A New York court rules that a nursing home resident’s grandchildren are liable for fraudulent conveyance after the grandmother annuitized a number annuities to them, rendering her insolvent and ineligible for Medicaid.
As part of her estate plan, Lillian Heather purchased for annuities for each of her grandchildren in 2000. The grandchildren were name as annuitants and beneficiaries in the annuities, but Ms. Heather maintained control of the accounts. She also appointed her grandchildren as her attorneys-in-fact under a power of attorney.
In 2006, Ms. Heather entered a nursing home. One of her granddaughters, Kristin Goldman, signed the admission agreement as her designated representative. After entering the nursing home, Ms. Heather annuitized the annuities and the full value was transferred to the grandchildren. Upon applying for Medicaid benefits she learned that because she had transferred assets for less than fair market value, she wasn’t eligible.
The grandchildren were then sued by the nursing home for fraudulent conveyance, claiming they transferred Ms. Heather’s assets for no consideration, rendering her insolvent. Additionally, the nursing home sued Ms. Goldman for breach of contract, arguing Ms. Goldman had access to Ms. Heather’s assets.
The New York Supreme Court, Queens County, granted judgement for nursing home in the amount of $287,893.95. The court held that it was undisputed that the transfers were made without consideration and the grandchildren did not present evidence that the transfers did not make Ms. Heather insolvent. The court ruled that Ms. Goldman is not personally liable for breach of contract because the admission’s agreement did not make the designated representative personally liable.
(Related: The Benefits Of An Ira Trust)
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