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Failure to Claim Share of Estate Results In Medicaid Ineligibility

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Medicaid, the federal-state program which pays for about half of all nursing home care in the United States, is governed by eligibility rules intended to discourage applicants from making gifts as a way of qualifying. For example, Medicaid penalizes most gifts for a period up to three years—though the actual penalty is usually shorter. Sometimes the penalty applies even when the applicant does not think she has given anything away.

Josephine Perna lived in a Pennsylvania nursing home when her husband Michael died in 1997. He had actually been living in New Jersey at the time of his death. New Jersey law permits a surviving spouse to claim a share of her deceased spouse’s estate even if his will leaves less (or nothing at all) to the surviving spouse—a process usually referred to as “electing against the will.” Mrs. Perna took no steps to make an election against her husband’s will.

Though Mrs. Perna had been receiving Medicaid assistance with her nursing home costs before her husband’s death, the Pennsylvania Medicaid agency determined that her failure to elect against her husband’s will amounted to a gift and terminated her benefits.

Mrs. Perna made two arguments on appeal. First, she pointed out that she would have had to make a claim against her husband’s estate in New Jersey, and that she lacked resources to travel to that state or to make her claim. Second, she argued that she and her husband had been living separate and apart from one another at the time of his death, and that she was not actually entitled to claim a portion of his estate under New Jersey law.

The Commonwealth Court of Pennsylvania, that state’s intermediate appellate court, disagreed. Whether it was difficult for Mrs. Perna to make her claim or not, ruled the court, she had a duty under Pennsylvania Medicaid law to seek her entitlement from her husband’s estate, and her failure to do so was really a gift.

On Mrs. Perna’s second point, the court opined that all the evidence indicated that Mr. and Mrs. Perna lived apart for medical reasons only, and were not truly separated. In fact, noted the court, Mrs. Perna was sending a portion of her income every month to support her husband, as she was permitted to do under Medicaid regulations; that fact supported the court’s finding that the couple was not truly separated. Perna v. Department of Public Welfare, August 22, 2002.

Arizona’s Medicaid program for long term care, the Arizona Long Term Care System (ALTCS), would probably have made the same determination if presented with Mrs. Perna’s circumstances. One big difference: the amount to which Mrs. Perna would have been entitled (and, therefore, the value of the “gift”) would probably have been much less in Arizona.

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Robert B. Fleming


Robert Fleming is a Fellow of both the American College of Trust and Estate Counsel and the National Academy of Elder Law Attorneys. He has been certified as a Specialist in Estate and Trust Law by the State Bar of Arizona‘s Board of Legal Specialization, and he is also a Certified Elder Law Attorney by the National Elder Law Foundation. Robert has a long history of involvement in local, state and national organizations. He is most proud of his instrumental involvement in the Special Needs Alliance, the premier national organization for lawyers dealing with special needs trusts and planning.

Robert has two adult children, two young grandchildren and a wife of over fifty years. He is devoted to all of them. He is also very fond of Rosalind Franklin (his office companion corgi), and his homebound cat Muninn. He just likes people, their pets and their stories.

Elizabeth N.R. Friman


Elizabeth Noble Rollings Friman is a principal and licensed fiduciary at Fleming & Curti, PLC. Elizabeth enjoys estate planning and helping families navigate trust and probate administrations. She is passionate about the fiduciary work that she performs as a trustee, personal representative, guardian, and conservator. Elizabeth works with CPAs, financial professionals, case managers, and medical providers to tailor solutions to complex family challenges. Elizabeth is often called upon to serve as a neutral party so that families can avoid protracted legal conflict. Elizabeth relies on the expertise of her team at Fleming & Curti, and as the Firm approaches its third decade, she is proud of the culture of care and consideration that the Firm embodies. Finding workable solutions to sensitive and complex family challenges is something that Elizabeth and the Fleming & Curti team do well.

Amy F. Matheson


Amy Farrell Matheson has worked as an attorney at Fleming & Curti since 2006. A member of the Southern Arizona Estate Planning Council, she is primarily responsible for estate planning and probate matters.

Amy graduated from Wellesley College with a double major in political science and English. She is an honors graduate of Suffolk University Law School and has been admitted to practice in Arizona, Massachusetts, New York, and the District of Columbia.

Prior to joining Fleming & Curti, Amy worked for American Public Television in Boston, and with the international trade group at White & Case, LLP, in Washington, D.C.

Amy’s husband, Tom, is an astronomer at NOIRLab and the Head of Time Domain Services, whose main project is ANTARES. Sadly, this does not involve actual time travel. Amy’s twin daughters are high school students; Finn, her Irish Red and White Setter, remains a puppy at heart.

Famous people's wills

Matthew M. Mansour


Matthew is a law clerk who recently earned his law degree from the University of Arizona James E. Rogers College of Law. His undergraduate degree is in psychology from the University of California, Santa Barbara. Matthew has had a passion for advocacy in the Tucson community since his time as a law student representative in the Workers’ Rights Clinic. He also has worked in both the Pima County Attorney’s Office and the Pima County Public Defender’s Office. He enjoys playing basketball, caring for his cat, and listening to audiobooks narrated by the authors.