Penalty Period Appropriate Because Medicaid Applicant’s House Was Sold for Less Than the Tax-Assessed Value of the House

An Illinois appeals court holds that a Medicaid applicant did not present enough evidence that he sold his house for fair market value to rebut the tax assessor’s valuation of the property. Maher v. Illinois Department of Human Services (Ill. Ct. App., 4th Dist., No. 4-19-0403, June 17, 2020).

Bernard Beiermann sold his home in 2015 for $7,000. The initial asking price for the property was $10,000, and it was advertised by placing a sign in the window. In 2016, he moved into a nursing home and applied for Medicaid. Mr. Beiermann died while the case was pending. The state determined that the fair market value of the property was $26,130 and imposed a penalty period.

Mr. Beiermann’s estate appealed the penalty period, arguing that the property was in poor condition. At a hearing, the purchasers submitted a letter stating that the property was not habitable when they bought it. The state argued that the tax bill for the property valued the property at $26,130 and there was no evidence on how Mr. Beiermann determined the asking price. The state and the trial court upheld the penalty period, and the estate appealed, arguing that the state used the wrong method to determine the fair market value.

The Illinois Appeals Court, 4th District, affirms, holding that the penalty period was appropriate. The court rules that because the state presented evidence of the tax assessor’s value, it was up to the estate “to present evidence rebutting that valuation to a degree that the valuation of $7000 was clearly evident.” According to the court, the letter from the purchasers did not state what their relationship was to Mr. Beiermann, there was no indication of how the property was listed for sale, and there was no evidence as to how the initial sale price was reached, so “it was reasonable for the [state] to have reviewed this evidence and found it was not conclusive enough of an arm-lengths transaction to rebut the [state’s] evidence.”

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