A New York appeals court ruled that a Medicaid applicant successfully rebutted the presumption that transfers to her daughter made one and two years before entering a nursing home were for purposes other than to qualify for Medicaid, based on evidence that the money was used to help her grandson purchase a house. Matter of Collins v. Zucker (N.Y. App. Ct., 3rd Dept., No. 522007, Nov. 23, 2016).

In 2009 and 2010, Lorraine Knapp made three transfers totaling $26,000 to her daughter to assist in purchasing and repairing a house for the use of her grandson, a Marine Corps veteran with young children and a service-connected disability. She still had $200,000 in assets after the transfers. At the time of the transfers, the applicant  suffered from various chronic health conditions, including osteoporosis, and she used a cane or walker to assist in mobility. However, she was able to live at home, with some assistance from family members and a part-time care provider.

In 2011, Ms. Knapp fell and entered a nursing home. After her assets were depleted in 2012, she applied for Medicaid benefits. The state imposed a penalty period based on the transfers to her daughter.

Ms. Knapp appealed the penalty period, arguing that the transfers were made for a purpose other than to qualify for Medicaid. The state upheld the penalty period, ruling that the nursing home placement was foreseeable at the time of the transfers. Ms. Knapp appealed to court.

The New York Appellate Court annuled the state’s decision, holding that Ms. Knapp rebutted the presumption that the transfer was made for a purpose other than to qualify for Medicaid. According to the court,

[T]he relevant standard is not whether decedent could or should have foreseen that nursing home placement might eventually become necessary, but whether she made the requisite showing that the transfers were made “exclusively for a purpose other than to qualify for medical assistance…. The fact that a future need for nursing home care may be foreseeable for a person of advanced age with chronic medical conditions is not dispositive of the question whether a transfer by such a person was made for the purpose of qualifying for such assistance… .

Considering the medical evidence in light of the substantiated testimony that the transfers were made for the purpose of assisting in the purchase of a home for the grandson’s use, as well as the evidence that the transfers took place several years before decedent applied for assistance and that she retained most of her assets thereafter, we find that the presumption was successfully rebutted. The determination … was not supported by substantial evidence and must be annulled.

For the full text of this decision, go to: Matter of Collins v. Zucker

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