Medicaid Applicant's Transfer to Pooled Trust Is Subject to Penalty Period

A Kansas appeals court holds that a Medicaid applicant who is older than age 65 and who transfers assets to a pooled supplemental needs trust is subject to a penalty period if the transfer is for less than fair market value, but the question of whether the transfer in this instance was for less than fair market value is a fact question. Hutson v. Mosier (Kan. Ct. App., No. 117,020, Sept. 8, 2017).

When she was in her 70s, nursing home resident Marcia Hutson transferred assets from the sale of her home and a life insurance policy to a pooled supplemental needs trust. Ms. Hutson applied for Medicaid benefits. The state granted benefits, but imposed a penalty period.

Ms. Hutson appealed the penalty period. The state affirmed, and Ms. Hutson appealed to court. The trial court ruled that Ms. Hutson's transfer to the pooled trust was a transfer for less than market value and the penalty period was appropriate. Ms. Hutson appealed, arguing that the transfer was made for fair market value.

The Kansas Court of Appeals affirms in part, holding that "transfers of assets by Medicaid applicants age 65 or older to a pooled supplemental needs trust are subject to a penalty period if the transfer is for less than fair market value," but determining that the question of whether the transfer to the pooled trust was for fair market value is a fact question. The court remands the case to determine the factual question of whether Ms. Hutson transferred assets to the pooled supplemental needs trust for less than fair market value. In this inquiry, the burden of proof is on Ms. Hutson.

ElderLawAnswers member attorneys Ron M. Landsman, of Ron M. Landsman, P.A., of Rockville, Maryland, and Craig Reaves, of Reaves Law Firm, P.C., of Kansas City, Missouri, were amicus curiae for the National Academy of Elder Law Attorneys.

For the full text of this decision, go to: https://www.kscourts.org/Cases-and-Opinions/opinions/CtApp/2017/20170908/117020.pdf

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