Superior Court Upholds MassHealth Applicant's Sale of Property to Daughter: A Summary of Clark v. Dehner

Overview

The implementation of the Deficit Reduction Act (DRA) has made it increasingly complicated for families to protect their assets from the high costs of long-term nursing home care. Many planning options were curtailed by the DRA, and state Medicaid agencies are implementing the revised rules at a disadvantage to families seeking government benefits. However, a 2009 Massachusetts Superior Court decision has validated a planning option involving the fair market value sale of assets to family members.



Background

In May of 2005, George and Susan Clark established the George E. & Susan Clark
Irrevocable Trust. They were named as grantors and trustees of the trust. George and Susan transferred title to their home located in Marshfield into the trust on the date the trust was executed. The home's value at that time was approximately $412,000. The trustees of the trust were to hold the property for the benefit of George and Susan's children, Michelle Dionne and Kerri Poole. This transfer disqualified George from MassHealth benefits for a period of fifty-two months beginning on the date of the transfer.



In August of 2006, George entered the Walden Nursing Home, a long-term care facility. He suffers from a degenerative condition called Pick's Disease. As George's date of admission was during the aforementioned fifty-two month ineligibility period, an alternative planning strategy was implemented. This strategy involved curing the original transfer through the sale of a partial interest in the home using a promissory note and mortgage executed between Susan and Michelle.



Promissory Note

The MassHealth regulations allow applicants for long-term care to sell assets through the use of a promissory note and mortgage if the following conditions are met: 1) the repayment of the note is actuarially sound, 2) the promissory note provides for equal payments during the life of the loan, 3) the promissory note prohibits cancellation of the balance on the death of the lender. See 130 C.M.R. 520.007(G)(3). The regulations do not specifically prohibit such transactions from occurring between family members, as long as the sales are for fair market value and meet the above requirements. However, in recent years, MassHealth has taken the position that such transactions between family members are not reasonably enforceable, and therefore should be treated as disqualifying transfers.


George submitted an application for Medicaid benefits on October 31, 2007. Although the promissory note executed between Susan and Michelle satisfied all of MassHealth's regulatory conditions, as described above, George's application for benefits was denied. The hearing officer determined that Michelle's purchase of the property interest was a disqualifying transfer of assets, due in large part to the fact that it occurred between family members.

Tomorrow we will share the supreme court decision.

Cohen & Oalican, LLP provide a full spectrum of services for the elderly, for disabled adults, and for the families.

Part 3 "Do I need to become a guardian for my parent" Cohen & Oalican,LLP offices in Boston, Andover Raynham

Cohen & Oalican, LLP specializing in elder law, guardianship and conservatorship present Part 3 of the series:

Do I need to become guardian for my parent?

The second way to get decision making authority is by having your parent directly give it to you with a durable power of attorney or health care proxy. A power of attorney is a document that allows a client to appoint an individual to act as the client's agent ("attorney-in-fact") on financial matters should the client ever become incapacitated. A health care proxy gives another person(the agent) the authority to make health care decisions should the principal become incapacitated.These documents are also called “advanced directives”. They are great way to make sure that you have the legal authority to make decisions for your family in the event they become incapacitated.

This series brought to you by Boston Attorneys Cohen & Oalican, LLP, specializing in Guardianship and Conservatorship.

Cohen & Oalican provide a full spectrum of services for the elderly, for disabled adults, and for the families.

Part 2 "Do I need to become a guardian for my parent" Cohen & Oalican,LLP offices in Boston, Andover Raynham

Cohen & Oalican, LLP specializing in elder law, guardianship and conservatorship present Part 2 of the series:

Do I need to become guardian for my parent?

Clients often ask us do I need to become guardian for my mother? Hopefully the answer is no.You can have legal authority to make decisions for another person in one of two ways. First is by having the Probate Court appoint you as guardian. Guardianship and conservatorship are legal relationships where the Probate Court gives one person (the guardian or conservator) the power to make decisions for another. Whenever possible we try to keep our clients out of court and that includes guardianship cases. We try to avoid guardianship for several reasons. First you are bringing your family’s private affairs into the public realm. Second the courts move slowly. Finally, the legal fees can be quite high, especially if there is any disagreement regarding who should serve as guardian. These problems have only gotten worse with the recent changes in the Massachusetts guardianship laws in July, 2009.

This series brought to you by Boston Attorneys ,Cohen & Oalican LLP, specializing in Guardianship and Conservatorship.

Cohen & Oalican provide a full spectrum of services for the elderly, for disabled adults, and for the families.

Cohen & Oalican, LLP "Do I need to become a guardian for my parent?

Cohen & Oalican, LLP specializing in elder law, guardianship and conservatorship present Part 1 of the series:

Do I need to become guardian for my parent?

This scenario may be all too familiar: your mother has dementia and is living alone at home. She’s always been a fiercely independent person. However, she’s beginning to “lose it”. Bills are not getting paid. Last week she left the stove on after making breakfast. You and your siblings just got together for the holidays and it seems clear you need to do something. Everyone has ideas but no one has a clear plan. It can be a difficult transition when a parent is no longer able to care for themselves. It may be unclear when its appropriate to take control of financial matters or health care decisions. Growing up as children we are used to our parents telling us what to do and looking out for our well-being. What happens when the children have to parent their parents? When a family member has cognitive impairments they may not be able to make decisions for themselves or their ability to participate in complicated decisions may be limited. Our clients want to respect their parent’s wishes and independence but they also want to make sure their parents are safe.

This series, brought to you by Boston Attorneys Cohen & Oalican, LLP, specializing in Guardianship and Conservatorship.

Cohen & Oalican provides a full spectrum of services for the elderly, for disabled adults, and for families.