Is This Illegal? Immoral? Both???

[KillarneyRose]

Okay legal-minded Greekchatters; have a look-see at this situation and tell me what's up:

Suppose that a woman, lets call her Thelma, is 70 years old with failing health and knows she'll need to go into a nursing home in the near future. Thelma is LOADED. Between her home, her stock portfolio, her savings account and other real estate she owns, Thelma is worth close to $2.5 million.

Thelma knows that she has a couple of years left and she also knows that the cost of staying in a nursing home will pretty effectively suck up up all of her assets. So, she signs all of her assets over to her (adult) son.

When she enters the nursing home, she claims that she has nothing. Nada. Zilch. Therefore, Medicare kicks in and pays for all her medical care.

Two years later, Thelma passes away and her son is now worth an additional $2.5 million.

My jaw was on the floor when I heard this. Is this sort of maneuver legal? I don't like to see people having to liquidate all of their assets to pay for medical care, but this just doesn't seem right to me.