The Michigan Court of Appeals in In re Estate of Klein, No. 329715, stood by its earlier decision In re Clark, No. 320720 (unpublished, May 28, 2015) and held that if an estate wishes to take advantage of the home-of-modest-value hardship waiver for Medicaid expenses, it must apply for the waiver. There is no statutory waiver that automatically applies if an estate fits the requirements of the exception.
Prior to Catherine Klein’s death in December 2013, her authorized representative signed a Medicaid application on her behalf. The only asset in Klein’s estate was her home, which was valued at $45,521.77. In March 2014 the Department of Health and Human Services (“DHHS”) filed a claim against Klein’s estate for Medicaid benefits paid to Klein before her death totaling $133,768.90. The personal representative for Klein’s estate disallowed the claim and asserted that the Estate was exempt based on its value. DHHS sued Klein’s estate in January 2015 seeking payment for the medical expenses. The probate court held that the hardship exemption “applies as mandatory” and granted summary disposition in favor of the Estate.
The Court of Appeals reversed the probate court and granted summary disposition in favor of DHHS. The court held that because the personal representative of Klein’s estate did not apply for a hardship waiver, the estate was not entitled to one. The court noted that it had already decided this issue in In re Clark, where it stated an estate’s personal representative “cannot now attempt to avail himself [or herself] of the waiver’s benefits without having followed the procedural rules necessary to claim the benefit.” The court reasoned that if the Michigan legislature has intended the waiver to be automatic, it would have explicitly said so.
