Medicaid Applicant Did Not Permanently Gift Income From Life Estate

North Dakota’s highest court rules that a Medicaid applicant who had a life estate in property is entitled to the income generated from that property, even though she argued she permanently gifted the income to her son. Bleick v. North Dakota Dept. of Human Services (N.D., No. 20140103, March 24, 2015).

Shirley Bleick transferred property to her son in 1988, reserving a life estate for herself, and then she moved off the property.  In 1992, her son leased a portion of the property to another farmer for $8,200 a year. The rental income went to Ms. Bleick’s son. In 2011, Ms. Bleick applied for Medicaid benefits, but the application was denied. The state determined that Ms. Bleick should be receiving a portion of the rental income, so her countable assets exceeded the maximum limit

Ms. Bleick appealed the state’s decision, arguing she gifted the right to the income to her son. The trial court affirmed the state’s decision to deny Medicaid benefits, and Ms. Bleick appealed.

The North Dakota Supreme Court affirms, holding that the income stream from the life estate exceeds asset limits for Medicaid benefits. According to the court, if Ms. Bleick intended to gift all the income from the property to her son, she could have released the life estate and transferred title to the property. The court rules that the rental income, if it is viewed as a gift, is an annual gift. One justice dissents, arguing that all the evidence indicates that Ms. Bleick intended to permanently gift the income to her son.

David Wingate is an elder law attorney practicing in Frederick and Montgomery Counties, Maryland. The elder law practice consists of Wills, Powers of Attorneys, Trusts, asset protection and Medicaid (Medical Assistance.)

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