The Idaho Supreme Court rules that the state may recover Medicaid benefits from the entire value of a property that a Medicaid recipient transferred to his daughter while retaining a life estate for himself. In re Estate of Peterson (Idaho, No. 40615, Aug. 13, 2014).
Melvin Peterson deeded property to his daughter, retaining a life estate for himself. He then applied for Medicaid benefits. When he died, Mr. Peterson had received a total of $171,386.94 in Medicaid benefits.
The state filed a claim against the estate to recover the Medicaid benefits it paid for Mr. Peterson’s care. Under Idaho law, the state may recover any property that passes outside of probate, including any property that that the Medicaid recipient had a legal interest in that passes to a survivor through a life estate or “other arrangement.” The trial court ruled that the life estate remainder interest, but not the retained life estate, was an estate asset, and the appeals court affirmed. The estate appealed, arguing Mr. Peterson had no interest in the life estate at his death, so it could not be subject to recovery.
The Idaho Supreme Court affirms in part holding that both the life estate and the remainder interest were estate assets subject to Medicaid recovery. The court determines that Mr. Peterson’s life estate interest in the property was transferred to his daughter when he died, and under state law “when assets of a Medicaid recipient are conveyed to a survivor, heir or assign by the termination of a ‘life estate,’ the assets remain part of the recipient’s ‘estate'” for purposes of Medicaid recovery. In addition, the court rules that the remainder interest Mr. Peterson’s daughter received is also part of Mr. Peterson’s estate as an “other arrangement.”
For the full text of this decision, go to: http://www.isc.idaho.gov/opinions/40615.pdf
The above article is an example of why you need to understand the full spectrum of Medicaid Planning options. For more information on how we can help you protect your assets for feel free to call me at 212-268-8200 or email medicaid@RaphanLaw.com