Court Reverses Grants of Protective Orders to Nursing Home Residents Who Transferred Their Assets to Their Wives

A Michigan appeals court reverses a probate court’s decision to grant protective orders to two nursing home residents who transferred their income and assets to their wives because the probate court considered the residents’ potential Medicaid eligibility before eligibility determinations were made. In Re Estate of Schroeder (Mich. Ct. App., Nos. 351011 and 351012, Dec. 17, 2020).

Keith Schroeder and James Almy were nursing home residents. Their families petitioned the court for protective orders, arguing that the men were unable to manage their affairs. The court granted the protective orders and transferred Mr. Schroeder’s and Mr. Almy’s assets to their wives. In making the determinations, the court considered Mr. Schroeder’s and Mr. Almy’s potential Medicaid eligibility. After the protective orders were granted, the men applied for Medicaid.

The state appealed the protective orders, arguing that the court should have considered Mr. Schroeder’s and Mr. Almy’s needs in terms of their being responsible for their long-term care and costs instead of maintaining their wives’ lifestyles.

The Michigan Court of Appeals reverses the protective orders, holding that the probate court improperly considered “needs in the context of Medicaid-related circumstances even though Mr. Schroeder and Mr. Almy were not receiving Medicaid benefits and were awaiting Medicaid eligibility determinations.” The court remands and orders the probate court to “consider the circumstances as they actually exist.”

For the full text of this decision, go to: http://publicdocs.courts.mi.gov/OPINIONS/FINAL/COA/20201217_C351011_39_351011.OPN.PDF

On the same day, the Michigan Court of Appeals also reversed a protective order in a similar case, holding that the probate court did not properly consider the husband’s needs before leaving him without income or assets. Morley v. Department of Health and Human Services (Mich. Ct. App., No. 350535, Dec. 17, 2020).

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