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Medicaid “Transfer” Is Incomplete Until Joint Owners Withdraw Funds

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Dora Steinberg was 76 years old when her husband died. She decided that she should put her children’s names on her account. Right after her husband’s death in 1983 she opened a stock brokerage account with Dean Witter Reynolds with about $120,000. The account was titled in three names: her own, her son George Steinberg’s and her daughter Marsha Gross’.

Eleven years later several things had changed. For one, Ms. Steinberg’s investments had performed handsomely and the Dean Witter account was now worth over $240,000. Ms. Steinberg was not doing well herself, however, and it looked like she might need to move into an assisted living facility or nursing home.

In January, 1995, Ms. Steinberg’s children withdrew $190,000 from the Dean Witter account and placed the proceeds in accounts in their own names. Six months later, Ms. Steinberg moved into the Saunders House Nursing Home. Just over a year after that, Ms. Steinberg applied for Medicaid assistance with the cost of the nursing home.

The Pennsylvania Medicaid agency denied Ms. Steinberg’s application. According to the agency, Ms. Steinberg had not transferred control of any of the money until the children withdrew funds in 1995. By Ms. Steinberg’s reckoning, the transfer had occurred when she first placed her children’s names on the account.

After several administrative review hearings Ms. Steinberg appealed the denial of benefits to the court. Nearly three years after the initial Medicaid application, the courts agreed that she was not entitled to Medicaid when she first applied.

When a Medicaid applicant has made a gift within the three years before the application is filed, he or she will be ineligible for benefits for a calculated period. The length of that ineligibility is determined by dividing the total value of gifts by the average cost of nursing home care in the state (or region of a state) at the time of application. In Ms. Steinberg’s case, that calculation meant that she would not be eligible for Medicaid benefits until October, 1998—three years and ten months after funds were removed from the account. Steinberg v. Dep’t of Public Welfare, September 12, 2000.

Although she likely would have been ineligible anyway, it did not help that Ms. Steinberg’s Social Security number was listed on the account, and that she had paid all the taxes on the account’s income from the beginning. That was viewed as additional evidence that she had not really made a completed gift of all but $40,000 (as she alleged) when she first established the account.

The process is identical in Arizona, albeit with different numbers. While the value of Ms. Steinberg’s “gift” was divided by about $4,600, in Arizona the divisor would have been $3,352.91. In other words, Ms. Steinberg would not have been eligible in Arizona until September, 1999.

One irony: if no application had been filed for Medicaid assistance until after January, 1998, she would have been immediately eligible. By rushing to secure eligibility, Ms. Steinberg ended up paying privately for an additional ten months of nursing home care.

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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.