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Happily, the results of these cases  largely benefitted elder law clients. One non-Medicaid case, outlining an attorney-in-fact's powers to gift, also made the list.

Life Care Planning, Estate Protection, Disability,
VA & Medicaid Assistance Lawyers

The Top 10 Elder Law Court Rulings in 2006

The Top 10 Elder Law Court Rulings in 2006


            The enactment of the Deficit Reduction Act of 2005 (DRA) overshadowed all other elder law developments in 2006 and promised years of litigation as states implement and courts interpret the DRA's Medicaid provisions. With only one exception, courts deciding cases in the 2006 Top 10 list were still grappling with pre-DRA Medicaid law.  This included a decision by the U.S. Supreme Court, which is of major significance to litigants in personal injury and medical malpractice cases.  Happily, the results of these cases  largely benefitted elder law clients. One non-Medicaid case, outlining an attorney-in-fact's powers to gift, also made the list.


•1.   Attorney Censured for Providing Incompetent Medicaid Planning Services

The Supreme Court of Kansas ruled that an attorney should be publicly censured for providing incompetent Medicaid planning services and other improper conduct. In the Matter of Myers (Kan., No. 95,132, Feb. 3, 2006).


•2.   Illinois Court Ruled State May Require Community Spouses to Share Income Post-Eligibility

An Illinois appeals court ruled that a state law making a community spouse's income available to an institutionalized spouse post-determination of Medicaid eligibility is not prohibited by the Medicare Catastrophic Coverage Act of 1988 (MCCA). Poindexter v. State (Ill. App. Ct. 4th, No. 5-05-0709, Dec. 12, 2006).


•3.   Supreme Court Ruled States May Place Lien Only on Medical Portion of Settlement

The U.S. Supreme Court unanimously ruled that an Arkansas statute requiring Medicaid applicants to assign to the state the entirety of any settlement violates the federal Medicaid law's "anti-lien statute," and that the state may recover only from those portions of third-party awards allocated for medical expenses. Arkansas Department of Health and Human Services, et al. v. Ahlborn, 547 U.S. ____ (2006).


•4.   Attorney Received Probation for Misguided Foray into Estate Planning

An attorney who drafted a will as a favor to friends despite having no estate planning experience was found to have incompetently represented the client's interests. A thirty-day suspension from the practice of law was stayed in favor of probation. In re Long (D.C., No. 04-BG-883, July 20, 2006).


•5.   Detailed Questions About Loan Allowed in Medicaid Eligibility Determination

A U.S. Court of Appeals held that a state can ask detailed questions about a legal, informal loan when determining Medicaid eligibility. Roach v. Morse (U.S. App. Ct., 2nd Cir., No. 05-2277-CV, March 3, 2006).


•6.   U.S. Court Rules Pennsylvania's Annuity Restrictions Violate Federal Medicaid Law

A U.S. District Court found that an actuarially sound annuity is not an available resource under federal Medicaid law even if it is marketable, and that Pennsylvania's provisions to the contrary contradict [pre-DRA] federal law. James v. Richman (U.S. Dist. Ct., M.D. of Penn., No. 3:05-2647, March 20, 2006).


•7.   Retaining Trust Income Is Not the Same As Reserving a Legal Life Estate

A New York appeals court ruled that retaining the right to income from assets transferred to an irrevocable trust does not reserve a legal life estate that would reduce the Medicaid ineligibility period assessed based on the transfer. In the Matter of Luscomb v. New York State Dept. of Health (N.Y. App. Div., 3rd, No. 98941, March 30, 2006).


•8.   Lump-Sum Payment Under Personal Service Contract Is an Allowable Transfer

A Louisiana appeals court ruled that a lump-sum payment pursuant to a personal care agreement is not a transfer of assets for less than fair market value and should not create a [pre-DRA] Medicaid disqualification period. Carpenter v. State (La. Ct. App., 1st, No. 2005 CA 1904, Sept. 20, 2006).


•9.   Court Will Not Backdate Gifts in Order to Predate DRA Transfer Changes

A New York trial court refused to backdate a gift to the date the petition was filed in court in order to predate the changes to Medicaid transfer laws contained in Deficit Reduction Act of 2005 (DRA). In the Matter of Rolland (N.Y. Supreme Ct., Tompkins County, No. 2005-0520, June 22, 2006).


•10.       NY High Court Said Attorney-in-Fact's Self-Gifts Must Be in Principal's Best Interest

Reversing lower courts, New York's highest court ruled that while an attorney-in-fact had authority to make unlimited gifts to himself, those gifts must be in the principal's best interest and conform to his overall estate plan. In the Matter of Ferrara (N.Y., No. 92, June 29, 2006).


Richard Habiger is an elder law attorney.  You may contact him at 618-549-4529 or