An applicant for Medicaid may have eligibility for benefits delayed if he or she has recently transferred real property to an individual for less than the fair market value of the property. A penalty period is imposed if the transfer took place during a span of time known as the “look-back” period. This provision is meant to prevent duplicitous gaming of the Medicaid system, but, as a court recently noted, the provision does not justify viewing every property transfer with skepticism and disapproval merely because it precedes Medicaid eligibility.
In the case before the court, a 67-year-old who suffered from Alzheimer’s disease and other ailments applied for Medicaid assistance. The state agency that oversaw Medicaid rejected the application on the ground that the applicant had transferred real property for less than its value within the look-back period. The applicant, in fact, had conveyed the home where she lived to her three children as a gift, and the deed to the property was recorded shortly before she applied for Medicaid.
Nonetheless, the court overturned the agency decision because the agency had not properly pegged the point in time when the property transfer became effective as a matter of law. For various reasons, there had been a lengthy delay in getting the executed deed recorded, but the deed had been executed and delivered to the children well before the look-back period began. The court favored a “benevolent” interpretation of the family’s well-intentioned but haphazard attempts to follow up more promptly with recording the deed, rather than seeing it as part of a scheme to delay the transfer until it was apparent that the mother needed nursing home care and Medicaid money to pay for it.
It is a well-settled principle of property law that a transfer of real property is complete upon the execution and delivery of a deed and its acceptance by the recipient of the property, and nothing in the Medicaid regulations contradicts that principle. In the case at hand, there was no reason to suspect that the mother did not mean to convey the property as soon as the deed was executed and delivered. Since the transfer of the property was effective when the deed was transferred, the transfer occurred outside the look-back period and the applicant was eligible for Medicaid assistance.