Minnesota Medical Assistance Recovery – Life Estates

Minnesota Medical Assistance Recovery – Life Estates

M.S. Section 256B.15, Subd. 1

M.S. Section 256B.15, Subd. 1 identifies that if a Minnesota life estate was created on or after August 1, 2003, the life estate will not disappear upon the death of the life tenants if the life tenant was receiving Minnesota Medical Assistance benefits at the time of death;

M.S. Section 256B.15 CLAIMS AGAINST ESTATES.
Subdivision 1.   Policy and applicability.
(a)     It is the policy of this state that individuals or couples, either or both of whom participate in the medical assistance program, use their own assets to pay their share of the cost of their care during or after their enrollment in the program according to applicable federal law and the laws of this state.
The following provisions apply: . . .
          (5)     a deceased recipient’s life estate and joint tenancy interests continued under this section shall be owned by the remainderpersons or surviving joint tenants as their interests may appear on the date of the recipient’s death. They shall not be merged into the remainder interest or the interests of the surviving joint tenants by reason of ownership. They shall be subject to the provisions of this section. Any conveyance, transfer, sale, assignment, or encumbrance by a remainderperson, a surviving joint tenant, or their heirs, successors, and assigns shall be deemed to include all of their interest in the deceased recipient’s life estate or joint tenancy interest continued under this section; and . . .
(d)     All provisions in this subdivision, and subdivisions 1d, 1f, 1g, 1h, 1i, and 1j, related to the continuation of a recipient’s life estate or joint tenancy interests in real property after the recipient’s death for the purpose of recovering medical assistance, are effective only for life estates and joint tenancy interests established on or after August 1, 2003. For purposes of this paragraph, medical assistance does not include alternative care.

Instead of disappearing at death, which was the result under the common law, the life estate will not merge into the remainder interest, and the value of the life estate at the time of the life tenant’s death will continue to be subject to recovery of Minnesota medical assistance benefits paid on behalf of the decedent.

Minnesota attorney Julian Zweber has coined the term “zombie life estates” to refer to such surviving Minnesota life estates.

Minnesota Medical Assistance Liens – Life Estates

The Minnesota Department of Human Services can obtain a Medical Assistance recovery lien against the Minnesota remainder interest in order to secure payment of its claim.

If a person owns a Minnesota life estate in real property when he or she dies, and the interest was established on or after August 1, 2003, that interest remains subject to the Medical Assistance recovery lien after death in order to satisfy the repayment of medical assistance benefits received by the life tenant for payment of the cost of nursing home care.

Recovery of Minnesota Medical Assistance benefits paid with respect to a Minnesota life estate owner is limited to the value of the person’s interest on the date of death as determined by the Life Estates Mortality Table found in the Eligibility Policy Manual for Minnesota Health Care Programs.

http://www.dhs.state.mn.us/main/idcplg?IdcService=GET_DYNAMIC_CONVERSION&RevisionSelectionMethod=LatestReleased&dDocName=SRU-030601

Disregarded Medical Assistance Liens Against Minnesota Life Estates

The effect of a medical assistance lien against the former life estate of a deceased life tenant depends upon when the life estate was created.

If the interest was created before August 1, 2003, any medical assistance lien and a notice of potential claim may be disregarded after the death of the life tenant.

However, if the life estate was created on or after August 1, 2003, the decedent’s interest continues after his or her death, and will be encumbered by the medical assistance lien.

Similarly, a notice of potential claim recorded against a Minnesota life estate created on or after August 1, 2003, becomes a lien against that interest upon the death of the life tenant.

Clearance of Minnesota Medical Assistance Liens

A Minnesota medical assistance lien may be cleared by obtaining and recording:

a satisfaction of the lien, or
a release of the property from the lien.

A satisfaction or release of a Minnesota medical assistance lien can be obtained from the Minnesota Department of Human Services Special Recovery Unit for the County in which the decedent resided.

Conclusion: