A New York trial court rules that a nursing home resident’s grandchildren are liable for fraudulent conveyance after the grandmother annuitized several annuities to them, rendering her insolvent and ineligible for Medicaid. Chapin Home for the Aging v. Heather (N.Y. Sup. Ct., No. 25327/2010, April 23, 2013).
In 2000, Lillian Heather purchased four annuities for each of her grandchildren as part of her estate plan. The annuities named the grandchildren as annuitants and beneficiaries, but Ms. Heather retained control of the accounts. Ms. Heather also appointed her grandchildren as her attorneys-in-fact under a power of attorney. In 2006, Ms. Heather entered a nursing home. One granddaughter, Kristin Goldman, signed the admission agreement as her designated representative. After entering the nursing home, Ms. Heather annuitized the annuities and the full value was transferred to the grandchildren. She applied for Medicaid benefits, but the state denied benefits because she had transferred assets for less than fair market value.
The nursing home sued the grandchildren for fraudulent conveyance, arguing that they had transferred Ms. Heather’s assets for no consideration, rendering her insolvent. The nursing home also sued Ms. Goldman for breach of contract, arguing that Ms. Goldman had access to Ms. Heather’s assets and should have used them to pay for her grandmother’s care.
The New York Supreme Court, Queens County, grants judgment for the nursing home in the amount of $287,893.95. According to the court, it was undisputed that the transfers were made without consideration. Moreover, the grandchildren did not present any evidence that the transfers did not make Ms. Heather insolvent. Nevertheless, the court rules that Ms. Goldman is not personally liable for breach of contract because the admission’s agreement did not make the designated representative personally liable.
For the full text of this decision, click here.
Medicaid Planning can be a helpful way to protect the assets of your family. However, you should not ‘go it alone.’ Medicaid Planning can be quite complex. Be sure to consult an attorney or law firm experienced in this field of expertise before proceeding. We have over 20 years experience in Elder Law and understand all facets of Medicaid Planning. Avoid the pitfalls and errors that can put you in a situation like above. For a free consultation, give me a call.
Regards, Brian
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