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New Case Law in Minnesota

The Supreme Court of Minnesota recently rendered a decision that interpreted Minn. Stat. § 256B.056, subd. 4a differently from a previous interpretation in prior, unrelated case. In this matter, Esther sought long-term-care medical assistance, so Renville County Human Services (RCHS) assessed her assets and those of her husband. In doing so, RCHS included Esther’s husband’s portion of several non-homestead life estate interests that he and his wife owned. Esther appealed the inclusion of the interests in the assessment of her husband’s assets, arguing that they should not be included in the total of what he may retain. The Commissioner maintained the denial of her application for assistance based on the inclusion of the life assets owned by her husband.

Minnesota statutes detail that not every asset needs to be spent down to reach the $3,000 individual resource limit for Medicaid eligibility.

Minn. Stat. § 256B.056, subd. 4a: “Asset verification. For purposes of verification, an individual is not required to make a good faith effort to sell a life estate that is not excluded under subdivision 2 and the life estate shall be deemed not salable unless the owner of the remainder interest intends to purchase the life estate, or the owner of the life estate and the owner of the remainder sell the entire property. This subdivision applies only for the purpose of determining eligibility for medical assistance, and does not apply to the valuation of assets owned by either the institutional spouse or the community spouse under section 256B.059, subdivision 2.”

Esther argues that her husband is an “individual” under this statute, as a prior, unrelated case had interpreted the statute, and so his portion of the life estate interests do not need to be sold and should not be included in his community spouse resource allowance amount.

The Supreme Court of Minnesota did not agree, and thus rendered a new interpretation of the statute. The court relied on the plain language of the statute, which states that life estates will be “deemed not salable… only for the purpose of determining eligibility for medical assistance,” and not for the purpose of determining the community spouse asset allowance. Indeed, elsewhere in the statute, “individual” referred to the person who was applying for Medicaid assistance. In addition, the court held that all of the relevant provisions and statutes clearly established the legislature’s intent, and that treatment of an asset for one purpose is not inconsistent with treating it differently for another purpose. Finally, the court stated that Esther had no vested right in a prior (erroneous) interpretation of the statute, and it was not arbitrary and capricious for the Commissioner to interpret the law differently and correctly in her case. So, this case is new precedent for Minnesota and what assets can be included in the community spouse resource allowance calculation.

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