A New Jersey appeals court finds that a Medicaid applicant who transferred money to her daughter and then a few months later retained a life estate in daughter's home is not eligible for Medicaid. J.M. v. Division of Medical Assistance and Health Services (N.J. Sup. Ct., App. Div., A-2329-09T3, Aug. 30, 2011).
In March 2008, J.M. wrote a check for $150,000 to her daughter. She wrote the word "gift" in the memo section. Her daughter used that money to make a down payment on a house. In May 2008, J.M. became sick and entered a nursing home. In November 2008, J.M.'s daughter executed a deed and transferred a life estate to J.M. The deed stated the life estate was granted in exchange for the $150,000 already transferred.
J.M. applied for Medicaid benefits. The state denied benefits due to the $150,000 transfer. J.M. appealed, and the administrative law judge determined that the transfer was in exchange for the life estate, but concluded that under the Deficit Reductin Act, J.M. was still ineligible for benefits because she had not lived in the home for at least a year after purchase. The final administrative decision found that J.M. did not receive fair market value for the transfer of funds. J.M. appealed. ?
The New Jersey Superior Court, Appellate Division affirms, holding J.M. is not entitled to Medicaid benefits. The court rules that the word "gift" on the check and the gap between the transfer and the grant of the life estate undermine J.M.'s claim that the transfer and life estate were part of the same agreement. In addition, the court concludes that federal law requires that a Medicaid applicant who retains a life estate must live in the home for at least one year after purchase.
For the full text of this decision in PDF, go to: http://www.judiciary.state.nj.us/opinions/a2329-09.pdf.
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