Idaho Court Rules State May Not Recover From Estate of Nursing Home Resident's Spouse

An Idaho district court rules that the state may not, as it has been doing for more than a decade, assert estate recovery claims against assets a Medicaid recipient has transferred to a spouse prior to the recipient's own death. In the Matter of George D. Perry (Idaho Dist. Ct., 4th Dist., No. CVIE0905214, March 10, 2010).

After nursing home resident, Martha Perry's husband died in 2009, the state of Idaho filed a claim against Mr. Perry's estate seeking recovery of more than $100,000 in Medicaid benefits it has so far paid on Mrs. Perry's behalf. The only significant asset in Mr. Perry's estate was the proceeds from the sale of the marital residence which had been quitclaimed to him alone during marriage. The state asserted that, because Mrs. Perry previously had an interest in the home during the marriage, the state could recover an amount equal to her ownership interest from the proceeds of the sale of the home. The estate's personal representative countered that the state was entitled only to recover an amount equal to Mrs. Perry's interest in the home at the time of her death. Because Mrs. Perry is still alive, the personal representative denied the state could recover any amount.

The magistrate division of Idaho's fourth judicial district court finds that the federal statutory definition of "estate" does not include Mrs. Perry's inter vivos transfer of her interest in the residence, and rules that the state may not recover against the sale proceeds because Mrs. Perry did not have an interest in them. The court rejects the interpretation adopted by the North Dakota Supreme Court in Estate of Wirtz as "awkward," opting instead to follow the "more reasonable interpretation" enunciated by Minnesota's Supreme Court in Estate of Barg.

The personal representative of Mr. Perry's estate was represented by ElderLawAnswers member attorney Peter C. Sisson of Sisson and Sisson in Boise, Idaho, who brought the case to our attention. Attorney Sisson noted that because the decision was at the magistrate level, it is not clear whether Idaho's Department of Health and Welfare would appeal the decision.

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