Melisa M. W. Mysliwiec
Fraser Trebilcock
Most of you have heard the term estate recovery by now and understand what it is. Estate recovery is the program through which the State of Michigan is paid back for Medicaid benefits provided to certain recipients upon the recipient's death by allowing the state to recover property from the recipient's probate estate. In an ideal world, estate recovery wouldn't be an issue for our clients because they would have taken the appropriate steps prior to death to ensure they wouldn't have a probate estate. But in reality, many individuals die as Medicaid recipients and, for any number of reasons, own a homestead that must pass through probate. If such a client walks through your door, estate recovery is now your issue. If you're faced with this issue, you would be wise to review the many differing opinions issued by various probate courts around the state and pay close attention to the eight estate recovery cases currently pending before the Michigan Court of Appeals. With one exception, each of the appeals were filed by the Department of Community Health.
The issue on appeal in each of these cases is either (1) whether the statutory notice requirements were met by the State of Michigan or (2) whether the estate qualifies for the home of modest value hardship exemption. MCL 400.112g(3)(e) requires the department of community health to provide written materials explaining the process for applying for a waiver from estate recovery due to hardship to the individual at the time he/she enrolls in Medicaid for long-term care services. MCL 400.112g(7) requires that the department of community health provide written information to individuals seeking Medicaid eligibility for long-term care services describing the provisions of the Michigan Medicaid estate recovery program, including, but not limited to, a statement that some or all of their estate may be recovered. Finally, MCL 400.112g(3(e)(i) provides that the department of community health shall develop a definition of hardship that includes an exemption for the portion of the value of the medical assistance recipient's homestead that is equal to or less than 50% of the average price of a home in the county in which the Medicaid recipient's homestead is located as of the date of the medical assistance recipient's death.
Some courts have ruled that if no notice of estate recovery was provided at the time of enrollment, even if a later Redetermination application contained a paragraph entitled "Estate Recovery" ("paragraph 12"), then estate recovery is barred. Several courts have ruled that paragraph 12 in the Medicaid application entitled "Estate Recovery" is not adequate notice under the statute, and, so, even where that exists, estate recovery is barred both in situations where it existed at the time of enrollment and where it only existed in a later Redetermination application. Additionally, many courts have ruled that the home of modest value hardship exemption is a statutory hardship exemption and it has been applied expressly as set forth in the statute.
Below is a list of the cases pending before the Michigan Court of Appeals (as of the date this article was written on 4/15/15).
1. In re Keyes Estate (COA Case No. 320420) from Bay County Probate Court.
2. In re Clark Estate (COA Case No. 320720) from Calhoun County Probate Court.
3. In re Gorney Estate (COA Case No. 323090) from Huron County Probate Court.
4. In re French Estate (COA Case No. 323185) from Calhoun County Probate Court.
5. In re Ketchum Estate (COA Case No. 323304) from Clinton County Probate Court.
6. In re Ketchum Estate (COA Case No. 324741) from Clinton County Circuit Court.
7. In re Galloway Estate (COA Case No. 325792) from Huron County Probate Court.
8. In re Rasmer Estate (COA Case No. 326642) from Bay County Probate Court.
Oral argument was heard in the Keyes case on April 10 and oral argument is scheduled for May 6 in the Clark case.
When faced with an estate recovery issue, pay special attention to all of the above arguments in addition to any others you may have under the statute. Unless one or more of the above probate court decisions are overturned, these are extremely viable defenses to estate recovery that you should consider pursuing on behalf of your client.
For more information, contact Melisa Mysliwiec at (800) 748-0436 or e-mail her at mmysliwiec@fraserlawfirm.com.
Published: Fri, Apr 17, 2015
