Case Summaries
(decedent's gift of shares of stock to lifelong friend within six months of death deemed to have been in contemplation of death based on all facts and circumstances; statutory presumption of N.J.S.A. Sec. 54:33-1 et seq. that such transfer is a taxable as a testamentary substitute if made within three years of death not overcome; value of gifted stock included in decedent's gross estate for state inheritance/estate tax purposes).
(intervivos transfer of stock to executor was subject to inheritance tax because it was in lieu of testamentary disposition; stock gift done with intent to qualify transferor for Medicaid benefits and made at time transferor suffering from bacterial infection; transferor romantically involved with executor at time of transfer; stock transfer amounted to more than one-half of transferor’s estate value).
(will construction case involving separate wills executed by husband and wife in 1976 that left farmland to couple's ten children and granted a son the first option to buy the land at a 20 percent discount; father died in 1981 and son entered into contract with mother and siblings to buy 80 acres; contract eventually forfeited and land conveyed back to owners; mother executed new will in 2006 which excluded 5 children and also included son's purchase option; mother died in 2009; five excluded children brought declaratory judgment action claiming that parents executed contractual or mutual wills in 1976 which invalidated mother's 2006 will, and that son's purchase and forfeiture had distinguished his right to buy real estate at discount after mother died; court held that 1976 wills not determined to be contractual or mutual because neither will had any language even suggesting that they created any such agreement between the couple , and that son did not give up right to acquire farmland at 20 percent discount because contract did not indicate purpose to abandon opportunity to later purchase land at a discount).
(for state inheritance tax purposes, court upheld probate court's valuation of decedent's one-half interest in real estate; valuation of decedent's interest properly reduced to reflect decedent's one-half interest, but estate not entitled to aggregate discount of 30% to reflect lack of marketability and lack of control discount).
(IRS reissued proposed regulation that provides guidance on the election and application of alternate valuation approach authorized by I.R.C. Sec. 2032 to estates; key points of the proposed regulations: (1) identification of transactions that involve sales, exchanges, distributions or dispositions of estate property; (2) such transactions occurring during six-month post-death period to be valued on transaction date unless transaction involves exchange of interest in entity includible in gross estate, or involves distribution from account or entity that decedent had interest in at death; (3) when valuing such post-death transactions, decedent's percentage ownership/control in entity and degree of estate participation in post-death events irrelevant; (4) if post-death event deemed to have occurred at time of death, no distribution, etc., deemed to have occurred).
(the New York Times reports that Joe Paterno, former coach of Pennsylvania State University football team who was fired amid controversy surrounding former assistant coach and associated cover-up, on July 21, 2011, transferred family home worth $594,484.40 that was held in joint tenancy with wife to her for $1 plus "love and affection"; transfer appears to have been made with intent to shield transferor from potential creditors, but transferor's lawyers claim transfer part of overall "multiyear estate planning program").
(plaintiff's spouse died in Florida in 2001 leaving most of estate to others via "payable on death" designations; plaintiff elected to take elective share and Florida court determined that elective share was at least $145,037 and named persons responsible for contributing to elective share, including defendant; defendant put POD assets into two accounts with total value of over $180,000; plaintiff filed action against defendant to enforce judgment against defendant and also claimed that defendant fraudulently made distributions from the two accounts with intent to avoid plaintiff as creditor; litigation settled with defendant agreeing to pay plaintiff $12,000 plus balance in account, but defendant sued account holder for placing hold on account for over a year which caused defendant to suffer loss because accounts dropped in value during 2008; court ruled that defendant failed to offer evidence he was damaged by failing withdrawing funds before decline in value; trial court decision affirmed - defendant's claim speculation).
(apportionment method applies to graduated retained interests in property irrespective of whether such property held in trust; to extent trust corpus included in decedent's estate under I.R.C. Sec. 2036 due to the retention of the annuity, payments to the estate that are payable post-death are not subject to inclusion in the estate by virtue of I.R.C. Sec. 2033).
(caveators appeal summary judgment to father's will; daughters filed a caveat and court rejected; daughters claimed undue influence of son, executor of father's last will; verbal intentions of father before execution of will not enough for undue influence claim; court acknowledged the power of attorney executed on the same day as the final will not substantial enough evidence to influence will; court affirmed summary judgment to the propounder of the will).
(plaintiff's claim of fraudulent inducement in transfer of land from one trust to another barred by four-year statute of limitations; plaintiff on notice of problem with land transfer in 1999 and didn't bring claim until 2007).
(case involves attempt of decedent's son to invalidate decedent's partial revocation of revocable trust that removed son as beneficiary (she had already provided for him and was not disinheriting him); trust language specified that "interests of beneficiaries are presently vested interests subject to divestment which shall continue until this Trust is revoked or terminated other than by death"; trial court held that son's interest not terminated because decedent had not completely revoked trust; on appeal, trust amendment upheld because Uniform Trust Code (UTC) overruled prior state Supreme Court opinion requiring complete revocation to divest beneficiary's interest; UTC provides trust settlors with wide discretion to revoke, amend or modify revocable trusts).
(trust was residual beneficiary of estate and trust assets were included in gross estate; trust borrowed money to allow estate to pay estate taxes; estate entitled to administrative expense deduction for interest on the loan; loan was bona fide debt and ascertainable with reasonable certainty and was actually and reasonably necessary - estate not required to sell assets at a discount to come up with the funds to pay estate tax; terms of loan reasonable).
(decedent had executed two wills during life and the second will was admitted to probate; more than two years after will admitted to probate, decedent's niece sued to set aside the will and probate the first will; two-year statute of limitations on such actions triggered on date of admission of will to probate and not when executor served niece with original petition to recover estate assets (which was the time the niece learned of the existence of the second will and that it had been admitted to probate); discovery rule inapplicable to will contest actions unless fraud or forgery present; court noted that probate records are public and all persons on constructive notice if they have any intent to contest the will; unawareness of probate proceedings does not impact statute of limitations).
(grantor established revocable living trust and died at age 62; surviving spouse age 61 at time of grantor’s death; grantor left two children (who are not surviving spouse’s children; grantor, during life, participated in employer’s qualified defined benefit contribution plan; trust provided for creation of marital trust for surviving spouse funded with employee benefit plans, and created primary trusts and exemption trusts for each of children; exemption trusts get equal shares of grantor’s remaining GSTT exemption and primary trusts get balance of trust assets after all other distributions and allocations; surviving spouse gets net income generated by marital trust assets and trustee has invasion power for surviving spouse; plan provided for direct rollover of distribution to non-spousal beneficiary that is a designated beneficiary; IRS rules that beneficiaries treated as designated beneficiaries; surviving spouse’s life expectancy to be used to determine distribution period; amount directly rolled over to IRA established on behalf of marital trust not included in income or marital trust).
(appellant transferred title to his home to his two sons and himself by warranty deed in 2003 for consideration of $500 or less; in 2009, appellant executed warranty deed transferring title to home to the two sons, reserving a life estate for consideration of $500 or less; 2009 deed referred to as "corrective deed" and referred to 2003 deed; five months after execution of "corrective deed," appellant applied for Medicaid benefits; state Medicaid agency determined that appellant made disqualified transfer of home by virtue of 2009 deed in which the appellant transferred his interest as joint tenant without receiving fair market value compensation and imposed 3.84-month ineligibility period for Medicaid benefits; agency decision upheld at hearing and hearing decision upheld by trial court; on appeal, court noted that transfers within 5-year look-back period are presumed to have been made for purpose of establishing or maintaining medical assistance eligibility; 2009 deed did not merely correct 2003 deed - 2003 deed conveyed a one-third joint tenancy to each of the sons with no reference to a life estate, while 2009 deed does more than simply correct clerical error; one son's testimony that father intended to transfer life estate in 2003 rejected and agency's determination entitled to deference).
(Medicaid applicant’s transfer of house to children with reservation of life estate is disqualified transfer resulting in transfer penalty; deed to house transferred to children in 2003; life estate reserved via separate deed in 2009 which purported to correct error in 2003 deed; later in 2009, Medicaid benefit application filed on transferor’s behalf; state determined that transfer was of an uncompensated joint tenancy and imposed transfer penalty; lack of evidence that 2003 deed intended to reserve life estate, so 2009 deed did not merely correct clerical error).
(court applied Iowa Code §598.21(2009) to divide inherited property in divorce; couple were married 25 years; husband inherited 160-acre farm in 1990; couple lived on property; couple used wife's inheritance as down payment on 85-acres bordering husband's inherited property; court found no evidence husband's parents intended to include wife in inheritance of property; court upheld wife's property award of 85-acre tract but that husband’s inherited farm not subject to division).
(assets that Medicaid applicant transferred to children who later on same day transferred assets to irrevocable trust for applicant’s benefit held to be available to applicant for Medicaid eligibility purposes even though transfer occurred 17 years before application; under state (WI) law, assets in trust are deemed available if applicant’s assets used to fund trust and trust formed under applicant’s direction; not necessary that applicant have legal ownership of assets used to form trust at time trust is formed; reasonable inference present that children created trust at applicant’s direction).
(valuation of decedent's 15 percent interest in LLC at issue; estate valued interest at $34,936,000 and, on audit, IRS valued interest at $49,500,000; court determined that proper value was less than what estate valued interest at - $32,601,640; estate entitled to refund of $861,422; in revised opinion; court recalculated LLC units used the correct present value factor to value the present value of a reversion to be received at the end of the fifth year and adjusted the value of the LLC units upward by $3,160,120).
(administrator appealed denial of equitable defenses for Medicaid reimbursement; administrator filed a separate tort action seeking damages; case has not been resolved; Department of Human Services filed a claim against the estate for reimbursement to recover Medicaid payments made; estate sought declaratory judgment; estate's request was denied; court stated case is not ripe since adverse claims exist and are based on speculative facts; court reversed and remanded with directions; if the estate receives fund from the underlying claim, the issue would be ripe and can be resolved at that time).
(after executing will in 2002, decedent and wife executed post-nuptial agreement in 2007; decedent died while couple still married; agreement stated that parties waived "all rights" on multiple occasions; surviving spouse claimed that agreement allowed her to receive bequest under decedent's will, but agreement unambiguously addressed property transfers occurring after agreement entered into; decedent had children from prior marriage, and prior wife challenged bequest to surviving spouse; agreement only inapplicable to will executed after post-nuptial agreement signed).
(estate tax lien of I.R.C. Sec. 6324(a)(1) attaches to property on date of decedent’s death and taxes assessed when estate tax return filed; plaintiff, as executor of decedent’s estate, brought quiet title action eleven months after decedent’s death; statute of limitations for quiet title action begins running upon assessment of estate tax, not when estate tax lien attaches because it is not known at time lien attaches whether lien will be necessary – indeed four to six months after estate tax return filed, IRS provides estate with closing letter which indicates whether lien necessary; plaintiff’s claim had to be filed within six years of date taxes assessed (when return filed); claim timely).
(Medicaid applicant’s transfer of money to child coupled with child using funds to private pay for applicant’s care during applicable Medicaid look-back period resulted in trust-like device causing funds to be deemed available to applicant for eligibility purposes; transfer not deemed to be a gift so no penalty period triggered; court denies preliminary injunction (which would have allowed Medicaid benefits to be paid pending resolution of case) because plaintiff could not show likelihood of success on merits).
Fortmann v. Starkowski, No. 3:10cv1562 (JBA), 2011 U.S. Dist. LEXIS 110643 (D. Conn. Sept. 28, 2011)
(plaintiff resides in nursing home and sought preliminary injunction that would require state Medicaid agency to provide plaintiff with Medicaid benefits without taking into consideration community spouse’s resources because the right to those resources had already been assigned to the state; court granted motion; even though community spouse could be located, state anti-assignment statute pre-empted by 42 U.S.C. Sec. 1396(k) which requires states to provide for such assignments so that nursing home resident cannot be denied eligibility due to resources of community spouse).
(transfers to irrevocable trust under terms of which trustee had full discretion to administer trust for beneficiaries of charity constituted completed gifts of beneficial term interests because donors’ retained testamentary limited powers of appointment relate only to trust remainder; gift tax incurred on transfer and transfer not incomplete gift covered by Treas. Reg. Sec. 25.2522-2(b); IRS analyzed income and remainder interests separately and concluded that POA impacted only remainder interest and did not impact what beneficiaries would receive during term interest - donors had no retained interest in term interest; gifts not of minority interests equal in value to donors’ respective withdrawal rights (Crummey Powers) which would reduce the taxable gifts to zero because withdrawal rights not legally enforceable; beneficiary could not enforce withdrawal right in state court; no annual exclusion allowable for any of the withdrawal rights).
(son rented 159-acre farm from mother for nearly 20 years at $39.75/acre and, in 2008, purchased farm from her via contract for deed; purchase price was set at 1984 appraised value of $117,000 (price was 1984 option price, which option son did not exercise) with payments of $6,902.98 over 30 years; fair market value of farm was $697,000; purchase contract executed at office of son’s lawyer who never represented that he was only the son’s lawyer and did not suggest that mother obtain her own counsel; mother was 84 at time contract executed, hard of hearing and had only an eight-grade education; mother later became suspicious and sought rescission of contract on basis of undue influence, and damages for breach of pre-contract oral lease; jury decided for son on lease claim and court granted mother’s rescission claim based on presence of confidential relationship and that four elements of undue influence established; court ordered contract rescinded and ordered son to pay rent for 2009 and 2010; decision affirmed on appeal).
(marital dissolution case; appellant ex-husband challenged district court’s division of marital property and award of child support, spousal maintenance, and attorney’s fees; appellate court affirmed in part, reversed in part, and remanded; trial court found husband’s share of family farm property was marital and found seven-acre parcel adjacent to family farm and deeded by parents was nonmarital property; appellate court held ex-husband failed to rebut presumption that farm acquired during marriage was not a gift and was marital property).
(marital dissolution case; ex-husband challenged trial court’s determination that parties’ farmland was marital property, court’s award of temporary spousal maintenance, court’s calculation of respondent’s income for child support purposes, court’s failure to order retroactive child support and court’s award of conduct-based attorney fees to respondent; appellate court affirmed in part, reversed in part, and remanded; court held trial court did not err in determining farmland marital property; real property acquired by parties at any time during marriage is presumed marital property unless party can show by preponderance of evidence that it is nonmarital).
(action by beneficiaries of trust to remove defendant as successor trustee because bank went through series of mergers and did not maintain position for trust officer in local bank; trustee may be removed by court “for cause” when trustee’s “continuation in role would be detrimental to interests of beneficiaries” in Kentucky, including changes in place of trust administration; federal district court ordered removal of successor trustee and granted plaintiffs’ motion for summary judgment).
(decedent's will bequeathed tangible personal property and residuary estate to his "eight (8) children, per stirpes"; with respect to the distribution of tangible personal property, will gave executor sole discretion to dispose of such property in a reasonable manner; executor simply given discretion to dispose of residue of estate; executor, who was also an heir, distributed all of decedent's interest in annuity to executor; court determined that "per stirpes" language in will meant that members of class take per capita and discretion given to executor extends only to the equal division of non-fungible items).
(decedent died intestate in 2006; children of decedent’s biological sister were only heirs; in 2009, administrator discovered that biological sister had been adopted in 1981 at age of 53 by decedent's aunt by marriage; trial court interpreted Virginia’s intestacy statutes to hold nieces and nephews were not decedent’s heirs at law because biological sister’s adult adoption severed legal ties to decedent and her estate; trial court also held intestacy statute does not distinguish between adoption of adult and adoption of minor; nieces and nephews appealed and appellate court affirmed, statute was clear and unambiguous that adopted person is child of adopting parent not of biological parents; result was that decedent's biological sibling was not decedent's heir under state intestacy law - the sister's adult adoption divested her and her descendants of inheritance rights running from her biological family).
(plaintiff, beneficiary of mother’s estate, alleged father orally agreed in 1970’s that she could purchase house from estate for $30,000; house appraised at $87,000 in estate; will gave all six beneficiaries equal, undivided portion; executors sold property to defendants over plaintiff’s objections in 2004; plaintiff filed suit alleging fraud in 2010; plaintiffs claims were dismissed for failure to allege tortious conduct within two year statute of limitations and failure to “state with particularity the circumstances constituting fraud or mistake”).
(Social Security Administration's interpretation of Social Security Act is that posthumously-conceived child who was a natural child of the decedent not entitled to benefits unless inheritance rights exist under state law or other statutory requirements satisfied; posthumously-conceived child not dependent on decedent at time of decedent's death; SSA interpretation reasonable and entitled to deference and state (IA) law does not entitle child to benefits; court noted that, during pendency of appeal, IA legislature enacted law providing intestate succession rights to posthumously conceived children under certain circumstances (H.F. 245, 2011 Session, codified at Iowa Code Sec. 633.220A); SSA's final decision in case was Dec. 22, 2008, and state law not retroactive in application so of no effect on case).
(will contest case; surviving spouse challenged jury verdict that will of deceased wife was unenforceable because surviving spouse exerted undue influence; surviving spouse challenged conveyance of 77-acre tract to daughter months before will execution; admission of nurse’s reports to prove undue influence were admissible as business records regarding decedent’s medical treatment; legally sufficient evidence to support jury’s finding of undue influence to subvert decedent’s intention to give family farm to daughter; handwritten deed conveyed farm to daughter; deed was delivered and evidence showed decedent intended to convey farm to daughter).
(defendants, off-farm siblings, appeal from trial court judgment reforming terms of parents’ revocable living trusts and determining brother, on-farm heir, was to receive farmland held in limited liability partnership in addition to one-fourth interest in residue of parents’ trusts; defendants claimed parents’ revocable trust indicated farmland held in LLP should have been distributed equally between four children; appellate court affirmed concluding trial court did not err in distributing farmland in LLP to on-farm heir’s generation skipping trust; parents’ revocable trust clearly referenced on-farm heir and evidence showed parents’ intent to gift land to on-farm heir; appellate court ordered documents reformed due to errors in drafting by LLP attorney).
(decedent's will frafted with use of pre-printed form which made specific devises, but did not contain a residuary clause; decedent inherited real and personal property after executing will and died without amending will; court held that after-acquired property passes by intestacy; testator's intent limited to disposition of specific bequests and will made no mention of real estate or non-IRA account).
(state of PA revised state Medicaid eligibility requirements that had the effect of making it more difficult for disabled persons to qualify for Medicaid benefits by placing strict requirements on pooled trusts; limits allowed the use of pooled trusts only by persons with special needs that were age 65 or under and disqualified all members of pooled trust from receiving exemption if one member failed to meet specified requirements; plaintiffs claimed that restrictions were invalid as exceeding federal law; PA claimed that restrictions did not involve Medicaid eligibility, but only regulated special needs trusts in general; court invalidated portion of law making persons ineligible that were Medicaid-eligible under federal law; court also invalidated portion of law that forced pooled trusts to use one-half of funds remaining in deceased beneficiary's account to reimburse PA for Medicaid services provided during life, and portion that forced trusts to only make expenditures reasonably related to beneficiary's needs).
(court affirms lower court determination that generation-skipping trusts established for settlors' children should be reformed; during life settlors (married couple) executed identical revocable trusts specifying that interests in LLLP pass to GSTT trusts; before deaths, some farm land deeded to LLLP; upon death of both settlors, trustee petitioned court for reformation order and scrivenor submitted affidavit that settlors intended to give their LLLP interests only to the trust for a son; clear and convincing evidence present to support reformation).
(when an estate makes an I.R.C. Sec. 6166(b)(8) (applicable to holding company stock) election, it cannot use the deferral option of I.R.C. Sec. 6166(a)(3) (general installment payment election); election applicable to all entire estate tax liability and not the portion that qualifies under I.R.C. Sec. 6166(b)(8); there is not ability to make a "bifurcated" election).
(appellant inherited two-thirds interest in real estate from father’s estate; father’s second wife’s heirs inherited one-third after surviving spouse made spousal election against estate; appellant appealed court order setting aside his right to purchase other heirs’ one-third interest in parcel; during probate, appellant argued certain estate property was owned personally by him; appellate court did not address legal claims and dismissed appeal because order appealed was interlocutory and not an appealable final judgment).
(state (MD) law allows creditors filing claims before personal representative of estate appointed to file with register of wills in county of decedent's residence at death; decedent live in one county until taken to hospital in another county after an injury, and remained in hospital for 11 months until death; defendant filed claim for hospital bill of $206,343 with register of wills where hospital located and when will later admitted to probate in such county, personal representative denied defendant's claim as not being timely filed because decedent did not "reside" in such county at death; court allowed hospital's claim on basis that creditor must be able to easily determine residency and on basis of objective facts concerning residency; court noted that mere presence in county at time of death does not establish residency under state law, but it was highly unlikely that decedent would have ever been able to return home).
(estate executor paid estate tax in 2003 and filed Form 706 in 2004 and then filed claim for refund of estate tax in 2007; IRS moved for summary judgment on basis that refund sought was outside look-back period set forth in I.R.C. Sec. 6511(b)(2)(A) which limits refund to portion of tax paid within look-back period of three years immediately preceding filing of claim (plus the period of time for filing the return); executor received extension of time to file Form 706 and also received second extension; court affirmed trial court decision that IRS had no authority to grant second six-month extension based on Treas. Reg. Sec. 20.6081-1; thus, because executor's claim filed more than three years plus six months after payment of estate tax, refund request was untimely).
(IRS determined that self-dealing was not present upon executor's sale of limited partnerships held in marital trust of pre-deceased spouse for which decedent (as surviving spouse) was sole beneficiary; after surviving spouse died, trustees of testamentary charitable lead trust inherited part of limited partnerships from decedent; buy-sell agreement triggered upon decedent's death requiring executor to sell to the limited partnership, the limited partnership interests; no self-dealing as sale qualifies as estate administration).
(estate executor paid estate tax in 2003 and filed Form 706 in 2004 and then filed claim for refund of estate tax in 2007; IRS moved for summary judgment on basis that refund sought was outside look-back period set forth in I.R.C. Sec. 6511(b)(2)(A) which limits refund to portion of tax paid within look-back period of three years immediately preceding filing of claim (plus the period of time for filing the return); executor received extension of time to file Form 706 and also received second extension; court affirmed trial court decision that IRS had no authority to grant second six-month extension based on Treas. Reg. Sec. 20.6081-1; thus, because executor's claim filed more than three years plus six months after payment of estate tax, refund request was untimely. [note - case similar to Estate of Telesmanich v. Comr., T.C. Memo. 2011-181], in which court held that incorrect information provided by IRS to estate executor was not proven to be the reason the executor failed to timely pay taxes because executor had no access to the funds to pay taxes until eight years after decedent's death caused by international probate matters; I.R.C. Sec. 6404(e)(1) inapplicable to excuse abatement of interest).
(beneficiaries of estate entered into settlement agreement resulting in executor distributing $190,000 in estate assets and payment of funds to plaintiff to be held in escrow for income tax payment purposes; escrow amount invested in CD; due to liability with possible multiple parties over funds plaintiff put entire amount into court registry; summary judgment for government granted; government has priority to funds for payment of tax claims).
(married couple sold their corporate stock back to the corporation in return for monthly payments over a 15-year period; payments to be made to heirs of either husband or wife in event of disability or death; husband died and will disinherited three sons and left balance of property to surviving spouse for life with remainder to fourth son; upon surviving spouse's death remainderman filed breach of contract action claiming that corporation had not made required payments; trial court summary judgment for remainderman granted on basis that contract with corporation demonstrated that couple intended to make lifetime gift of payments to all of their sons; on appeal, court reversed on basis that couple retained distributional control over payments - no gift because no irrevocable present intent to transfer ownership).
(decedent's disclaimer of bequest from parent with resulting passage of disclaimed property to decedent's children not a gift resulting in gift tax liability to decedent's estate or decedent's wife's estate; state (MS) anti-lapse statute direct that when deceased beneficiary is child of testator, bequest does not lapse, but passes as if legatee had survived testator and then died intestate; to extent disclaimer resulted in lapsed bequest, disclaimed interest passed without any direction on decedent's part and constituted qualified disclaimer with no resulting gift tax liability).
(personal representative of daughter’s estate appeals probate court’s denial of distribution of proceeds from sale of parcel of farm real estate from mother’s trust; appellate court affirmed; trust gave two farms to grandson, and provided that if grandson sold farms the daughter was entitled to one-half of the net proceeds; grandson sold farm and daughter’s estate claimed entitlement to half of the proceeds; issue before trial court was whether mother intended daughter’s interest to be personal to daughter; trial court concluded and appellate court affirmed daughter’s interest was personal and terminated upon her death; daughter’s heirs not entitled to one-half share of proceeds).
(MN Gov. Dayton (DFL) signed into law a state budget that, among other things, exempts up to $4 million in qualified farms and small businesses from state estate tax).
(husband entered nursing home followed by wife's transfer of $176,000 to couple's daughter, $11,787.83 to a son and $3,000 to another son; all transfers were in return for a promissory note; promissory note from daughter converted into private annuity; husband applied for Medicaid benefits and application denied because transfers within applicable look-back period; court held that transfers were disqualifying transfers because promissory notes not actuarially sound and no proof existed of wife's life expectancy at time assets transferred; in addition, notes from sons did not bar cancellation on lender's death and note converted into annuity did not name state as remainder beneficiary).