Medicaid May Recover Wife’s Interest in Retirement Community Refund From Husband’s Estate

An Ohio appeals court rules that the state may recover Medicaid benefits from a Medicaid recipient’s interest in a retirement community refund that became a part of her husband’s estate after they both died. Ohio Dept. of Medicaid v. French (Ohio Ct. App., 2nd Dist., No. 2020-Ohio-2744, May 1, 2020).

Lessel and Harry Ward paid a fee to reserve a spot in a retirement community. The unspent portion of the fee was refundable when both residents died. Ms. Ward received Medicaid benefits until her death. Mr. Ward died one month after Ms. Ward, and Mr. Ward’s estate received a refund from the retirement community. Ohio filed a claim against Mr. Ward’s estate to recover Medicaid benefits paid on behalf of Ms. Ward. The state argued it was entitled to Ms. Ward’s one-half interest in the refunded deposit.

The estate refused the claim, and the state appealed. Mr. Ward’s estate argued that Ms. Ward did not have an interest in the refund before her death. Ohio law only permits the state to recover from non-probate assets that the deceased Medicaid recipient had an interest in during his or her life. The trial court ruled that the refund was an asset of the recoverable estate of Ms. Ward, and the estate appealed.

The Ohio Court of Appeals, Second District, affirms, holding that the state may recover Ms. Ward’s interest in the refund. According to the court, Ms. Ward’s “interest was not extinguished by her death, and half of the [retirement community’s] refund was a non-probate asset in which [Ms. Ward] had a legal interest when she died; that interest was conveyed to [Mr. Ward] and subject to recovery from his estate.”

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