JOINT BROKERAGE ACCOUNT

After  Dora's husband died in 1983, she became the sole owner of their jointly held assets.  Dora decided to protect this money by placing the names of her children with hers on the new brokerage account she opened.  That way, if she ever needed nursing home care, then she thought at least two-thirds of that $120,000 ($80,000), could not be touched by a nursing home.  As years went by, the account appreciated in value.  When it was worth $241,000 in January 1995,  Dora's children removed $200,000 from the account.

Dora took ill and was admitted to a nursing home in July 1995.  When she applied for Medical Assistance in January of 1997 asking that it be retroactive to November 1, 1996, the application was denied since the transfer of $200,000 in January of 1995 lacked fair consideration.

Dora's representative argued that by adding her two children's' names to the account in 1983, she made a gift of two-thirds of the account to the children in 1983.  Thus, they argued that no gift occurred when the children withdrew the money from the account in 1995.

Because Dora was the only one of the three who contributed the money to open the account, the transfer occurred in 1995 when her children removed $200,000.  (Steinberg v. Department of Public Welfare, 758 A. 2d 734 (Pa. Cmwlth. 2000)

Dora could not obtain Medical Assistance for her nursing home stay for years to come.  Had she known that placing her children's names on the account meant that the money was viewed as still hers, she would have benefited from engaging in other types of Medicaid planning.  If counseled properly, she might have preserved all of her assets for her children and been accepted immediately for Medical Assistance upon entrance to the nursing home.