By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Medicaid Attorney

In Part 1 of this series I introduced you to an interesting case between a nursing home and the owner of a home accused of receiving a fraudulent transfer. Below I will be continuing the outcome of this case.

After the transfer to the family friend, dad continued living in the home until he became ill and was admitted to a nursing home. The Hudson County Division of Welfare subsequently determined that the father was financially eligible for institutional Medicaid benefits. However, the Division imposed a penalty of 7 months, due to his transfer of the property for less than fair market value within the five-year lookback period. Instead of discharging the father from the nursing home, the operator allowed him to stay. At the time he died his outstanding nursing home bill was $332,460.60.

In the litigation that was filed, the judge found that the nursing home did not meet its burden of proving there was a fraudulent transfer under N.J.S.A. 25:2-25 (a) or (b). The judge found credible the testimony of the parties about the circumstances surrounding the transfer years earlier. The judge emphasized that the transfer occurred one and one-half years prior to the father’s admission to the nursing home, no one anticipated at the time of the transfer that he would be facing a nursing home stay, and the reasons for the title transfer were totally unrelated to his subsequent admission into a nursing home.

The judge noted there were four badges of fraud alleged by the nursing home in the case: (1) the transfer of the property was to an insider (a child); (2) the debtor, retained possession or control of the property through a life estate; (3) the transfer was of substantially all of the debtor’s assets; and (4) the value of consideration for the transfer, one dollar, was not reasonably equivalent. However, the judge concluded that these badges of fraud did not compel a finding of fraudulent transfer.

In my next post I will continue with the facts and outcome of the case.

To discuss your NJ Fraudulent Transfer matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.