Taking Dad’s Money…

Posted on October 18, 2010


A Minnesota appeals court rules that a son who transferred his father’s assets to himself in conjunction with Medicaid planning breached a fiduciary duty to his father and that the transferred assets are part of his father’s estate. Estate of Rutt (Minn. Ct. App., No. A09-2336, Oct. 12. 2010) (unpublished)

This decision is important because “Medicaid planning” means finding a way to give money to your heirs before you die so the U.S. Government pays for the nursing home bill. If people didn’t do this, their assets would be depleted before the person dies and there would be nothing left to inherit.

Actually, this practice is now illegal, and estate planners who assist in a “scheme” to implement it can be criminally liable.

In this case, the son transferred all his father’s money to himself so his father would be eligible for Medicaid. It also enriched the son. The Court is saying that the son owed a duty of care to his father that precluded taking all of his father’s money for himself. It should be noted that the nicer nursing homes don’t take Medicaid.

Posted in: Attorney