A Tennessee appeals court rules that the
state may not recover Medicaid payments from the estate of a community
spouse who received assets from an institutionalized spouse who
predeceased him, leaving no estate.In Re: The Estate of James Clifford Smith (Tenn. Ct. App.)

Mary Smith was admitted to a nursing
facility in 2001. The following year, the county Department of Human
Services approved Mrs. Smith for Medicaid benefits to help pay for her
institutionalization. After being approved for benefits, Mrs. Smith
transferred all of her assets to her husband, James. She left no estate
upon her death in September 2003. Mr. Smith died three months after his
wife, and the state filed a claim against his estate for recovery of
$34,262.54 in Medicaid payments for Mrs. Smith’s care. The trial court
ruled in favor of the state, and the estate appealed.

The Tennessee Court of Appeals reversed.
The court noted that under Medicaid law, the state may recover
correctly paid Medicaid payments from a surviving spouse’s estate only
if the recipient of those payments left an estate herself when she
died. The court rejected the state’s contention that since Mrs. Smith
once had an interest in assets comprising Mr. Smith’s estate, the state
could, under federal law, "follow" those assets that she transferred
directly to her husband’s estate.

Congratulations to Tennessee Elder Law Attorneys Tim Takacs and David McGuffey.