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Transfer of assets – court case

| Oct 28, 2013 | Medicaid |

Under the Medicaid transfer penalty rules, any transfers made within five years from the date of the Medicaid application will be presumed by the Medicaid Agency to have been made for the purpose of depleting assets to qualify for Medicaid and subject to a transfer penalty.

However, under the Medicaid transfer rules, the Medicaid applicant does have the opportunity to prove that transfers were made exclusively for a legitimate purpose and not to deplete assets to qualify for Medicaid.

The Koldin Law Center, P.C., has won Fair Hearings against the Medicaid Agency by proving that various gifts were made while still healthy and for purposes other than to deplete life savings to qualify for Medicaid.

In a recent New York Appellate Division Court Case, In the Matter of Donvito v. Shah, 2013 Slip Op 05393, approximately $6,500 was transferred to the applicant’s son during the 5 year look back period. The son argued that he used the gifted funds towards expenses on his father and that this transfer was not for the purpose of depleting assets to qualify for Medicaid, but rather was to give the son funds to help take care of his father’s expenses.

The Court held that the son did not meet his burden of proof because he failed to submit documentary evidence such as credit card receipts or canceled checks to show where the transferred funds were spent.

The lesson from this case is that if transfers are made when there is a possibility of long term care being needed within five years, accurate records should be kept showing the purpose of the transfers.