d is also used in section 120.387(e)(1)(A) (\u201cthe 60 month period applies to payments from a revocable trust\u201d) (emphasis added) (89 Ill. Adm. Code \u00a7120.387(e)(l)(A), amended at 23 Ill. Reg. 11310, eff. August 27, 1999). We perceive no difference in the meaning of \u201cpayment\u201d used in the Treatment of Trusts section (section 120.347) and the meaning of \u201cpayment\u201d used in the section titled Property Transfers Occurring On or After August 11, 1993 (section 120.387). The term \u201cpayments\u201d in section 120.387(e)(1)(A) conveys precisely the same action conveyed in sections 120.347(f)(2) and (f)(3), that is, a transfer of assets from a trust, either as \u201cincome payments\u201d or, more broadly, as \u201cany other payments.\u201d See McMahan v. Industrial Comm\u2019n, 183 Ill. 2d 499, 513, 702 N.E.2d 545 (1998) (\u201cUnder basic rules of statutory construction, where the same words appear in different parts of the same statute, they should be given the same meaning unless something in the context indicates that the legislature intended otherwise\u201d).\nThat the term \u201cpayment\u201d is repeatedly used in the Department regulations is simply a matter of convenience expressing a transfer of trust assets either to or by a Medicaid applicant. It is the transfer of assets, which constitutes a \u201cpayment,\u201d that bears scrutiny under the Department regulations: \u201cA transfer of assets occurs when an institutionalized person *** buys, sells or gives away real or personal property ***.\u201d 89 Ill. Adm. Code, \u00a7120.387(d), amended at 23 Ill. Reg. 11301, eff. August 27, 1999. Mrs. Zander gave away her beneficial interest in the Zander Land Trust to her daughters. We find no basis to exclude this transfer of assets from scrutiny under the Department regulations regarding property transfers from trusts for Medicaid eligibility simply because the conveyance is considered under Illinois law to be that of personal property, a conveyance which Mrs. Zander contends is at odds with the common understanding of the term \u201cpayment.\u201d \u201cPayment\u201d as used in the Department regulations simply captures the transfer of assets from a revocable trust, which occurred when Mrs. Zander assigned the beneficial interest in the Zander Land Trust to her daughters.\nAgainst this reading of \u201cpayment\u201d in the Department regulations to capture the transfer of assets from a revocable trust, Mrs. Zander contends that \u201cpayment\u201d under the definition in Transmittal 64 is restricted to a \u201cdisbursal from the corpus of the trust or from income generated by the trust.\u201d Transmittal 64, \u00a73259.1(a)(8). We are not persuaded that the quoted language controls the meaning of \u201cpayment.\u201d\nTransmittal 64 further provides that \u201cpayment\u201d \u201cmay include *** noncash or property disbursements, such as the right to use and occupy real property.\u201d Transmittal 64, \u00a73259.1(a)(8). That broader definition of \u201cpayment\u201d in Transmittal 64 fits precisely the situation present in this case. Mrs. Zander\u2019s assignment of beneficial interest in the Zander Land trust was either a noncash disbursement (if Mrs. Zander persists in her claim that assignment was of \u201cpersonal property\u201d) or a property disbursement, giving her daughters the right to use and occupy the real property constituting the principal of the trust. The right to use and occupy is much like the right granted by the Zander Land Trust Agreement to the beneficiaries, which includes the \u201cpower of direction to deal with the title to said property and to manage and control said property *** and *** to receive the proceeds from rentals and from mortgages, sales or other disposition of said premises.\u201d With the assignment of beneficial interest, Mrs. Zander\u2019s three daughters were given the right to use and occupy the principal of the trust, no less so than Mrs. Zander had the right to use and occupy the parcels of real estate prior to establishing the Zander Land Trust. See IMM Acceptance Corp., 148 Ill. App. 3d at 954.\nBy their clear and plain language, Transmittal 64 and section 120.347 and section 120.387 provide a consistent meaning of \u201cpayment,\u201d which captures an assignment of beneficial interest because it involves a transfer of assets from the revocable Zander Land Trust. Transmittal 64, \u00a73259.1(a)(8); 89 Ill. Adm. Code \u00a7120.347, amended at 22 Ill. Reg. 16299, eff. August 28, 1998; 89 Ill. Adm. Code \u00a7120.387, amended at 23 Ill. Reg. 11309, eff. August 27, 1999.\nAs matter of law, Mrs. Zander\u2019s assignment of her beneficial interest in the Zander Land Trust was subject to the 60-month look-back period to determine Medicaid eligibility. Because Mrs. Zander applied for Medicaid after only 37 months following her transfer of the assets of the Zander Land Trust to her daughters, she was subject to a statutory period of ineligibility.\nCONCLUSION\nMrs. Zander\u2019s transfer of her beneficial interest in the Zander Land Trust constituted a \u201cpayment\u201d from a revocable trust because it was a noncash disbursement or a disbursement of property rights regarding the parcels of real property constituting the principal of the Zander Land Trust. The 60-month look-back period therefore applied to Mrs. Zander\u2019s Medicaid application. Because she transferred her beneficial interest in the Zander Land Trust within 60 months of the application, the Department properly imposed the statutory penalty period for Medicaid assistance.\nAffirmed.\nPATTI and LAMPKIN, JJ., concur.", "type": "majority", "author": "JUSTICE GARCIA" } ], "attorneys": [ "Janna Dutton, of Janna Dutton & Associates, PC, of Chicago, for appellant.", "Lisa Madigan, Attorney General, of Chicago (Michael A. Scodro, Solicitor General, and Carl J. Blitz, Assistant Attorney General, of counsel), for appellees." ], "corrections": "", "head_matter": "BETTE I. ZANDER, Plaintiff-Appellant, v. CAROL L. ADAMS, Secretary, The Department of Human Services, et al., Defendants-Appellees.\nFirst District (1st Division)\nNo. 1\u201409\u20140979\nOpinion filed March 15, 2010.\nJanna Dutton, of Janna Dutton & Associates, PC, of Chicago, for appellant.\nLisa Madigan, Attorney General, of Chicago (Michael A. Scodro, Solicitor General, and Carl J. Blitz, Assistant Attorney General, of counsel), for appellees." }, "file_name": "0290-01", "first_page_order": 306, "last_page_order": 319 }