Court sides with nursing home against woman’s grandchildren

An elderly New York State woman thought she was doing the right thing for her grandchildren.

A court ruled otherwise, in a case of estate planning gone horribly wrong.

The woman, Lillian Hellman, sought to have four annuities, which she obtained in her name with her in control of the accounts, transferred to each of her grandchildren, making her insolvent and eligible for Medicaid once she had entered a nursing home.

Not so fast, nursing home officials said, and a court agreed with them, according to an article on the website elderlawanswers.com.

“In 2000, Lillian Heather purchased four annuities for each of her grandchildren as part of her estate plan,” the website stated. “The annuities named the grandchildren as annuitants and beneficiaries, but Ms. Heather retained control of the accounts. Ms. Heather also appointed her grandchildren as her attorneys-in-fact under a power of attorney. In 2006, Ms. Heather entered a nursing home. One granddaughter, 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. She applied for Medicaid benefits, but the state denied benefits because she had transferred assets for less than fair market value.

“The nursing home sued the grandchildren for fraudulent conveyance, arguing that they had transferred Ms. Heather’s assets for no consideration, rendering her insolvent. The nursing home also sued Ms. Goldman for breach of contract, arguing that Ms. Goldman had access to Ms. Heather’s assets and should have used them to pay for her grandmother’s care.”

The New York Supreme Court in Queens County sided with the Chapin Home for the Aging to the tune of $287,893.95.

“According to the court, it was undisputed that the transfers were made without consideration,” elderlawanswers related. “Moreover, the grandchildren did not present any evidence that the transfers did not make Ms. Heather insolvent. Nevertheless, the court rules that Ms. Goldman is not personally liable for breach of contract because the admission’s agreement did not make the designated representative personally liable.”