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A Family Theft – Part 2

                In last week’s post I told you about Joe’s problem.  He needed to apply for Medicaid for his sister, Sophie.  His sister, Mary, however, had told him that she took some of Sophie’s money and spent it herself.  He had confirmed at least $100,000 and counting.

                As I explained last week that would make Sophie ineligible for Medicaid benefits to pay for her nursing care for at least 10 months and maybe more – unless we can establish that Sophie did not willingly give this money to Mary.  So how do we do that?

                Well, just telling Medicaid that she did not give the money to Mary won’t work.  Medicaid will not take our word for it.  I explained to Joe that what he was alleging was theft which is a crime.  So, what do you when you are a victim of a crime?  You need to report it to the police.

                Joe initially balked at this and understandably so.  “How can I bring criminal charges against my sister”, he asked me.  I know it’s not easy, however, if the claim is that Mary took Sophie’s money without her permission that would be theft and the Medicaid caseworker is likely to ask why no criminal complaint was filed.  We can’t really convince them unless he takes some action.

                I also told Joe that I would suggest that he file a civil lawsuit to try to seek the recovery of the money.  He questioned that as well.  “Mary lives out of state and it would be difficult, if not impossible to recover any of the money.  It’s probably gone,” he told me.

                “That’s OK,” I told him because we are not really interested in the likelihood of recovery.  We just want to show Medicaid that we are trying to recover it and that it really was theft.  It then becomes more difficult for the State to say it was a gift if we are trying to recover the money.  “Avoiding a Medicaid penalty,” I told him, “is not dependent on the success of recovering the money.”  “ We only need to establish that it was not a willing transfer for less than fair value.”