By Harry S. Margolis
The great Supreme Court justice Oliver Wendell Holmes explained law and legal advice constitutes predictions of how a court will decide a case before it. Or in his more august wording:
The prophecies of what the courts will do in fact, and nothing more pretentious, are what I mean by the law.
In many situations, the law is very clear. Lawyers can say with near certainty what the results of a particular action will be. President Trump boasted on the campaign trail in 2016 that “I could stand in the middle of 5th Avenue and shoot somebody and I wouldn’t lose voters.” But we could be pretty sure he’d go to jail for doing so.
Many other cases are less certain. The law may be unclear or how it applies to a particular situation may be unclear. Or the courts or administrative agencies may be inconsistent. This is particularly the case with respect to MassHealth. They generally take a dim view of trusts used to shelter assets for long-term care planning and often reject cases involving perfectly good trusts. But we’ve also seen quite questionable trusts sail through the application process with no objections.
In addition, predictions are really no more than setting odds. If based on our experience with past cases, we advise a client that her trust has a 70% chance of being accepted by MassHealth, that also means that it has a 30% chance of being rejected. If she proceeds with an application for benefits and gets turned down, she may be upset that we advised her it most likely would be accepted, especially since we charged her a fee for shepherding the case through the application process.
Of course, lawyers can also alter the odds of success through effective advocacy. This is what my partners, Jeffrey A. Bloom and Patricia C. D’Agostino, did in two cases that I thought had poor prospects.
Defunct Life Insurance Policy
In Jeff’s case, he represented the heirs of a man who was supposed to maintain a substantial life insurance policy for the benefit of his daughter as part of his divorce settlement. Unfortunately, he had a drinking problem and as part of the downward spiral that lead to his death, the father stopped paying his life insurance premiums and his policy lapsed.
A life insurance policy is a contract. The bargain is that if the insured pays the premiums, upon his death, the insurance company will pay the death benefit. If one party to a contract doesn’t live up to his side of the bargain, then the other party is relieved of its obligation. As a result, I thought this was a pretty open and shut case in favor of the insurance company despite the sad facts of the case.
At first look, the insurance company thought so too and made a very low settlement offer of 6 cents on each dollar of death benefit. Jeff, however, was able to convince the company that it had a moral obligation to pay the claim based on its purpose as a company to insure people’s lives and provide for their dependents. Ultimately, the case settled half the death benefit.
MassHealth Accepts Corrective Deed
Tricia’s case involved real estate in the name of an applicant for MassHealth benefits. Over twenty years prior to her need for long-term care, mom transferred her property to her daughter and retained no ownership interest. Or at least she thought she had done so, as did the daughter who spent significant funds improving the property as an investment in her financial future. She also paid all the taxes and other maintenance expenses on the property, just as any owner would.
The daughter reached out to Tricia when she received a notice from MassHealth of an intent to place on a lien on her mother’s property. She was totally in shock because her mother did not own any real property and had been a MassHealth recipient for over three years in a skilled nursing facility.
Upon a title review, it became clear that a mistake had been made in the property transfer back in 1996. Mom, in fact, had owned two contiguous parcels and only one had been transferred to the daughter. One parcel was registered land and one was recorded land. Only the registered parcel was transferred. For some reason, due to the transfer of one parcel, the real estate tax bills for both parcels had always come in the daughter’s name since 1997, so she had no warning that she didn’t hold title to everything.
The way to correct this error would be to execute a new deed now conveying the recorded parcel. But this could cause a new five-year period of ineligibility for MassHealth and mom would lose MassHealth coverage. The other alternative would be not to transfer the recorded parcel. Mom could maintain her coverage, but the property would be subject to estate recovery at her death.
My assessment of the case was that the family would have to go with the second option; that MassHealth would enforce its rights under the deed as they stood no matter the fact that it was the result of an oversight.
Tricia, on the other hand, thought it was worth a shot to get MassHealth to agree to the new deed as a corrective measure and that the agency might not impose a penalty. She drafted a deed to transfer the recorded parcel, compiled the evidence of the daughter’s expenditures for the property since the original transfer and obtained an affidavit in support of the mother’s intent from the original attorney who did the deed work. And, to my surprise, MassHealth was reasonable and agreed not to impose a transfer penalty on the new deed and the case did not have to go to appeal.
The Morals of the Stories
What can we conclude from these two examples? First, that the law and institutions, whether private companies or government agencies (or courts) are unpredictable. Second, even when the odds are stacked against you, it’s sometimes worth taking a risk and pursuing your claim. Third, effective advocacy can sway the odds in your favor. Sometimes, the old saying “nothing ventured, nothing gained” holds true.