A.V. suffered from Alzheimer’s disease and was admitted to a nursing home in January 2021. Thereafter, she submitted a Medicaid application for benefits. On her application, she reported several transfers for less than fair market value during the look-back period. She transferred various amounts to her kids and grandkids for things like wedding gifts, help with a down payment on a home, and car purchases. A.V. had specific dates and amounts for each recipient and presented verification to the Medicaid office. All transfers totaled roughly $25,000.
In accordance with 42 U.S. Code § 1396p(c)(2)(C), a Medicaid applicant will not be ineligible for benefits due to transfers during the look-back period if the applicant demonstrates to the state that the transfers were made for a purpose other than to qualify for benefits.
The Administrative Law Judge found that A.V. established that she had made these gifts to her loved ones for other purposes besides trying to qualify for Medicaid benefits. However, on appeal, the Office of Legal and Regulatory Liaison of New Jersey issued an opinion that indicated they disagreed. In so doing, the liaison looked to N.J.A.C. 10:71-4.10(j), which states:
“(j)Any applicant or beneficiary may rebut the presumption that assets were transferred to establish Medicaid eligibility by presenting convincing evidence that the assets were transferred exclusively (that is, solely) for some other purpose. The applicant shall be assisted in obtaining information when necessary. However, the burden of proof shall rest with the applicant. When the applicant expresses the desire to rebut the presumption that he or she transferred assets to establish Medicaid eligibility, the procedures below shall be followed.
1. The applicant's statement concerning the circumstances of the transfer shall be included in the case record. The statement shall include, but need not be limited to, the following:
i. The applicant's stated purpose for transferring the asset;
ii. The applicant's attempt to dispose of the asset at fair market value;
iii. The applicant's reasons for accepting less than the fair market value for the asset;
iv. The applicant's means of and plans for, supporting himself or herself after the transfer; and
v. The applicant's relationship, if any, to the person(s) to whom the asset was transferred.”
Although A.V. had specific reasons for gifting funds to loved ones, the state found that Medicaid eligibility was also a motivating factor. This is because A.V. was diagnosed with Alzheimer’s six years before the Medicaid application was submitted and so arguably she knew that she may need Medicaid benefits in the future. Also, her spouse, J.V., testified that A.V. was “gone” for several years prior, did not recognize him for years, and did not believe their house was her home. Finally, the last transfer was made only three months prior to A.V.’s admittance into the nursing home.
While a Medicaid applicant may have transferred funds to a loved one for a specific purpose, this does not automatically rebut the presumption that the transfer was made for purposes other than to qualify for Medicaid. The state can also look at the health of the applicant at the time of the transfers and the proximity of the transfers to the need for benefits. A.V. did not successfully show that her transfers were for another purpose than Medicaid qualification; thus, her penalty period was upheld.
Attorneys across the country rely on Elder Docx™ to confidently draft various elder law, Medicaid planning, special needs planning, and Veterans pension planning documents. Contact us today to learn more about Elder Docx and the benefits of an WealthCounsel membership.
