No Medicaid Disqualification For “Bad Investment”, But A Five-Year Clash . . .

It’s not uncommon for parents to invest in a child’s business.  That’s exactly what Raymond Southwick did – he invested money in his son’s business, and in return he received promissory notes requiring repayment. 

The problem:  His son’s business almost immediately “went south”, leaving the promissory notes nearly worthless.  The BIGGER problem:   Mr. Southwick’s wife needed long term care in a nursing home, and the Medicaid office held that Mr. Southwick’s bad investment disqualified his wife from receiving Medicaid benefits for her nursing home care.

After five years of hearings, rehearings and trips to court, a Massachusetts trial court recently ruled that Mr. Southwick’s investment was not a transfer that disqualified his wife from receiving Medicaid.  Southwick v. Waldman (Mass.Super.Ct., No. PLCV2006-01026-B, Sept. 9, 2010).

The Court found that “there is no Medicaid rule that prohibits an applicant, member or spouse from making speculative investments,” and saw no evidence that the loans were a sham.  As a result, the Court concluded that there was no disqualifying transfer of assets and ordered that Mrs. Southwick be deemed eligible for Medicaid.

Again, like my recent post of the Michigan Medicaid case on purchasing LLC interests, this case is not posted to teach you the law, but to show you that this area is complicated and needs attention by an elder law attorney.  The goal is to make life easier, which does not include “five years of hearings, rehearings and trips to Court”.

Glenn R. Matecun

Michigan Elder Law Attorney

Explore posts in the same categories: Asset Protection, Estate Planning, Medicaid Planning, Nursing Home Planning

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: