North Dakota's highest court reverses a lower court ruling that the caregiver child exemption for the transfer of a house did not apply because the Medicaid applicant's attorney-in-fact transferred the house, not the Medicaid applicant himself. Dahly v. Anderson (N.D., No. 20120013, Aug. 30, 2012).
Wilfred and Geraldine Dahly named their son, Rick, as their attorney-in-fact. In 2007, they both began suffering from dementia and their daughter, LeAnn Greenwall, moved from Kentucky to live with and care for them under a written care agreement. Mrs. Dahly eventually entered a nursing home and Ms. Greenwall continued to care for Mr. Dahly. In 2009, Rick, as attorney-in-fact, transferred Mrs. Dahly's interest in the home to Mr. Dahly. In 2010, Rick transferred Mr. Dahly's interest in the home to Ms. Greenwell. Mr. Dahly entered a nursing home, and Ms. Greenwell sold the home and gave half the proceeds to Rick.
Mr. Dahly applied for Medicaid, but the state denied him benefits, finding that the proceeds from the sale of the house were an available asset. Mr. Dahly appealed, arguing the caregiver child exemption for the transfer of the family home applied. The state argued that the exemption did not apply because Mr. Dahly did not transfer the house himself; instead Rick transferred the house as attorney-in-fact, which created a presumption of undue influence. The trial court agreed, and Mr. Dahly appealed.
The Supreme Court of North Dakota reverses, holding the caregiver child exemption applies. The court rules that Mr. Dahly and Ms. Greenwall complied precisely with the requirements of the exemption and the state was attempting to "circumvent a clear expression of federal law through an overly broad application of state trust law." The court notes that if the state's decision were upheld, then only mentally competent Medicaid applicants could use the caregiver child exemption. One justice dissents, arguing the exemption should not apply because the transfer was not to allow the daughter to remain in the home, "but rather to divide the applicant's assets among his children."
For the full text of this decision, go to: https://www.ndcourts.gov/court/opinions/20120013.htm.
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