Molloy v. Bane - 214 A.D.2d 171, 631 N.Y.S.2d 910 (App. Div. 2nd Dept. 1995)

Rule:

A recipient of public assistance is obligated to utilize all available resources to eliminate or reduce the need for public assistance.

Facts:

Petitioner, Barbara Molloy, now age 56, had lived for most of her life in Suffolk County before moving to Florida. There she suffered a massive cerebral hemorrhage which left her partially paralyzed, unable to speak, and confined to a wheelchair. She was placed in a rehabilitation hospital in New York and was subsequently moved to the respondent Bishop Sherman Episcopalian Nursing Home in Rockland County. She began receiving medical assistance under the Medicaid program in 1989. In 1991, the petitioner's 18-year-old daughter Jennifer Molloy was killed in a car accident. The respondent Rockland County Department of Social Services earned of this event, and believing that the event could result in a potential recovery for wrongful death, requested on three occasions that the petitioner, through her other daughter Karen Buchholz as attorney-in-fact, assign to the respondent her share of Jennifer's estate. There was no response to the local agency's first two requests. Before receiving the third request, the petitioner filed a renunciation of her interest in the estate with the Surrogate's Court, Suffolk County. As a result of the petitioner’s renunciation, the respondent concluded that the petitioner had failed to cooperate with eligibility requirements by failing to pursue an available resource and by refusing to execute the tendered assignment, in violation of 18 NYCRR 360-2.3 (c) (1) and 360-3.2. Upon receipt of the respondent’s notice of intent to discontinue medical benefits, the petitioner demanded a hearing. After the fair hearing, the New York State Department of Social Services (hereinafter DSS) concluded that the petitioner had, by virtue of her renunciation, violated 18 NYCRR 360-2.3 (c) (1), pursuant to which she was obligated to pursue a potential resource. Subsequently, petitioner commenced the instant proceeding pursuant to CPLR article 78. 

Issue:

By renouncing her interest in her deceased daughter’s estate, did the petitioner fail to pursue an available resource in violation of N.Y. Comp. Codes R. & Regs. tit. 18, § 360-2.3(c)(1), thereby warranting the discontinuance of the medical assistance? 

Answer:

Yes.

Conclusion:

The court agreed with the determination discontinuing petitioner's medical assistance authorization, as a renunciation of a testamentary or intestate disposition under N.Y. Est. Powers & Trusts § 2-1.11 was not without its consequences for purposes of calculating eligibility for Medicaid. To the extent that the estate represented an available source of funds, petitioner violated N.Y. Comp. Codes R. & Regs. tit. 18, § 360-2.3(c)(1). The renunciation was the functional equivalent of an asset transfer, since by refusing to accept it herself, she effectively funneled it to other familial distributees. Furthermore, contrary to petitioner's contentions, there was no indication that she was compelled to participate in any wrongful death action to the detriment of her own health. There was no indication that she was to be called as a witness or otherwise forced to participate in any action by estate. Moreover, if the estate was really valueless, as she contended, petitioner would have lost nothing by executing the requested assignment.