ASK QUESTIONS. Estate Recovery INTERRUPT FREELY. The Basics 12/8/2016

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1 Estate Recovery Anna Connelly and Kelly J. Willyard Assistant Attorneys General Financial Services Division ASK QUESTIONS INTERRUPT FREELY The Basics MO HealthNet Division Estate Recovery Program Why does the State seek to recover? 1

2 Because. Shared program with the federal government States are required to have a Medicaid estate recovery plan Omnibus Budget Reconciliation Act of U.S.C. 1396p Liens, adjustments, and recoveries, and transfers of assets Keeping in mind the big picture Section , RSMo Recovery of public assistance funds from recipient s estate, when authorized procedure--exceptions 1. Upon the death of a person, who has been a participant of aid, assistance, care, services, or who has had moneys expended on his behalf by the department of health and senior services, department of social services, or the department of mental health, or by a county commission, the total amount paid to the decedent or expended upon his behalf after January 1, 1978, shall be a debt due the state or county, as the case may be, from the estate of the decedent. The debt shall be collected as provided by the probate code of Missouri, chapters 472, 473, 474 and 475. MO HealthNet Division and the AGO MHD may choose to handle certain matters directly Other matters will be referred to the AGO for representation AGO: Jefferson City, Kansas City, St. Louis, Springfield, and Cape Girardeau 2

3 Open Estates The Process What about instances dispensing with administration? i. Refusals of Letters , RSMo ii. Small Estate Affidavits , RSMo Dept. of Social Services. v. Brundage, 85 S.W.3d 43 (Mo. Ct. App. 2002) Review to determine whether the State will ask the probate court to open an estate When we request the opening of an estate: , RSMo Timeframe State is an interested party as a creditor of the estate What the State files Personal Representative(s) When filed timing The State s Claim State is not bound by the filing requirements expressed in and , RSMo Estate of Thomas, 743 S.W.2d 74 (Mo. 1988) Estate of Cahill, 131 S.W.3d 859 (Mo. Ct. App. 2004) Supported and accompanied by the billing statement Classification of the State s claim , RSMo 3

4 Section All claims and statutory allowances against the estate of a decedent shall be divided into the following classes: (1) Costs; (2) Expenses of administration; (3) Exempt property, family and homestead allowances; (4) Funeral expenses; (5) Debts and taxes due the United States of America; (6) Expenses of the last sickness, wages of servants, claims for medicine and medical attendance during the last sickness, and the reasonable cost of a tombstone; (7) Debts and taxes due the state of Missouri, any county, or any political subdivision of the state of Missouri; (8) Judgments rendered against the decedent in his lifetime and judgments rendered upon attachments levied upon property of decedent during his lifetime; (9) All other claims not barred by section Will have a Consent to Claim attached PR may consent, or set claim for hearing Claim Hearings , RSMo Wright v. Dept. of Social Services, 344 S.W.3d 743 (Mo. Ct. App. 2011); Estate of Nelson, 363 S.W.3d 423 (Mo. Ct. App. 2012) At minimum, may require 6 to 8 weeks to request and receive additional supporting documentation The earlier we know that a hearing will be necessary, the better Exempt Surviving Spouse (unless deceased) Surviving child that is disabled, blind, or under 21 Under 55 (unless in nursing home) Tenancy by the entirety Costs of Collection > Recovery 42 U.S.C. 1396p(b); Section , RSMo; Estate of Bruce, 260 S.W.3d 398 (Mo. Ct. App. 2008); Estate of Shuh, 248 S.W.3d 82 (Mo. Ct. App. 2008) 4

5 We need PROOF Objective documentation meeting the standard for exemption required to close file ASSETS Car $$$ Car Estate House House Estate $$$ What assets are subject to estate recovery? 5

6 Beneficiary deeds, revocable trusts, TOD s Partnerships, LLC s Life estates with power to sell JTWROS Other transfers of decedent s property subject to satisfaction of decedent s debts immediately prior to death Section , RSMo; Estate of Hayden, 258 S.W.3d 505 (Mo. Ct. App. 2008) Mechanisms for Asset Recovery Pay State s claim Deed property into estate Petition for Accounting Discovery of Assets Fraudulent Transfers Sections , , , , and et seq., RSMo; Estate of Macormic, 244 S.W.3d 254 (Mo. Ct. App. 2008) Section Account for pro-rata share of value received 16 months demand letter to PR 18 months file action for accounting Value at the time of transfer Remedy is a monetary judgment Section , RSMo; Estate of Merriott v. Merriott, 439 S.W.3d 259 (Mo. Ct. App. 2014); Estate of Hayden, 258 S.W.3d 505 (Mo. Ct. App. 2008); Estate of Macormic, 244 S.W.3d 254 (Mo. Ct. App. 2008). 6

7 Valuation Value at time of transfer Discovery Appraisals Assessor s value Sale price Estate of Merriott v. Merriott, 439 S.W.3d 259 (Mo. Ct. App. 2014) Fraudulent Transfers Transfer by decedent on Medicaid w/o reporting transfer Transfer by POA Transfer to family or close connection for less than FMV Transfer within one year of death Transfer with specific intention to avoid estate recovery Sections et seq. and , RSMo Trusts Section revocable or amendable trusts Actions typically filed against distributees and possibly the trustee Other types of litigation possible 7

8 Can the State settle estate recovery claims? No. Case Studies 8

9 Contact Information Anna Connelly Kelly Willyard Assistant Attorney General Assistant Attorney General AGO main telephone numbers: Jeff: KC: Cape: Springfield: STL: (FSD) 9

Estate Procedures for

AOC-E-850, July 2014 Estate Procedures for Executors, Administrators, Collectors By Affidavit, and Summary Administration IMPORTANT NOTES The Clerk of Superior Court in all 100 counties serves as the judge