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In re the Estate of: Francis E. Barg, a/k/a Francis Edward Barg, 722 N.W.2d 492; 2006 Minn. App. LEXIS 148 (Ct. App. Minn. October 17, 2006)

The husband died six months after the decedent. The decedent had required nursing home care, and she received Medicaid assistance to pay for the care. The estate’s personal representative allowed $ 63,880 as a claim against the estate but disallowed $ 44,533. The county contended that it was entitled to full recovery because the value of real property transferred to the husband exceeded the value of the claim and, as marital property, the decedent was entitled to an undivided interest in its full value. The estate challenged the district court’s interpretation of Minnesota’s estate-recovery statute, Minn. Stat. § 256B.15 (2004). Under § 256B.15, the interest of a deceased medical benefits recipient in transferred joint-tenancy property that was part of a surviving spouse’s estate was determined by principles of real property law. The county was entitled to a claim against the estate for the decedent’s one-half interest in the joint-tenancy property obtained during the marriage and transferred to the husband.

The appellate court reversed the judgment, and the matter was remanded.

Notes: “The [Minnesota] estate-recovery statute specifically provides that a recipient’s joint-tenancy interests “shall not be merged into the remainder interest or the interests of the surviving joint tenants” and that the joint-tenancy interests shall be subject to the provisions of the statute. Minn. Stat. § 256B.15, subd. 1(5) (2004).” … “In light of the problems with the use of either probate-law or marital-property-law principles,we conclude that the plain meaning of the estate-recovery statute requires us to apply property-law principles as specifically modified by the statute. Applying this analysis, a recipient’s interest in marital property for purposes of estate recovery is limited to that person’s legal interest in the property at the time of death. And, under federal law and Gullberg, this interest includes a conveyance of a joint tenancy to a spouse. See id. § 1396p(b)(4)(B); Gullberg, 652 N.W.2d at 713 (stating that recipient maintains joint-tenancy interest in property even after conveyance to spouse because conveyance constitutes “other arrangement”).” … “Before receiving Medicaid benefits, she conveyed her interest in the property to Francis Barg. For purposes of the estate-recovery statute, Dolores Barg’s estate retained a joint-tenancy interest in the homestead at the time of her death. See Minn. Stat. § 256B.15, subd. 1(3) (providing for modification of common law principles by allowing continuation of medical-benefit recipient’s joint-tenancy interest after recipient’s death). The “extent of her interest” is defined by the joint tenancy. A joint tenant’s interest in property is an undivided one-half interest in the property’s value. Kipp v. Sweno, 683 N.W.2d 259, 260, 263 (Minn. 2004). Because the stipulated facts state that the joint-tenancy property was valued at $ 120,800 at the time of Dolores Barg’s death, the extent of the value of Dolores Barg’s interest at the time of her death was $60,400. We therefore reverse and remand for the district court to recalculate the allowable claim against Francis Barg’s estate.”

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