On appeal from the Division of Medical Assistance and Health Services, Agency Docket No. 02200-09192-01.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 15, 2009
Before Judges Carchman and Lihotz.
The questions presented on appeal relate to the construction and application of Medicaid regulations. Petitioners A.P. and M.P. appeal from a determination of the Director of the Division of Medical Assistance and Health Services (DMAHS), which affirmed the imposition of a penalty period of Medicaid ineligibility, as calculated by the Bergen County Board of Social Services (BCBSS). The Director concluded petitioners' execution of a deed conveying their interests in a family home was an impermissible transfer of resources. Following our review, we reverse and remand for further proceedings.
The essential facts are undisputed. M.P., A.P. and A.B. are siblings. M.P. was born developmentally disabled. She and A.P. resided in the family home. In 1973, following their parents' death, A.P. became M.P.'s primary caretaker. The family home was devised, pursuant to their parents' will, which stated:
We give and devise to our daughters, [A.P.] and [M.P.], our real property*fn1... for life, HOWEVER, in the event our daughter [M.P.] predeceases [A.P.], then at said time, our real property... is hereby devised to our daughter, [A.P.]....
In the event our daughter, [A.P.], predeceases [M.P], we hereby direct that our daughter, [A.B.] shall provide all the necessary care needed by our daughter [M.P.], and in that event, we do hereby devise our real property... to our said daughter, [A.B.]....
In 1980, A.P., as the executrix of her parents' will, "executed deeds on the property to effectuate a minor subdivision." The property encompassed two and one-half lots on the municipal tax map. At some point thereafter, the numeric portion of the street address was changed from "190" to "186-190."
A.P.'s health began to decline, making her unable to continue as M.P.'s principal caregiver. On October 26, 1984, in a proceeding for guardianship, the court appointed A.P. and A.B. as co-guardians, granting them the power to manage M.P.'s financial affairs. This included the life estate in the family home.*fn2
When A.P.'s health deteriorated further, arrangements were made for A.B. to care for her siblings. On March 21, 1985, A.P., as executrix of the parents' estate and as co-guardian for M.P., along with A.B., as co-guardian for M.P., executed a mortgage encumbering the family home. The mortgage required the sum of $75,000, along with ten percent interest per year, to be paid on demand to A.B.*fn3 upon the sale of the family home. The mortgage additionally provided:
The holder of this Mortgage Note [A.B.] is to construct a dwelling on the property owned by the undersigned, and is to occupy said dwelling and is to pay [her] proportionate share of all taxes, and is to pay the costs of all utilities and the costs of hazard insurance.
The undersigned further agree with the Holders of said Mortgage Note that the undersigned... will never, for any reason, institute legal proceedings to evict the holders of this Mortgage Note from that portion of the dwelling which is to be constructed on said premises, and neither will the undersigned claim any rights of possession of same, however, upon the sale of the entire premises, the holders of said Note will vacate said premises upon payment of the principal and interest.
The holder of this Mortgage is to occupy the newly constructed portion of said premises and is to pay the proportionate ...