Justia Public Benefits Opinion Summaries

Draper, age 18, suffered traumatic brain injury in a 2006 car accident. Draper executed a durable power of attorney, authorizing her parents to collect money; compromise claims; and “fund, transfer assets to, and to instruct and advise the trustee of any trust wherein [Draper is] or may be the trustor, or beneficiary.” Draper began receiving Supplemental Security Income payments. In February 2008, father signed a personal-injury settlement. Draper received $429,259.41. Her parents signed documents creating a Special Needs Trust, intended to qualify under 42 U.S.C. 1396p(d)(4)(A), to provide for Draper’s needs without “displac[ing] or supplant[ing] public assistance or other sources of support that may otherwise be available” and transferred $429,259.41. In September 2008, Draper received notice that she had been overpaid $3,000 in SSI benefits because her trust exceeded the SSI-eligibility limit of $2,000, and that her SSI payments would cease. An ALJ found that for the trust to be exempt from consideration as a personal asset, Draper’s parents had to act as third-party creators when establishing it, but instead acted as agents under the power of attorney. Draper’s parents obtained a state court order modifying the trust, which retroactively listed the state court, rather than Draper’s parents, as the settlor. The Appeals Council denied review, finding that the order did not provide a basis for altering the ALJ’s decision. The district court and Eighth Circuit affirmed. View "Draper v. Colvin" on Justia Law

After the U.S. Department of Veterans Affairs determined Evans was no longer competent to manage his veterans’ benefits, it appointed his daughter as the federal fiduciary. The VA later terminated her appointment and appointed the Greenfield Banking Company. Evans’s wife and daughter filed suit asserting breach of fiduciary duty and conversion by the Bank and sought creation of a constructive trust. The complaint alleges that the Bank complied with the terms of its obligations to the VA as federal fiduciary but that doing so meant it breached its fiduciary duty to Evans. The complaint did not claim misuse of funds, mismanagement depriving him of the use of any funds, embezzlement, or the like. The daughter was apparently not fully reimbursed for expenditures she made on behalf of Evans while pursuing a guardianship in state court. Evans died in 2012. The district court dismissed. The Seventh Circuit affirmed, stating that the complaint is really a challenge to a federal fiduciary appointment and to veteran benefits distribution and, as such, not within the court’s jurisdiction. View "Stump v. Greenfield Banking Co," on Justia Law

Melvin Peterson died in 2007. Prior to his death, he owned some residential real property. In 2001, Peterson executed a Gift Deed of his real property to his daughter, Cathie Peterson, retaining for himself a life estate in the property. Shortly thereafter, he applied for Medicaid and began receiving Medicaid benefits in March 2003. At the time of his death, Melvin Peterson had received a total of $171,386.94 in Medicaid benefits. Cathie was appointed personal representative. IDHW filed a timely Claim Against Estate and later an Amended Claim Against Estate in the amount of $171,386.94. Cathie disallowed the claims without stating a reason. In response, IDHW filed a Petition for Allowance of Amended Claim. After a hearing, the court granted IDHW's petition. After receiving no response to its claim against the estate, IDHW filed a Petition to Require Payment of Claim, setting forth its demand for payment of the value of Melvin Peterson's life estate. After a hearing, the magistrate court entered an order requiring payment of IDHW's claim. The Order held that the life estate was an asset of the estate for purposes of Medicaid recovery and ordered the personal representative to add the life estate interest to the estate's inventory and assign it an appropriate value. However, the personal representative instead filed and was granted a motion to hire an appraiser to determine the fee simple value of the residential real property. After the personal representative failed to file an appraisal, IDHW filed various motions relative to the appraisal, sale of the property, and payment of its claim. The magistrate court granted IDHW's motions to compel appraisal, sale of the property, and payment of the Medicaid claim, which the personal representative subsequently appealed. The district court vacated the magistrate's Order and remanded the matter for additional findings of fact and conclusions of law. Shortly after the ruling on appeal was entered, Cathie Peterson sought permission from the magistrate court to sell the property, liquidate an escrow account, and pay counsel for the personal representative of the estate. On the same day, she also filed an Amended Personal Representative's Inventory assigning the life estate zero value. Attorney Brent Featherston filed a Demand for Notice and Special Appearance on behalf of "Cathie Peterson, individually,"stating that he was seeking to vacate and dismiss all orders entered by the magistrate court regarding her real property. IDHW responded by filing a petition to remove Cathie Peterson as personal representative of the estate, which the magistrate court granted. Following a court trial, the magistrate court held that the life estate remainder interest was an estate asset of value for purposes of Medicaid reimbursement and that its value was to be determined in accordance with IDAPA 16.03.05.837.01. On appeal, the district court affirmed the magistrate court. Cathie Peterson appealed. The Supreme Court found that both the magistrate court and the district court had subject matter jurisdiction over this case and personal jurisdiction over Cathie Peterson individually, and that the entire residential property that Cathie Peterson received from her father was an asset of his estate and subject to Medicaid recovery. Thus, the district court erred to the extent it held that only the remainder interest in the estate was subject to Medicaid recovery. Furthermore, the Court held that Cathie Peterson failed to show that the district court's decision denying her claim for offsets was unsupported by the evidence. View "Dept. of Health & Welfare v. Peterson" on Justia Law

A nursing home resident and her community spouse (husband) were penalized based on husband’s purchase of an annuity for himself using funds from his IRA. The district court granted summary judgment in favor of the director of the Ohio Department of Job and Family Services, holding that 42 U.S.C. 1396r-5(f)(1) precluded the transfer of assets because it exceeded husband’s community spouse resource allowance. Section 1396p(c) requires a state to impose a transfer penalty (a period of restricted coverage) if either spouse disposed of assets for less than fair market value during the look-back period. The Sixth Circuit reversed, reasoning that the transfer occurred before the Ohio agency determined that wife was eligible for Medicaid coverage and section 1396p(c)(2)(B)(i) permits an unlimited transfer of assets “to another for the sole benefit of the individual’s spouse.” View "Hughes v. Colbert" on Justia Law

Theresa was married to Myron when he retired from the federal government in 1989. Myron elected to receive a reduced annuity and named Theresa to receive a survivor annuity. In 1998, they divorced. Myron married Roksoliana. Myron received annual notices from the Office of Personnel Management explaining that if he wanted to provide survivor benefits to a spouse that he married after retirement, he had to send a signed request within two years after the date of marriage. In 2002 Myron sent a letter requesting survivor annuity benefits for Roksoliana. OPM denied Myron’s request as not submitted within two years of his marriage and instructed Myron to send his divorce decree to change or eliminate the survivor election previously made. In 2006 Myron sent the divorce decree and the certificate documenting his marriage to Roksoliana. OPM sent notification that his election to transfer full survivor benefits to his new spouse was effective immediately. Myron died in 2009. OPM granted Roksoliana benefits and denied Theresa’s application. An ALJ reversed; the Merit Systems Protection Board affirmed. The Federal Circuit reversed, finding OPM’s annual notice insufficient to inform Myron of his rights and obligations and that the Board’s award to Theresa was not supported by substantial evidence. View "Dachniwskyj v.Office of Pers. Mgmt." on Justia Law

Plaintiffs brought a putative class action challenging 62 Pa. Stat. 1414, which was enacted to regulate special needs trusts. The comprehensive Medicaid eligibility rules enacted by Congress generally mandate that trusts be counted as assets of those seeking Medicaid, but exempt special needs trusts, which are intended to provide disabled individuals with necessities and comforts not covered by Medicaid. Plaintiffs allege Section 1414 is preempted by 42 U.S.C. 1396p(d)(4). The district court held that all but one of the challenged provisions of Section 1414 was preempted, finding that plaintiffs had a private right of action under both Section 1983 and the Supremacy Clause. The court also held that Section 1414 was severable, certified a class, and appointed class counsel. The Third Circuit affirmed in part, agreeing that the case is justiciable and that plaintiffs have a private right of action. Section 1414's 50% repayment provision, "special needs" provision, expenditure provision, and age restriction are all preempted by federal law. The enforcement provision of Section 1414, however, when used to enforce provisions not otherwise preempted, is a reasonable exercise of the Commonwealth's retained authority to regulate trusts. View "Lewis v. Alexander" on Justia Law

This case addressed the effect of a pooled special-needs trust created by an over-65-year-old beneficiary on his medicaid benefits. The Center for Special Needs Trust Administration appealed a summary judgment in favor of the North Dakota Department of Human Services. Invoking 42 U.S.C. 1983 and the Constitution's Supremacy Clause, the Center alleged that North Dakota's demand for reimbursement and its state regulations violated a paragraph of the Medicaid Act, 42 U.S.C. 1396p(d)(4)(C). The court held that the district court properly determined that section 1396p(d)(4)(C) afforded the Center a right of action under section 1983; that North Dakota did not waive its claim to recover for reimbursements and should not be estopped from making that claim; that the Center's claim was without merit; and that preemption did not apply. View "Center for Special Needs, etc. v. Olson, etc." on Justia Law

An elderly woman requiring long-term medical care gave $120,000 to her son in February 2007. The mother believed that the gift would not prevent her from receiving Medicaid coverage if she lived long enough to exhaust her remaining assets. She relied on a provision in Alaska's Medicaid eligibility manual that suggested prospective Medicaid beneficiaries could give away a portion of their assets while retaining sufficient assets to pay for their medical care during the period of ineligibility that Medicaid imposes as a penalty for such gifts. But by the time the mother applied for Medicaid in September 2008, the Alaska legislature had enacted legislation with the retroactive effect of preventing the kind of estate planning the mother had attempted through her gift. The State temporarily denied the mother's application. The son appealed pro se on behalf of his mother, who died in 2009. Upon review, the Supreme Court found that the Alaska legislature's retroactive change to the Medicaid eligibility rules was valid. The Court thus affirmed the State's temporary denial of the mother's application.

Appellee sued the Commissioner of the Social Security Administration (SSA), seeking review of the SSA's denial of benefits to her daughter. At issue was whether a child conceived through artificial insemination more than a year after her father's death qualified for benefits under the Social Security Act, 42 U.S.C. 402, 416. The Commissioner interpreted the Act to provide that a natural child of the decedent was not entitled to benefits unless she had inheritance rights under state law or could satisfy certain additional statutory requirements. The court held that the Commissioner's interpretation was, at a minimum, reasonable and entitled to deference, and that the relevant state law did not entitle the applicant in this case to benefits. Therefore, the court reversed the district court's judgments.

Josephine Centorbi died intestate in 2007. At the time of her death, Ms. Centorbi received Medicaid benefits. Ms. Centorbiâs sister, Dianne Fiorille administered the estate, and acting without counsel, applied to relieve the estate from administration. When she filed the application, Ms. Fiorille did not check the box on the form to attest that the decedent was over 55 years old and received Medicaid assistance. In addition, as administrator, Ms. Fiorille failed to file some other forms necessary to notify both the probate court and the Ohio Department of Jobs and Family Services (ODJFS) of the decedentâs death. The probate court granted Ms. Fiorilleâs application to relieve the estate from administration on the same day it was filed. Two years later, ODJFS learned of Ms. Centorbiâs death. It filed an application to vacate the probate courtâs order, but its application was denied. The probate court held that because Ms. Fiorille indicated that no notice was required (in the form of the omitted check box), ODJFSâs application was time barred. The appellate court affirmed the probate courtâs decision. The Supreme Court found that failing to check the box on the initial relief-from-administration form tolled the statute of limitations. Without the check, the Medicaid program had not been officially notified of the decedentâs death. The Court reversed the appellate courtâs decision and remanded the case to the probate court for further proceedings.