The wife of an incapacitated man may, acting as her husband's guardian, transfer all his assets to herself for her support and to qualify him for Medicaid.
On August 1, 1996, Bipin Shah, a New Jersey resident, sustained serious brain damage while working in New York State. Mr. Shah was admitted to Stony Brook Hospital on Long Island and soon thereafter was transferred to Helen Hayes Hospital, a Rockland County, New York, facility operated by the New York State Department of Health. Mr. Shah has been comatose since the accident, and the cost of his care amounts to more than $1,000 per day. In January 1997 the hospital advised Mr. Shah''s wife, Kashmira, that the available insurance coverage for her husband''s care would soon be exhausted, and that "absent an accepted Medicaid application" both she and her husband would be responsible for the hospital''s "self-pay rate" of $1,608 per day.
On January 16, 1997, Mrs. Shah executed a form refusing to contribute to the cost of her husband''s care. Twelve days later, an application for Medicaid benefits was submitted to the Department of Social Services of Rockland County on Mr. Shah''s behalf. Mrs. Shah then filed a petition seeking appointment as guardian for her husband''s personal needs and property management, pursuant to article 81 of New York''s Mental Hygiene Law. Mrs. Shah specifically asked the court to "authorize her to transfer assets in the name of BIPIN SHAH to [her] so that she can use the assets to support their two children and herself, and so that BIPIN SHAH may qualify for medical assistance". The hospital opposed the guardianship petition, asserting, among other things, that Mr. Shah''s application for Medicaid benefits would likely be denied due to the fact that Mr. Shah was, at the time of his injury, a New Jersey resident, and that if the transfer were permitted, there would be no source of funds from which to pay Mr. Shah''s debts to the hospital.
On May 2, 1997, the Supreme Court granted Mrs. Shah''s petition. The court determined that, from the standpoint of residence, Mr. Shah would qualify for Medicaid in New York, ruling that "if the person is incapable of forming intent, then residency is where the individual is physically present". The court also concluded that the proposed transfer of assets would be beneficial to the care of Mrs. Shah and the couple''s two children. The hospital appealed, arguing, among other things, that the Supreme Court erred in permitting such a transfer without a hearing because, according to the rule announced in Matter of Gomprecht v. Gomprecht (86 N.Y.2d 47, 629 N.Y.S.2d 190, 652 N.E.2d 936), a community spouse has the right only to a "sufficient--but not excessive--amount of income and resources", and that there was at least an issue of fact as to whether the asset transfer would result in Mrs. Shah having "excessive resources."
Finding that Gomprecht is "completely inapplicable here," the Supreme Court''s Appellate Division rules that the Supreme Court properly allowed Mrs. Shah, as her husband''s guardian, to transfer Mr. Shah''s assets to herself as his spouse. Gomprecht, the court notes, involved a community spouse seeking an order of support against an institutionalized spouse, while the present case involves "an institutionalized spouse who . . . wishes in effect to make a gift of his assets." "The complexities of the Medicaid eligibility rules," the court writes, ". . . should never be allowed to blind us to the essential proposition that a man or a woman should normally have the absolute right to do anything that he or she wants to do with his or her assets, . . . [Mr. Shah] did not . . . lose that fundamental right merely because he is now incapacitated and financial decisions on his behalf must necessarily be made by a surrogate."
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