Minnesotans Challenge Retroactivity of Estate Recovery Change

Two sons of a Minnesota Medicaid recipient are suing the state over its attempt to recover from a life estate given seven years before enactment of a law allowing the state to recover against life states.

In 1996, Dwaine and Dwight Marten executed a deed that conveying to their parents, Otto and Lillie Marten, a life estate in the family farm. After receiving the life estate, Mrs. Marten began receiving Medicaid benefits.

In 2003, the Minnesota state legislature expanded the state's estate recovery and medical assistance lien powers to include life estates. The legislature did not limit recovery to life estates given after 2003. Following enactment of the legislation, the Minnesota Department of Human Services imposed a lien against Mrs. Marten's life estate interest in the property. Following Mrs. Marten's death on May 10, 2004, the Department asserted a lien against Dwaine and Dwight's remainder interests. (Mr. Marten had passed away earlier.)

The case is being heard in Ramsey County District Court and the Martens have moved for summary judgment. The Martens are being represented by Long Prairie firm of Randolph T. Brown, P.A., the attorney who wrote the original deed.

"From our point of view it's a taking of vested property," firm attorney Marcus Stubbles told ElderLawAnswers. "A lot of the controversy here is over the standard of review. From our point of view, under the Minnesota constitution a retroactive statute cannot impair vested property rights. From the state's point of view, either under the Minnesota constitution or the federal constitution, it's a rational basis test."

The firm has posted its memoranda in the case on its Web site, www.brownlawcenter.com (click on "Life Estate Lien Litigation").

"We made this publicly available because the best thing that can happen is to have all sorts of these challenges going simultaneously all over the state," said Stubbles,. "because that brings the political pressure to bear on the legislature and maybe they'll get around to repealing it."

Stubbles cited two earlier decisions in other jurisdictions blocking the retroactive application of estate recovery laws: (Estate of Wood (Ark.) and (Estate of Burns (Wa.).