The North Dakota Supreme Court upheld the denial of Medicaid to a mother whose daughter exercised a power of attorney to make gifts to herself and her sisters. The state agency properly considered the gifts the result of undue influence, and deemed the transferred property available to pay for the mother's nursing home care. The mother was ineligible for Medicaid for the time that the property would have paid for her care.
The federal law
Soc. Sec. Act §1917(c) requires states to deny Medicaid to anyone who has transferred property for less than its fair market value within a period of time, called the "look-back" period, prior to applying for benefits. An applicant may be eligible for Medicaid only after a penalty period, determined by the length of time that transferred property would have paid for the applicant's long-term care. For transfers of property made before February 8, 2006, the look-back period is 36 months.
The mother had entered a nursing facility in August 2002. She then executed a document giving one of her daughters a power of attorney. Between September 2002 and September 2005, the daughter used the power to make gifts totaling $159,000 to her sisters and herself. In September 2005, the mother signed a document declaring that she had made the gifts freely and voluntarily, and had not been influenced by anyone, including the daughter. The following February, she applied for Medicaid.
The agency considered the gifts disqualifying transfers of property for less than fair value and denied the application. The applicant requested an administrative hearing. The daughter testified at the hearing. The mother did not appear, although the parties agreed that at all times she was mentally competent and capable of handling her own affairs. After the hearing, the administrative law judge (ALJ) recommended that the agency impose a penalty period from September 2, 2005, through July 15, 2008.
The agency determined that the property must be considered available to the applicant because the transfers were voidable when they were made. As attorney-in-fact for her mother, the daughter was in the position of a trustee under state law. State law presumed that any transfers to a trustee or attorney-in-fact were the result of undue influence. The mother's signed statement and the daughter's testimony were not enough to overcome the presumption. The best evidence of the mother's intent was her testimony.
Effective date of gifts
The applicant argued that the look-back period for some of the gifts had expired. The agency contended that the transfers were voidable until September 2005, when the mother signed her statement of her intention to make the gifts. The court upheld the agency. Under state law, a gift is complete when the donor has no legal means to take ownership back. Because the applicant could have sued to set aside the gifts, signing the document affirming her intent to make them was the final act that put the property beyond her control. Therefore, the agency properly determined that all of the transfers had been made on that date
Source: Makedonsky v. North Dakota Department of Human Services, N.D., March 20, 2008.
For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.
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