Nursing Home Resident’s Son Who Got TOD Account Not Liable to Facility Under Ohio’s Fraudulent Transfer Law

An Ohio appeals court holds that the son of a nursing home resident is not liable to the nursing home under Ohio’s fraudulent transfer law for the resident’s unpaid bill because although the mother transferred her investment account to him on her death, the transfer did not leave her insolvent. Kingston of Miamisburg, LLC v. Jeffrey (Ohio Ct. App., 2nd Dist., No. 29021, Nov. 19, 2021).

In 2013, Marian Smith named her son, Fredric Smith, the transfer on death beneficiary of her investment account. In 2017, she entered a nursing home and died a month later, owing the nursing home $15,598.46.

The nursing home sued Mr. Smith under the state’s fraudulent transfer law, arguing that Ms. Smith fraudulently transferred the account to Mr. Smith. The law provides that a transfer is fraudulent if a debtor makes a transfer without receiving value in exchange and the debtor becomes insolvent as a result of the transfer. The trial court granted summary judgment to Mr. Smith under one provision of the law, but the appeals court remanded for a determination of whether the transfer was fraudulent under a different provision of the law. On remand, the trial court again granted summary judgment to Mr. Smith, and the nursing home appealed.

The Ohio Court of Appeals affirms, holding that Ms. Smith did not violate the fraudulent transfer law. According to the court, testimony at trial showed that Ms. Smith owned jewelry valued at close to $30,000 at the time of her death, so the transfer of the TOD account to Mr. Smith did not render her estate insolvent.

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