New York’s Fourth Department Appellate Division has made a ruling which should be of interest to those involved in estate planning and elder law. The Matter of Padulo v. Reed (2009 NY Slip Op 04813) concerned valuable savings bonds which had been purchased by the decedent during the 1970s and were given to family members in 2001. These bonds, however, were retained by the recipients and were not actually liquidated until 2004 and early 2005. Some of the proceeds were used to pay the expenses of the decedent in a nursing home.It was also found that proceeds had been deposited in a joint account with the decedent. In September 2005, the petitioner sought to have the decedent receive Medicaid benefits.
The application for Medicaid benefits was denied upon the grounds that the five year look-back period had not expired prior to the application date and that the portion of decedent’s bonds which had been retained as a gift by his daughter and grandchildren needed to be applied to his support. The petitioner claimed that the bonds had been transferred long enough in advance to comply with look back requirements. The Department of Health maintained that the operative date was not the date when the bonds had been transferred but the date on which they had been liquidated.
The Appellate Division agreed with the state. The key here was that the bonds may have been transferred to a family member , and even liquidated, but the decedent had never really relinquished control of the assets which had therefore never fully been transferred out of his name even though his children and grandchildren may have had physical possession of the instruments themselves.
What is also important about this case is that the petitioner had tried to establish the character of the assets in question by submitting affidavits from relatives to the Department of Health. Evidently, this was done rather than bring witnesses to testify at the Fair Hearing which was held to determine the appropriateness of the agency’s denial of benefits. The court found that the agency’s determination was final and would not substitute its own judgment for that of the hearing officer charged with the responsibility of trying the facts. Your lawblogger obviously cannot say whether or not a better prepared hearing would have led to a different outcome and I will not offer such an opinion.
What I can say, however, is that as a young Legal Aid attorney over thirty years ago, I was taught and conditioned to believe that there was not a single so-called Fair Hearing I could win at the trial level. My experience was always that the hearing examiners found in favor of the agency more often than not. It was therefore of paramount importance to build the record at the trial level and take nothing for granted. Always offer the best evidence — and as much of it as possible. Remember that the attorney representing the agency has a zillion matters and they all look alike to him or her. If you overwhelm the hearing with good, credible evidence, you will have a much better chance of winning the appeal — which is where most significant contested agency matters tend to end up.