Molloy v. Bane
214 A.D.2d 171, 1995 N.Y. App. Div. LEXIS 12416, 631 N.Y.S.2d 910 (1995)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A Medicaid recipient's renunciation of an interest in a potential inheritance constitutes a failure to pursue an available resource. This action is the functional equivalent of an impermissible transfer of assets and may serve as a basis for terminating medical assistance benefits.
Facts:
- Barbara Molloy suffered a massive cerebral hemorrhage which left her partially paralyzed, unable to speak, and in need of nursing home care.
- In 1989, Molloy began receiving medical assistance under the Medicaid program to pay for her care.
- In 1991, Molloy's 18-year-old daughter, Jennifer Molloy, was killed in a car accident.
- Jennifer died intestate (without a will), creating a potential wrongful death claim for her estate, in which Barbara Molloy had an interest as a statutory distributee.
- The local social services agency asked Molloy on three occasions to assign her share of her daughter's estate to the agency.
- Instead of assigning her interest, Molloy, through her attorney-in-fact, filed a formal renunciation of her interest in Jennifer's estate with the Surrogate’s Court.
- As a result of the renunciation, Molloy's potential share of the estate passed to Jennifer's father, Molloy's ex-husband.
Procedural Posture:
- The Rockland County Department of Social Services sent Barbara Molloy a notice of intent to discontinue her medical assistance benefits.
- Molloy demanded a fair hearing before an Administrative Law Judge.
- Following the hearing, the New York State Department of Social Services (DSS) issued a final determination concluding Molloy had failed to pursue an available resource and terminated her benefits.
- Molloy commenced a proceeding pursuant to CPLR article 78 in the Supreme Court (a trial-level court) to challenge the DSS determination.
- The Supreme Court transferred the proceeding to the Appellate Division of the Supreme Court (an intermediate appellate court) for resolution.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a Medicaid recipient's renunciation of a potential inheritance from an intestate estate constitute a failure to pursue an available resource, thereby justifying the termination of their benefits?
Opinions:
Majority - Miller, J.
Yes. A Medicaid recipient's renunciation of a potential inheritance justifies the termination of their benefits because the public policy requiring recipients to pursue available resources to pay for their care is paramount to the general right to renounce an inheritance. The court reasoned that public aid is intended only for the truly needy, and recipients have an obligation to utilize all available resources to reduce their need for public assistance. The court characterized Molloy's renunciation as the 'functional equivalent of a transfer of an asset,' which is impermissible for purposes of maintaining Medicaid eligibility, as it effectively funneled a potential asset to another family member. By renouncing the potential asset, Molloy perpetuated her own neediness, violating the core principle of the Social Services Law. The court relied on precedent from another appellate court, Matter of Keuning v. Perales, and overruled lower court decisions that did not properly balance the right to renounce against public assistance policies.
Analysis:
This decision establishes that a Medicaid recipient's statutory right to renounce an inheritance under estate law is subordinate to their obligation to pursue resources under social services law. It solidifies the principle that a renunciation will be treated as an impermissible transfer of assets for the purpose of determining Medicaid eligibility. This holding prevents individuals from using estate planning tools to shelter assets that could otherwise be used to defray the cost of their publicly funded care. The case sets a strong precedent that will impact eligibility determinations in future cases where a recipient forgoes a potential asset, reinforcing the state's interest in preserving limited public funds for the truly needy.
