Court Finds Transfers Made by Wife of Medicaid Applicant to Adult Children Were Disqualifying Transfers

After Mr. Duclos entered a nursing home, Mrs. Duclos made transfers of $176,000 to their daughter, $11,787.83 to one of their sons, and $3,000 to their other son. In exchange, each child gave Mrs. Duclos a promissory note. Mrs. Duclos immediately converted the daughter’s promissory note into a private annuity.

Mr. Duclos then applied for Medicaid benefits and the state denied his application. The state claimed that the three transfers occurred during the look-back period. The trial court agreed, holding that the three transfers were disqualifying transfers. Mr. Duclos appealed.

In Jackson v. Director of Office of Medicaid (Mass. App. Ct., No. 10P706, July 19, 2011) the Massachusetts Court of Appeals affirmed the lower court’s ruling. The court determined that because there was no proof of Mrs. Duclos’s life expectancy at the time of the transfers, the promissory notes were not actually sound. The court further noted that the transfers given to the two sons did not prohibit cancellation at Ms. Duclos’s death and the private annuity did not name the state as a remainder beneficiary.

See Transfers to Children of Medicaid Applicant in Exchange for Promissory Notes Not Actuarially Sound, Elder Law Answers, Aug. 1, 2011.