Residence in Nursing Home not sufficient to defeat claim for Elective Share

The Medicaid program determines eligibility for a married applicant based on the amount of resources owned by the applicant and his spouse. If the community spouse dies first, the program will count as a resource the amount of assets that the surviving spouse is entitled to receive from the Estate to satisfy his claim for the “elective share.” If the individual fails to pursue his claim for the “elective share,” he may receive a transfer penalty for “giving away” the assets he should have received from the Estate. Alternatively, he may be deemed to have owned the amount of resources that he failed to seek. Also, the State imposes a lien against the estate of a deceased Medicaid beneficiary, and the lien attaches to all resources in which the individual had an interest at the time of death. One of the exceptions to having the right to claim an elective share is if the couple were living separate and apart at the time of the death under circumstances giving the deceased grounds for divorce.

The New Jersey Appellate Division has issued an opinion that examines many aspects of the claim for an elective share. Here is a pdf: Estate of Brown elective share case 2017.  Arthur Brown was married to Mary Brown. Arthur developed Alzheimers Disease and moved into Assisted Living. later he needed to move into a nursing home. He transferred his interest in the marital residence and other assets to his wife Mary and successfully applied for Medicaid benefits, which began in 2008. In 2010, Mary died, but Arthur did not claim the elective share and received no distribution from his wife’s Estate. The County Board of Social Services notified Arthur that it would impose a “transfer of assets penalty” on him and would discontinue benefits. One of Arthur’s positions was that at the time Mary died, they were living separate and apart and she would have had grounds for divorce due to his Alzheimers Disease. He pursued his appeals, and elected to have his Medicaid benefits continue during the appeal process. Arthur died in 2013 before the appeals were concluded. The State then imposed its lien, asserting that the amount of resources which would have comprised the elective share was subject to lien. That led to this case decision.

The case provides a detailed review of both the Medicaid lien statute as well as the issues involved with determining when the elective share applies. In particular, the Court held that there was no evidence that the marital relationship was disrupted or that either party had intended to seek divorce or initiated a complaint for divorce. Although the two of them had different residences, the presence of advanced Alzheimers Disease was not seen by the Court as proof in and of itself that grounds for divorce existed, so the Court agreed with the trial court Judge that allowing the exception to apply would create a broad risk that certain surviving spouses would be left with no support.

Every case is specific to its facts. Call us for advice on elective share claims and other Medicaid eligibility issues …….. 732-382-6070

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