A Case of Unintended Consequences

A New York appeals court rules that because there was no written agreement providing for repayment of past financial assistance between a mother and a daughter when the mother transferred funds to the daughter, the transfer was for less than fair market value for purposes of Medicaid eligibility.

 Here’s another important reminder on how much of a to stickler Medicare and Medicaid can be when it comes denying benefits: the Matter of Komanoff Ctr. for Geriatric & Rehabilitative Medicine v Daines (N.Y. Sup. Ct., App. Div., 2nd Dept., No. 2010-05776, June 28, 2011) (here summarized on ElderLawAnswers.com.) It’s the case of Bernadette Jordan and how she entered a nursing home and filed for Medicaid only to find that the State ruled her ineligible for a period of 14.31 months. Apparently, Mrs. Jordan had transferred funds from a revocable trust to her daughter, to repay expenses that her daughter had shouldered in getting her to the nursing home. States are skeptical of such transfers, and often examine them carefully. In this case, they found that the transfers were made at less than fair market value for purposes of Medicaid eligibility, and so denied Mrs. Jordan her  Medicaid benefits.

On Mrs. Jordan’s behalf, her nursing home called a hearing and later appealed. After all, the expenses the daughter paid were documented and done with the assumption that they would be repaid with assets from the trust. The State still denied benefits. The problem was that there was no written document at the time of the expenditure that specified the agreement to repay the daughter’s expenditures.  

The moral of the story is documentation. By documenting your interactions and intentions you can provide hard proof and avoid getting caught on a technicality. In Mrs. Jordan’s case, 14.31 months is a long time to wait for nursing home benefits.

Reference:  Elderlawanswers (July 5, 2011) “Transfer to Daughter Without Written Agreement Triggers Medicaid Penalty

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