Below, in chronological order, is our annual roundup of the top 10 elder law decisions for the year just ended. Number three in the list, M.W., was a decision not of a court but of the Director of the New Jersey's Division of Medical Assistance and Health Services.
1. Iowa High Court Rules State May Recover Medicaid Payments From Irrevocable Trust
Holding that the provision of medical assistance creates a debt immediately upon the provision of services to a recipient, the Supreme Court of Iowa rules that the state may recover Medicaid payments from the corpus of a husband and wife’s irrevocable income-only trusts. Estate of Melby (Iowa, No. 12–1593, Jan. 10, 2014).
2. Long Annuities Not Subject to Medicaid Transfer Penalty While Short Annuities Are
A federal district court rules that five-year annuities purchased by Medicaid applicants are not transfers for less than fair market value, but transfers to 18-, 14-, and 12- month annuities are subject to a penalty period. The court also declines to enforce a state law making it a crime to counsel clients in the disposal of assets. Zahner v. Mackereth (U.S. Dist. Ct., W.D. Penn., No. 11-306 Erie, Jan. 16, 2014).
3. New Jersey Medicaid Agency Reluctantly Rules That Gift-Annuity Plan Will Work
New Jersey's Medicaid agency holds that a Medicaid applicant who made a substantial gift and purchased an annuity to help pay for the resulting ineligibility period will be eligible for benefits. M.W. v. Division of Medical Assistance and Health Services (N.J. OAL Docket No. 2998-2013, Jan. 28, 2014).
4. Spouse's Retirement Account Is Available Resource for Purposes of Medicaid Eligibility
According to Arkansas' highest court, the state may count a spouse's retirement account as an available resource when determining a Medicaid applicant's eligibility. Arkansas Dept. of Human Services v. Pierce (Ark., No. CV-13-870, May 29, 2014).
5. Veterans Benefits Not Countable As Income in Medicaid Eligibility Determination
Veterans pension benefits may not be counted as income for the purposes of Medicaid eligibility if the benefit is the result of unusual medical expenses, a U.S. district court has ruled. Galletta v. Velez (D. N.J., No. 13-532 (RBK/AMD), June 3, 2014).
6. Transfer of House in Exchange for Promissory Note Is Not Subject to Penalty
A U.S. district court holds that a Medicaid recipient who transferred his house to his daughter in exchange for a promissory note does not incur a transfer penalty and that the promissory note is not an available asset. Peterson v. Lake (U.S. Dist. Ct., W.D. Okla., No. CIV-13-1235-W, June 30, 2014).
7. State Can Recover From Entire Value of Property in Which Medicaid Recipient Had Life Estate
The Idaho Supreme Court rules that the state may recover Medicaid benefits from the entire value of a property that a Medicaid recipient transferred to his daughter while retaining a life estate for himself. In re Estate of Peterson (Idaho, No. 40615, Aug. 13, 2014).
8. Penalty Period Does Not Begin Until Medicaid Applicant Spends Down Returned Assets
A federal district court rules that the state can recalculate a Medicaid applicant's penalty period when transferred assets are returned, holding that federal Medicaid law does not directly address the issue. Aplin v. McCrossen (U.S. Dist. Ct., W.D. N.Y., No. 12-CIV-6312-FPG, Aug. 25, 2014).
9. Medicaid Applicant's Irrevocable Trust Is Not Countable Resource
A Massachusetts trial court rules that an irrevocable trust that contains a provision allowing the trustee to distribute the principal to others for the benefit of the beneficiary is not a countable resource for purposes of Medicaid eligibility. O'Leary v. Thorn (Mass. Super. Ct., No. WOCV2013-02013A, Sept. 18, 2014).
10. Medicaid Applicant's Penalty Period Not Reduced by Use of Transferred Assets to Pay Assisted Living
A New York appeals court determines that a Medicaid applicant's penalty period should not be reduced even though the applicant's daughter used some of the transferred money to pay for her mother’s assisted living facility. Weiss v. Suffolk County Dept. of Social Services (N.Y. Sup. Ct., App. Div., 2nd Dept., No. 2013-09464, 5418/13, Oct. 1, 2014).
