Medicaid Recovery Limited to Recipient's Fractional Interest in Joint Tenancy

An interesting decision from North Dakota's highest court ruling that the state's recovery is limited to a deceased Medicaid recipient's fractional interest in a joint tenancy and the state cannot recover the entire proceeds from the sale of the property. In re Estate of Krueger (N.D., No. 20180237, Feb. 21, 2019).

Lorraine and Frederick Krueger owned a home as joint tenants. Lorraine Krueger received Medicaid benefits for several years that continued until her death. When Mr. Krueger died, his estate received $75,391.50 in proceeds from the sale of the house.

The state filed a claim against Mr. Krueger's estate to recover 100 percent of the proceeds of the sale to apply to paying back Medicaid for Ms. Krueger's care. The trial court granted the state's claim, and the estate appealed, arguing that the state should only be able to recover 50 percent of the proceeds from the sale.

The North Dakota Supreme Court reverses, holding that the state is entitled to recover only 50 percent of the proceeds from the sale of the home. The court concludes that a reasonable interpretation of federal estate recovery law, which provides that the state can recover property the decedent had an interest in "to the extent of such interest" is that the state's "recovery from a deceased Medicaid recipient's joint tenancy property is limited to the deceased recipient's fractional interest in the property."

Hopefully, this sets an importance precedence limiting state Medicaid recovery claims. For more information about Medicaid planning, contact Erika.

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