Posts Tagged ‘estate recovery’

Iowa Allows Medicaid Recovery Against Joint Tenancy Property

APRIL 10, 2006  VOLUME 13, NUMBER 41

As many states have become more aggressive about recovering the costs of Medicaid care from the estates of deceased beneficiaries, one issue has appeared to be insoluble. Federal law permits states to make a claim against property held in joint tenancy at the time of a Medicaid recipient’s death. Property law principles in place for centuries, however, make it clear that a deceased joint tenant has no interest in the property. A recent case from the Iowa Supreme Court unsettles that long-standing concept.

Mary Serovy, a widow living in the family home where she and her late husband had raised their children, found that she could no longer get along on her own. She made a deal with her son and daughter-in-law; the younger couple would pay to build an addition on the house where they could live, and Ms. Serovy would transfer the property into joint tenancy with them. That way, all three of them figured, Ms. Serovy would have some help to allow her to stay at home, and the property would transfer to her son and daughter-in-law automatically at death.

The multi-generational arrangement worked well for almost a decade, but eventually Ms. Serovy could not stay at home any longer. She moved into a nursing home and, since she owned practically no assets other than her home, she quickly became eligible for Medicaid assistance. When she died less than a year later, in 1998, the Iowa Medicaid agency had paid $28,707.54 toward her care. Since her only asset—the house—transferred automatically on her death, no probate proceeding was required.

Five years later, the Medicaid agency decided it was time to make its claim against Ms. Serovy’s estate. It petitioned for appointment of an executor and asserted its right to sell the home and recover up to one-third of the proceeds. The probate court agreed with the agency, and ordered the home sold.

The Iowa Supreme Court reversed the sale order, but approved the claim against Ms. Serovy’s home. According to the justices, Iowa state law permits its Medicaid agency to assert a claim against joint tenancy property. If that authority is meaningless because a joint tenant’s interest is extinguished at death, then the Iowa statute would be meaningless. Since the courts assume that legislatures would not pass meaningless laws, the Iowa statute must mean that the state can claim the interest Ms. Serovy had just before her death.

Ms. Serovy’s son and daughter-in-law also made another argument. They insisted that the Iowa law should be ruled invalid because it would impair the contract entered into between them and Ms. Serovy. Not so, said the court—the contract only required Ms. Serovy to transfer the home into joint tenancy, and she had accomplished her part of that agreement even before the law went into effect. Nothing in her agreement with the younger couple required her to ensure that they receive the house outright at her death.

The probate court did err by ordering the sale of the property too quickly, however. The Supreme Court justices agreed that the Medicaid agency can take Ms. Serovy’s one-third interest in the property, but it must file a separate action to force sale of the home to satisfy its claim. Estate of Serovy, March 24, 2006.

Although this may be the first instance in which a state statute authorizing Medicaid recovery against joint tenancy property has been approved by any state’s highest court, it raises more questions than it answers. Why didn’t Ms. Serovy’s son and daughter-in-law qualify to receive the house outright under the federal provision permitting transfers of homes to a child who lives with the Medicaid recipient for two years prior to entry into the nursing home, and provides care that delays nursing home placement? Doesn’t Iowa’s hardship provision (mandated by federal law) afford Ms. Serovy’s son and daughter-in-law an opportunity to argue that sale of the residence would effectively throw them out of their own home? Why isn’t the state’s claim barred for its failure to pursue the matter for five years after Ms. Serovy’s death? All of these arguments may have been made in her case, but the Iowa Supreme Court holding does not address them.

State Must Formally Adopt Its Medicaid Estate Recovery Rules


In our American system of government the legislature is in charge of making law and policy, and the administrative branch’s job is to interpret and implement those laws without imposing the bureaucrats’ own ideas on the legislature’s programs. That ideal conception, however, runs afoul of the reality of government. Because it is simply impossible to anticipate every variation of a problem, much of the actual administration looks like, and is, legislative in nature.

To keep the making and implementation of administrative policies as public and responsive as possible, most states have adopted laws requiring agencies to publish their planned regulations, submit them to public comment, and consider input from citizens. The law compelling these practices is usually called the Administrative Procedures Act (APA) or some similar name. Arizona has such a law, as does California.

Medi-Cal, California’s version of Medicaid, includes a provision requiring its administrative agency to seek reimbursement for Medi-Cal payments from the estates of at least some deceased Medi-Cal recipients. California law defines “estate” to include the deceased beneficiary’s probate estate, as is true in Arizona and every other state. But California goes further, and permits its estate recovery program to pursue any property that belonged to the deceased beneficiary at the time of death, including property held in joint tenancy or “other arrangement.” The problem: “other arrangement” is not defined in the California law.

Medi-Cal administrators decided that the law should apply to annuities and life estates in at least some circumstances. It first pursued, then decided not to pursue, annuities. In the case of life estate property, Medi-Cal decided to seek recovery if the Medi-Cal beneficiary had once owned the property and transferred it to another person, reserving both a life estate (that is, the right to live on the property for life) and a right to sell the property and retain the proceeds. Neither decision was made as part of a public rule-making process.

A non-profit group, California Advocates for Nursing Home Reform (CANHR) sued to force Medi-Cal to properly publish and adopt its rules. The State objected, and a trial judge dismissed CANHR’s complaint.

The California Court of Appeals has now reversed that decision, finding that there is at least some evidence of improper rule-making. CANHR will now be given a chance in court to prove its allegation that Medi-Cal relies on “underground guidelines and criteria” in pursuing estate recovery. CANHR v. Bonta, January 8, 2003.

Claim Against Estate Offset By Tobacco Company Litigation


Beginning in the mid-1990s many states filed litigation against major tobacco companies (or joined existing litigation) seeking reimbursement for the some of the costs of treating smokers. After those lawsuits resulted in recovery of $1.3 billion for the states, a number of smokers (and the families of deceased smokers) filed court actions seeking a share of the settlement money. Those claims have been universally rebuffed—until the family of Geraldine Raduazo came up with an argument that persuaded the New Hampshire Supreme Court that her estate should benefit from the tobacco litigation.

Ms. Raduazo, a lifelong smoker, had developed a number of medical problems relating to her smoking habit. She required extensive medical treatment, and she could not pay for all of it. Like other indigent patients in need of medical care, Ms. Raduazo applied for and received coverage through the Medicaid program. By the time of her death in 1997 she had received $169,765.16 in benefits from Medicaid.

Federal law requires every state to have a mechanism for seeking recovery from the estates of deceased Medicaid recipients, and so the New Hampshire program initiated a recovery action against Ms. Raduazo’s home—the only asset she left in her estate. Because the home was valued at about $60,000 the state’s claim would completely consume the proceeds from its sale, leaving nothing for her family.

Ms. Raduazo’s estate argued that New Hampshire’s share of the tobacco litigation settlement was based at least partly on the claims of smokers like Ms. Raduazo. In effect, argued the estate, New Hampshire had already taken her most valuable property—her claim against the tobacco companies—in satisfaction of any right it might have to recover the cost of medical care from her or her estate. Ms. Raduazo’s estate and heirs might not be entitled to any money from the tobacco settlement itself, the estate reasoned, but the state should not be allowed to also take her home to satisfy the debt.

The probate court sided with the state and dismissed the estate’s claim, but the New Hampshire Supreme Court reversed that decision. The final resolution is not yet known, because the higher court directed that the probate court conduct further proceedings. The probate judge must now consider how much of Ms. Raduazo’s illness was related to smoking, what portion of the settlement should be attributed to her claim, and other items as directed by the state’s highest court. Estate of Raduazo, December 18, 2002.

Questions and Answers About Arizona’s “Beneficiary Deed”

MAY 7, 2001 VOLUME 8, NUMBER 45

Last week Elder Law Issues reported on Arizona’s new “Beneficiary Deed” statute. A law passed by the Arizona legislature this year creates a new, simpler way to pass title to real property, without any requirement of probate and avoiding the cost of establishing a living trust.

A number of readers had questions about the new deed form. Questions included:

When can I sign a beneficiary deed?

Most laws take effect 90 days after the legislature adjourns. Adjournment is now scheduled for Thursday, May 10. If the legislature actually adjourns that day, the new law will be effective (and beneficiary deeds will become an available choice) on August 3, 2001.

Will the recipients under a beneficiary deed receive the benefit of stepped-up basis for income taxes?

Yes. To explain: when you inherit property from another, you usually do not have to pay income taxes on the increase in value of that property during the prior owner’s life. For purposes of calculating the income tax on capital gains, your “basis” in the property is said to have been “stepped up” to its value on the date of death of the person who left it to you. Beneficiary deeds will reach the same result.

How will beneficiary deeds affect ALTCS (Medicaid) recovery rights?

ALTCS is Arizona’s long-term care Medicaid program. When it provides benefits, the program has a claim against the recipient’s estate. Under current law that claim can only be collected in a probate proceeding. Since the beneficiary deed will avoid the probate process, ALTCS’ claim will not be levied against the property. This makes beneficiary deeds particularly attractive to ALTCS recipients and their families.

It is worth noting that a different law passed by the legislature this year may undo some of this benefit. “Non-probate transfers” (including beneficiary deeds, living trusts and joint tenancy bank accounts, but not real estate held as joint tenants) may now be challenged by creditors, including ALTCS.

Why would anyone want to create a living trust now?

Beneficiary deeds will be a valuable new estate planning tool, but will not replace other options. Perhaps most importantly, a beneficiary deed will not help a married couple take advantage of the maximum estate tax exemption if their combined estates exceed the taxable level (currently $675,000).

Trusts remain a more effective way to control property after death (for a disabled or spendthrift child, for example). Trusts can be used for real property outside Arizona. Another advantage for trusts: a single amendment can change your entire estate plan, rather than requiring new deeds and beneficiary designation changes on each individual asset.

For those who already have established living trusts, the beneficiary deed probably represents a step backward. For those now considering their options for the first time the beneficiary deed may be an attractive, low-cost choice for estate planning.

Medicaid Recovery Claimed Even After Death of Spouse


About half the cost of all nursing home care in this country is paid by the federal-state Medicaid program. The program is available to individuals who have reduced their assets below $2,000 (not counting homes, autos and a handful of other exempt assets). When the nursing home resident is married, he or she may qualify for Medicaid even though the spouse still living at home has assets; the “community spouse” may be permitted to retain as much as $81,960 (in 1999) in liquid assets.

Another difference between single and married Medicaid recipients becomes important on the death of the recipient. If a person is receiving Medicaid benefits at the time of death, the state Medicaid agency will have a claim against his or her estate for the cost of those benefits. It has long been federal law, however, that if the recipient’s spouse survives Medicaid may not make a claim for recovery. Two recent cases, in North Dakota and Idaho, raise the possibility that such claims may be made after the later death of the spouse.

When Nathaniel Thompson went into a nursing home in North Dakota, his care was paid for by Medicaid. His wife Victoria was permitted to retain some assets, and the program contributed $58,237.30 to his care during his two-year stay.

Nathaniel Thompson died in 1992. Since his wife survived him, the Medicaid agency could not make any claim against his estate. When Victoria Thompson died three years later, however, the state made a claim against her estate. Since she left only $46,507.98, the state’s claim essentially sought her entire estate.

Victoria Thompson’s Personal Representative objected, citing the federal law which prohibits estate recovery when a Medicaid recipient leaves a surviving spouse. The agency successfully argued that North Dakota law permitted the claim, and that the federal law did not override North Dakota’s statute.

On appeal, the North Dakota Supreme Court agreed with the state agency. Mrs. Thompson’s estate was required to pay the claim for her husband’s care, at least to the extent of any assets which she had received from him “through joint tenancy, tenancy in common … or other arrangement.” Estate of Thompson, December 22, 1998.

Lionel and Hildor Knudson lived in Idaho. When Mrs. Knudson entered a nursing home, their niece (acting as Mrs. Knudson’s conservator and as Mr. Knudson’s agent under a durable power of attorney) divided their assets into two shares; Mrs. Knudson was permitted to retain only her personal effects, a burial account and a small bank account. The Medicaid program then paid for her care for nearly two years, with total payments amounting to $41,600.55.

Mrs. Knudson died in 1994. Although Mr. Knudson did survive her, it was not for long; he died two weeks later. The Idaho Medicaid agency made a claim against Mr. Knudson’s estate for the care provided to his wife.

Although the trial judge disallowed the claim, the Idaho Supreme Court disagreed. Noting that state law permitted the claim, the justices returned the case to the trial court for a determination about what, if any, assets had been acquired as community property after division of the assets by the couple’s niece. The agency would be permitted to make its claim against any such assets. Estate of Knudson, November 2, 1998.

Arizona law provides a very different result. Recognizing the clear language of the federal law, Arizona makes no claim against the estate of a surviving spouse for care provided to the institutionalized spouse. Arizona has not attempted to adopt an estate recovery law like those in North Dakota and Idaho.

Gifts By Medicaid Applicants Are Not The Problem, Study Says


It is (as of January 1) a federal felony for those facing nursing home placement to make gifts for the purpose of becoming eligible for Medicaid (in Arizona, ALTCS) coverage. Much has been written about the ambiguity and unenforceability of the new law. For example, Elder Law Issues, November 25, 1996, and August 19, 1996, focused on the meaning, history and poor drafting of the new enactment.

Now Congress is considering repeal of the two-week old criminalization provision. Congressman Steven La Tourette, a second-term Republican from Ohio, has introduced House Resolution 216, which would strike the new section of Medicaid law before the first prosecution could be threatened. Powerful forces in Washington, including the AARP and other advocacy groups, have lobbied forcefully for the repeal. Indications are that the threat of jail for middle-class seniors will now fade away.

The legislative assumptions underlying the original enactment of this punitive law have remained unchallenged, however. According to some in Congress (and, more importantly, lobbyists for the long-term care insurance industry), the practice of making gifts to qualify for Medicaid is widespread and is costing state and federal governments millions of dollars. Sadly, Congress appears to have bought into this myth without question, and in spite of the actual evidence.

In a study prepared for publication in the periodical Generations, Washington researcher Joshua Wiener of the Urban Institute has analyzed the actual incidence of transfers by seniors. His conclusion: both the numbers of persons making transfers and the amount of money transferred to obtain Medicaid eligibility are much lower than commonly thought.

Wiener notes earlier research which shows that three quarters of nursing home admittees are already impoverished, with less than $50,000 in assets other than their homes. Over half had less than $10,000 of cash available. In other words, the typical nursing home admittee is able to pay for less than six months of nursing home care (and less than two months in many communities, with sharply higher nursing home costs) in any event. It is unrealistic to expect any substantial cost savings for the Medicaid program from further restrictions on transfer rules.

Furthermore, historical data indicates that seniors infrequently give away their assets to become eligible for nursing home assistance. Between 1988 and 1992, Congress substantially liberalized the rules for married couples to become eligible for Medicaid, while simultaneously clarifying the transfer rules. During that time, the portion of nursing home residents covered by Medicaid increased by only two percentage points. Wiener notes that the increase should be almost entirely attributable to the change in married couple rules, suggesting that the number of people making gifts to become eligible must be almost insignificant.

Finally, Wiener notes that the administrative costs attendant on any plan to reduce transfers must be considered. In the case of Congress’ ill-conceived plan to criminalize gifts, for example, the costs of administrative rule-making, prosecution and incarceration might exceed any reduction in Medicaid costs.

On a related issue, Wiener also assesses the effect of new, stronger federal rules on estate recovery. As a practical matter, estate recovery programs rely on Medicaid recipients retaining an interest in their homes throughout their nursing home stay; research suggests that only 14% of Medicaid recipients own their homes at the time of institutionalization, so the possibilities for recovery are not high. In Oregon, the state with the best record of estate recovery, about 2.5% of Medicaid costs are recovered.

Medicaid Estate Recovery Applied to Late-Acquired Assets

JUNE 16, 1996 VOLUME 3, NUMBER 51

Bertha Cripe died in 1989 at the age of 84 in Indiana. At the time of her death, Ms. Cripe’s nursing home care was being paid for by Indiana’s Medicaid long term care program. Indiana’s Medicaid agency filed a claim against her estate in the amount of $90,313 for the last seven years of Medicaid subsidies.

Of course, Ms. Cripe had qualified for Medicaid assistance by showing that she had no assets, so ordinarily the claim for care would have been insignificant. A year before Ms. Cripe’s death, however, a wealthy cousin had died leaving Ms. Cripe a substantial inheritance. Although she had not received a single penny of that inheritance by the time she died, her estate ultimately received $103,712.

Ms. Cripe’s heirs argued that the Medicaid claim should be disallowed, since she had not actually received any money from her cousin’s estate prior to her own death. The Indiana Medicaid agency insisted that the entire claim should be paid, nearly consuming the estate. The Indiana judge decided on an intermediate approach; the Court granted the claim for benefits paid after the death of the cousin, even though no funds were actually received until later.

The Medicaid agency appealed to the Indiana Court of Appeals. After hearing arguments in the case, that court overruled the trial judge’s approach to the question.

Indiana had enacted a law providing for recovery after receipt of an inheritance or other resources. Ms. Cripe’s estate argued that the statute limited the power of the state to pursue recovery of the entire claim. Furthermore, claimed the estate, permitting the Medicaid agency’s claim would generate an unfair windfall for the State. The Court of Appeals did not agree, and instructed the trial court to allow the entire Medicaid claim. Elkhart County Dep’t of Public Welfare v. Estate of Cripe, January 30, 1996.

Ms. Cripe’s story points out the importance of planning for family members receiving public assistance. If Ms. Cripe’s cousin had consulted an attorney, it would have been simple to construct her estate plan to prevent the result, and even to still benefit Ms. Cripe.

New Allowances for Community Spouses

Arizona’s “Minimum Monthly Maintenance Needs Allowance” (known to its friends as MMMNA) will increase next month, to $1,295. The new figure represents an increase of about $40 over last year’s Allowance.

The MMMNA has no effect on eligibility for ALTCS (Arizona’s long term care Medicaid program). Most eligibility figures also change annually, but on January 1 rather than July 1 of each year.

The significance of the MMMNA is in calculation of the share of cost for Medicaid-eligible nursing home patients. Once Medicaid begins to subsidize a nursing home resident’s care, he or she is required to turn over nearly all his or her income (retaining only $70.50 each month for personal needs) to the nursing home.

For married couples the rules are harder. The “community” spouse is entitled to keep all his or her own income (including half of any checks naming the nursing home resident), but must turn over a portion of the income naming the institutionalized spouse each month.

The MMMNA is the minimum amount of income guaranteed to the community spouse. If his or her own income is less than $1,295, he or she keeps enough of the institutionalized spouse’s income to reach that figure. In addition, the minimum level can be increased in some circumstances.

Recent Cases Involving Estate Recovery Issues

JUNE 19, 1995 VOLUME 2, NUMBER 50

Two recent cases from other states illustrate some of the trends in Medicaid financing. In one,Estate of Budney, a Wisconsin Circuit Court case from February, 1995, the state sought to recover Medicaid expenses from the patient’s husband after his death. In the other, Coye v. Hope, a California Court of Appeals case also from February, the state sought to recover Medicaid benefits from the patient’s revocable trust after her death.

Grace Budney received Medicaid benefits prior to her September, 1993, death. Her husband Paul died six months later. Although no estate recovery proceeding was commenced after Grace’s death (all the assets presumably went to Paul), Minnesota’s Department of Health and Human Services made a claim against Paul Budney’s estate for $54,000. DHHS cited a Minnesota statute that appears to permit the recovery. The Circuit Court ruled that federal law controls, and that recovery against spouses’ estates is not permitted. Minnesota’s statute was invalid.

Ed. note: Arizona does not have a similar statute, so the controversy should not arise here. Unless, that is, the Arizona legislature chooses to follow the lead of Minnesota and Oregon, which have adopted such statutes.

In the California case, Myrtle Hope had signed a revocable living trust prior to going into the nursing home. After her death, the California Department of Health Services filed a claim against her trust, noting that the claim would have been permitted if her estate had gone through the probate process. Her trustee objected, pointing out that there were no probate proceedings; that is the nature of trusts.

The Court of Appeals ruled that the state could recover Medicaid benefits from Ms. Hope’s trust. Although there is no clear state statute permitting the action, the Court reads the federal law to permit the action, noting that “the purposes of the act will be better achieved” thereby.

Ed. note: Arizona has expressly defined “estate” for estate recovery purposes to include only the probate estate, so this case should not directly apply. Still, changes may be in the works.

Abandonment of Spouse Leads to Criminal Charges

Wallace Johnson suffered from Parkinson’s disease; his wife provided care in their home. In November of 1993, Mr. Johnson fell in the home and called out for help. Mrs. Johnson first ignored his calls, then punched and kicked her husband and ultimately left the house without summoning help. Mr. Johnson was able to call 911, but died three months later.

Mrs. Johnson was charged with assault and neglect. Her attorney argued that she was not her husband’s guardian, and could not legally “neglect” him. The Iowa Supreme Court disagreed, holding that the law applied whenever one “may be charged with the care and control of another.”

Ed. note: Arizona law already specifically creates a duty of spouses to provide support. A.R.S. §§13-3610 and 13-3611 make it a Class 6 Felony to fail to provide for a spouse’s personal or medical needs.

Recent Court Cases

MAY 15, 1995 VOLUME 2, NUMBER 45

Court decisions from other states may give only indirect guidance on Arizona legal problems. Two recent cases suggest possible concerns for advocates for the elderly.

Nursing Home May Not Exclude Aggressive Patient

Fair Acres Geriatric Center, a county-operated intermediate care nursing home in Pennsylvania, decided it could not admit Margaret Wagner. Ms. Wagner was a demented patient inclined to screaming, agitation and aggressive behavior. Fair Acres decided that Ms. Wagner’s admission would have violated its policy against admitting psychiatric patients.

Ms. Wagner’s attorney argued that the federal Rehabilitation Act of 1973 required Fair Acres to admit her. Since Ms. Wagner was otherwise qualified for admission, Fair Acres’ denial was based on her disability. And since Fair Acres received federal funds, the Rehabilitation Act prohibited the facility from discriminating against Ms. Wagner.

The Federal Court of Appeals upheld the jury verdict requiring Ms. Wagner’s admission. The court specifically found that Fair Acres had failed to show that Ms. Wagner would impose an undue burden on the facility, despite evidence that she was “a challenging and demanding patient.”Wagner v. Fair Acres Geriatric Center, 3rd Circuit Ct. Of Appeals, March 15, 1995.

OBRA Recovery Statute Not Retroactive

Arkansas (like Arizona) adopted a new estate recovery program after the federal OBRA ’93 requirement that states do so. OBRA was effective August 13, 1993; Arkansas’ statute was effective August 15, 1993.

When Helen H. Wood died in October, 1993, the Arkansas Medicaid agency made a claim against her estate for the cost of her care from December, 1991, until her death. Her estate argued that the estate recovery program could not be applied retroactively, and that only the cost of the last two months of her care could be recovered.

Arkansas’ Supreme Court agreed with the estate, finding that the statute created a new legal right and could not be extended back in time. (Arizona has not made any effort to make its estate recovery program retroactive, but this case suggests that any such attempt would fail.) Estate of Wood v. Arkansas Dep’t of Human Services, Arkansas Supreme Court, March 6, 1995.

Recent Court Cases


A number of recent decisions from courts around the country are of interest to advocates, caretakers and service providers to the elderly. Many of the cases will be based on local state law or precedent, and so may not be very persuasive in Arizona. Nonetheless, they may be interesting or thought-provoking.

Who pays for patient’s care? No one.

Beatrice Passmore was admitted to Piedmont Medical Center in South Carolina in April, 1992. When the hospital was ready to discharge her less than a month later, her husband refused to accept responsibility for her. Nursing homes all declined to accept her because she did not qualify for Medicaid. Consequently, Piedmont Medical Center could not discharge her.

The hospital brought an action under South Carolina’s divorce law seeking to compel either her husband or the county Department of Social Services to accept financial responsibility for Mrs. Passmore. The court ruled that third parties (like the hospital) can not bring such an action to compel support. This is true even though Mrs. Passmore could have brought an action for support herself if she had wished to do so. Amisub of South Carolina, Inc., v. Passmore, South Carolina Supreme Court, July 25, 1994.

Disabled child prevents estate recovery

New York’s state statutes prohibit recovery of Medicaid payments from the estate of a recipient who is survived by a disabled child. When Josephine Burstein died, she was survived by two children. One of her daughters was permanently disabled.

Ms. Burstein had not provided any support for her disabled daughter for years, and she did not reside with Ms. Burstein. Ms. Burstein’s will left half of her estate to her disabled daughter and the other half to the second daughter. The state sought to recover from Ms. Burstein’s estate, arguing that the statute meant to preclude recovery where a disabled child was dependent on the decedent.

The New York court disagreed, holding that the law applies whenever the Medicaid recipient has a disabled child, whether or not the child is dependent on the parent. In re Estate of Burstein, New York Surrogate Court, March 21, 1994.

[Arizona law is very similar. ALTCS’ Eligibility Policy and Procedure Manual, §910.2, provides that recovery may not be sought unless the deceased recipient has no surviving spouse and no child under age 21, disabled or blind.]

Oregon court refuses to create “Miller” Trust

Richard Baxter resides in an Oregon nursing home. He is ineligible for Medicaid because he receives about $200 per month more than the Medicaid “income cap.” (Oregon, like Arizona, is an income cap state.) Mr. Baxter filed a petition asking the court to create a “Miller” trust, as permitted by federal law, to permit him to qualify for Medicaid.

Federal law indicates that such a trust may be established by a parent, grandparent, guardian or court. The court in this case refused, holding that Mr. Baxter is mentally competent. Because Mr. Baxter’s parents and grandparents are deceased, he apparently can not qualify for Medicaid. In re Baxter, Oregon Court of Appeals, May 25, 1994.

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