IN COURT OF APPEALS
In re the Estate of:
Francis E. Barg, a/k/a Francis Edward Barg.
Filed October 17, 2006
Reversed and remanded
Mille Lacs County District Court
File No. PX-04-0701
Janice S. Kolb, Mille Lacs County Attorney, Dawn R. Nyhus, Assistant County Attorney, Courthouse Square, 525 Second Street Southeast, Milaca, MN 56353 (for appellant Mille Lacs County)
Thomas J. Meinz,
Mike Hatch, Attorney General,
Robin Vue-Benson, Assistant Attorney General, 900 Bremer Tower,
Considered and decided by Lansing, Presiding Judge; Klaphake, Judge; and Parker, Judge.*
S Y L L A B U S
O P I N I O N
In this appeal from an order for
partial recovery of medical benefits paid to Dolores Barg, the estate of
Francis Barg challenges the district court’s interpretation of Minnesota’s
estate-recovery statute, Minn. Stat. § 256B.15 (2004). Because we conclude that the determination of
the deceased recipient’s interest in transferred joint-tenancy property must be
based on principles of real-property law as modified by specific provisions of
the estate-recovery statute, we reverse and remand for recalculation of
F A C T S
Dolores and Francis Barg married in 1948. In 1962 and 1967 they acquired title to real property that they held in joint tenancy. In 2001 Dolores Barg’s health declined, and she eventually required out-of-home nursing care. To pay for her medical care, she applied for long-term Medicaid benefits. After participating in an asset assessment, Dolores Barg transferred her interest in the jointly held property to Francis Barg. At the time of the transfer, the assessed value of the property was $120,800.
Barg died in 2004. Between 2001 and
2004, Dolores Barg received a total of $108,413.53 in medical-assistance benefits
through the Medicaid program. Five
months after Delores Barg’s death, Francis Barg died, and his will was admitted
At the hearing on the petition, the county contended that it was entitled to full recovery of its claim because the value of the real property exceeded the value of the claim and, as marital property, Dolores Barg was entitled to an undivided interest in its full value. The estate contended that the court should, instead, apply a probate-law analysis that would limit Dolores Barg’s interest in the property to a life estate, with a value of $63,880.
Applying probate-law principles, the district court determined that Dolores Barg had a life-estate interest in the property and that the county could not recover the additional $44,533.53. The county appeals from this determination, and the Minnesota Department of Human Services has filed an amicus brief in support of the county’s position.
I S S U E
Did the district court err by applying, for
A N A L Y S I S
the district court,
is a cooperative program between states and the federal government in which the
federal government provides financial assistance to participating states. Martin
ex rel. Hoff v. City of
Medicaid, a person who is unable to pay the cost of long-term medical care may
qualify for medical-assistance benefits.
See Women of State of Minn. by Doe
v. Gomez, 542 N.W.2d 17, 21 (
the spousal anti-impoverishment measures provide an exemption for a primary residence,
this property is typically an asset that is subject to estate-recovery
procedures. In re Estate of Gullberg, 652 N.W.2d 709, 714 (
purposes of recovery, federal law defines an individual’s estate as “all real
and personal property and other assets included within the individual’s estate,
as defined for purposes of [s]tate probate law.”
Gullberg, 652 N.W.2d at 714, this
court determined that
Prior to Gullberg, the state could recover up to the full value of assets that could be traced back to marital or jointly owned property. See Minn. Stat. § 256B.15, subd. 2. After Gullberg, the state’s ability to recover was limited to the recipient’s interest in marital or jointly owned property at the time of the recipient’s death. Gullberg, 652 N.W.2d at 714. Thus, the state’s recovery depends on a determination of the recipient’s interest in the specified assets at the time of death.
The county and the estate argue that Gullberg restricts the definition of the value of the recipient’s interest in the estate of the surviving spouse to either probate-law or marital-property-law principles. The county contends that marital-property-law principles should be applied because the estate-recovery statute specifically refers to marital property. The estate counters that a recipient’s interest is more appropriately determined by reference to probate law. We conclude that both the county and the estate read too much into Gullberg’s passing references to marital and probate law.
Gullberg’s holding was limited to the
narrow issue of preemption.
therefore reject the parties’ competing arguments that Gullberg must be read to require either a probate-law analysis or a
marital-property-law analysis when calculating a medical-assistance recipient’s
interest under the estate-recovery laws.
We are not persuaded that either analysis applies, particularly in this
case. Analysis under marital-property
law would require us to read into the estate-recovery statute a definition from
Minn. Stat. § 518.54 (2004), which explicitly restricts its definitions to
the context of marital dissolution, and provides that marital property “means
property . . . acquired by the parties, or either of them,
to a dissolution, legal separation, or annulment proceeding.”
We are similarly unable to find a legal basis for imposing a probate-law analysis, which would require the court to apply a retrospective structuring of the medical-assistance recipient’s interest in the surviving spouse’s estate. This method, which was proposed by the estate and accepted by the district court, results in a life-estate interest that is based on an artificial assumption that the surviving spouse predeceased the recipient instead of the converse. In this case, Francis Barg did not include a provision for his deceased wife and left his interest in his homestead to his children. Under probate-law principles, the court would have to assume that Dolores Barg survived her husband and received a life-estate interest in his property as his surviving spouse.
probate-law analysis would also conflict with the estate-recovery laws, which
require courts to calculate the recipient’s interest at the time of the
recipient’s death rather than on the future date of the spouse’s death. The 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
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”).
Gullberg, the relevant statutes, and the
principles of property law to the stipulated facts, we start from the elemental
threshold that Dolores Barg had a joint-tenancy interest in the property that is
now in Francis Barg’s estate and that her interest was acquired during their
marriage. 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
Finally, the Minnesota Department of Human Services filed an amicus brief in this case, supporting the county’s position and urging reversal of the district court’s decision. The department advances two independent arguments for reversal. First it asserts that Gullberg’s discussion of the preemptive effect of the phrase “to the extent of such interest” is dictum and should not be applied. We disagree. The Gullberg court did not exceed the scope of review on the preemption issue by relying on a full-text analysis of the federal act. The language of the opinion and the stated issue in the case establish that Gullberg squarely addresses preemption and reaches a conclusion on this issue, which became the holding of the case. Gullberg, 652 N.W.2d at 712, 714.
Second, the department urges this court to reverse Gullberg based on the department’s “more complete discussion” of the preemption issue in its amicus brief. The amicus brief provides a thoughtful and comprehensive analysis of the preemption question. But that issue was decided in Gullberg, and nothing in Gullberg’s analysis suggests that the court did not consider the full spectrum of applicable law and competing policy considerations in its determination of the preemption issue. We therefore decline to reverse Gullberg.
D E C I S I O N
For purposes of obtaining
Reversed and remanded.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.