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Schell v. Department of Public Welfare

80 A.3d 844 (2013)

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Schell v. Department of Public Welfare

Pennsylvania Commonwealth Court

80 A.3d 844 (2013)

Facts

For many years, Dorothy Schell (plaintiff) was the beneficiary of a testamentary trust created by her late husband. At one point, the trustee determined that it was no longer practical to pay to have the trust administered and dissolved it. The trust’s terms gave Schell a right to receive approximately $300,000 from the dissolved trust, but she disclaimed her interest in the funds. Under the trust’s terms, the money then went to the couple’s two children. Approximately one year later, Schell was admitted to a nursing home. The nursing home applied for Medicaid benefits on Schell’s behalf. The Pennsylvania Department of Public Welfare (department) (defendant) determined that, by disclaiming her right to the $300,000, Schell had disposed of the resource for less than fair market value. The department determined that the $300,000 Schell essentially gave away could have paid for 582 days of nursing-home care. Accordingly, the department penalized Schell by making her ineligible for Medicaid benefits for 582 days. Schell appealed the ruling to an administrative-law judge, and the judge affirmed the department’s eligibility decision. Schell appealed to the Pennsylvania Commonwealth Court.

Rule of Law

Issue

Holding and Reasoning (McCullough, J.)

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